2013 (2) TMI 401 - HC - Income Tax

Whether Tribunal is right in law in admitting a second Misc. Application for recalling the original order when the first Misc. Application has been rejected by holding that there was no mistake apparent from the records which required action u/s 254(2) Held that - Following the decision in case of Pearl Woolen Mills (2009 (11) TMI 48 - PUNJAB AND HARYANA HIGH COURT) that a statutory authority cannot exercise power of review unless such power is expressly conferred on it. The Tribunal has sought to review its earlier order dated 14.8.1998 without there being any specific power of review vested with it. Further, an application u/s 254(2) had already been rejected on earlier occasion on 30.9.1999. In such a situation, the order impugned herein dated 13.3.2000 cannot be legally sustained and, is, thus, set aside. In favour of assessee

Summary

Issues:
1. Admissibility of a second Misc. Application for recalling the original order.
2. Disallowance of interest claim and charging of additional tax.
3. Similarity between deferred payments of interest and sales tax under section 43B of the Act.

Analysis:

Issue 1:
The appeal was filed by the revenue challenging the ITAT's decision to admit a second Misc. Application for recalling the original order. The Tribunal had recalled its earlier order for deciding the appeal afresh based on errors in the previous order. The revenue contended that allowing the second application amounted to a review of the order, which was not permissible as per legal precedents. The Division Bench cited cases to establish that a statutory authority cannot exercise the power of review unless expressly conferred by law. Since the Tribunal did not have the power of review and the application had already been rejected once, the order allowing the second application was set aside.

Issue 2:
The dispute revolved around the disallowance of interest claim of Rs. 3,23,29,399 under section 143(1)(a) and the charging of additional tax of Rs. 29,74,305 under section 143(1A) of the Income Tax Act. The assessee had filed applications for rectification, which were dismissed by the Tribunal. The Tribunal's decision was challenged by the revenue, arguing that the Tribunal erred in allowing the applications and recalling the order for a fresh hearing. The revenue's counsel contended that the Tribunal's actions were not justified based on legal principles and previous judgments. The Tribunal's decision was overturned, and the appeal was disposed of accordingly.

Issue 3:
The third issue involved the ITAT's decision regarding the similarity between deferred payments of interest and sales tax under section 43B of the Act. However, the revenue did not address this issue as the Tribunal had not decided it on merits in the impugned order. The Tribunal's decision to recall the earlier order for a fresh hearing impacted this issue as well. The legal arguments and analysis primarily focused on the admissibility of the second application and the subsequent review of the order, rather than the specific merits of the similarity between deferred payments.

In conclusion, the High Court of Punjab and Haryana set aside the Tribunal's decision to allow a second Misc. Application for recalling the original order, emphasizing the limitations on the power of review by statutory authorities. The detailed analysis of the issues highlighted the legal complexities surrounding the disallowance of interest claim and charging of additional tax, as well as the implications of the Tribunal's decision on the similarity between deferred payments. The judgment provided a comprehensive overview of the legal arguments and precedents that guided the court's decision in this case.