2013 (8) TMI 668 - AT - Income Tax

Rectification of mistake - Tribunal directed AO to recalculate interest u/s 234A, 234B and adjustment of seized amount with advance tax - A.O. failed to follow direction - Held that - There is no mistake in the said order of the Tribunal, warranting any rectification, as the Tribunal made it amply clear and gave direction that seized amount has to be adjusted first towards existing liabilities and thereafter it should be adjusted towards the outstanding tax liability of the assessment years under consideration, and accordingly directed the Assessing Officer to recalculate the interest under S.234A and 234B of the Income-tax Act. It clearly means that if there is no exiting tax liability at the time of seizure of the cash, the seized amount should be adjusted towards payment of advance tax in terms of judgments cited by the assessee, noted above. When once the Tribunal decides an issue in one way, the only course available to the Assessing Officer is to follow the order of the Tribunal in true spirits, and it is not permissible for the Assessing Officer to take a different view, or to sit in judgment over the order of the Tribunal by interpreting the same in the manner he wanted - while there is no warrant for rectification of the order of the Tribunal, in the absence of any specific mistake therein, and the grievance if any to the assessee, arises out of the consequential orders passed by the Assessing Officer - Decided against the Assessee.

Summary

Issues:
Rectification/clarification of order related to levy of interest under S.234A and S.234B of the Income-tax Act for assessment year 2008-09.

Analysis:
The assessee filed a Miscellaneous Application seeking rectification/clarification of the Tribunal's order regarding levy of interest under S.234A and S.234B for the assessment year 2008-09. The assessee argued that the Assessing Officer did not follow the Tribunal's direction to adjust the seized amount towards existing liabilities and outstanding tax liabilities. The learned Authorised Representative cited judgments from various High Courts to support the assessee's position. The Tribunal had directed the Assessing Officer to recalculate the interest under S.234A and S.234B. The Departmental Representative opposed the rectification, stating no mistake was apparent from the record.

Upon hearing both parties and examining the material, the Tribunal found no mistake in its order that warranted rectification. The Tribunal reiterated its direction for the seized amount to be adjusted first towards existing liabilities and then towards outstanding tax liabilities. The Tribunal emphasized that the Assessing Officer must adhere strictly to its directions and follow the order in its true spirit. It highlighted the importance of judicial discipline and the hierarchy of authority within the legal system.

The Tribunal referred to a decision by the jurisdictional High Court emphasizing the obligation of authorities and Tribunals to follow High Court decisions within their jurisdiction. It also cited a judgment from the Bombay High Court, stating that the Income-tax Officer must adhere to decisions of the Supreme Court, the High Court within their jurisdiction, or other High Courts in favor of the assessee. The Tribunal concluded that the Assessing Officer must comply with its order and pass appropriate orders in line with the Tribunal's directive.

In summary, the Tribunal dismissed the Miscellaneous Application, as there was no specific mistake in its order requiring rectification. The grievance raised by the assessee stemmed from the Assessing Officer's actions, and the Tribunal directed the Assessing Officer to align their decisions with the Tribunal's order. The Tribunal emphasized the importance of following judicial hierarchy and decisions to ensure the proper administration of law.