2013 (12) TMI 427 - HC - Income Tax

Whether Tribunal can review its own order - Held that - From the decisions of various judgements delivered by the Supreme court as well as High Court it can be concluded that It is well settled that the power to review is not an inherent power. It must be conferred by law either specifically or by necessary implication - A review proceeding cannot be equated with the original hearing of the case, and the finality of the judgment delivered by the Court will not be reconsidered except where a glaring omission or patent mistake or like grave error has crept in earlier by judicial fallibility - The power of review may be exercised on the discovery of new and important matter or evidence which, after the exercise of due diligence was not within the knowledge of the person seeking the review or could not be produced by him at the time when the order was made - It may be exercised where some mistake or error apparent on the face of the record is found; it may also be exercised on any analogous ground - It may not be exercised on the ground that the decision was erroneous on merits. That would be the province of a Court of appeal. A power of review is not be confused with appellate power which may enable an Appellate Court to correct all manner of errors committed by the subordinate Court. Following Lily Thomas, etc. etc. v. Union of India and others 2000 (5) TMI 1045 - SUPREME COURT - Possibility of two views on the same subject is no ground to review the earlier judgment passed by a Bench of the same strength. Following CIT v. Mool Chand Shyam Lal 2004 (7) TMI 42 - ALLAHABAD High Court - The Tribunal does not have power to review its judgment under Section 254(2) of the Act, which authorises the Tribunal to only correct its mistakes - ITAT has committed grave error of law to recall the order dated 30.6.1998 by the impugned order dated 14.2.2000 passed under section 254(2) of the Act - Decided in favour of Revenue.

Summary

Issues Involved:
1. Justification of ITAT's recall of its order dated 30.06.1998 under Section 254(2) of the Income Tax Act, 1961.
2. Consideration of evidence and material by ITAT in its original order.
3. Scope of Section 254(2) of the Income Tax Act regarding rectification of mistakes.

Detailed Analysis:

1. Justification of ITAT's Recall of its Order Dated 30.06.1998:
The High Court of Allahabad examined whether the ITAT was justified in recalling its order dated 30.06.1998. The ITAT had initially allowed the assessee's claim for service charges but restricted the claim for reimbursement of expenses to 4.5% of the total deposits collected, based on the lack of detailed and supported documentation. The ITAT's subsequent decision to recall this order was challenged on the grounds that it re-appreciated the evidence and reached a different conclusion without referring to the terms of the MOU, which required expenses to be supported by valid documents and reimbursed against bills raised by the firm.

2. Consideration of Evidence and Material by ITAT in its Original Order:
The ITAT's original order dated 30.06.1998 had considered all the facts, circumstances, and evidence on record, including the MOU between the parties. The ITAT found that the assessee did not furnish detailed documents supporting the claimed expenses at any stage of the proceedings. The ITAT restricted the claim to 4.5% of the total deposits collected due to the absence of adequate documentation. The High Court noted that the ITAT's findings were based on a thorough scrutiny of the documents and records available.

3. Scope of Section 254(2) of the Income Tax Act Regarding Rectification of Mistakes:
Section 254(2) of the Income Tax Act allows the ITAT to rectify any mistake apparent from the record. The High Court emphasized that this provision does not confer the power to review or re-appreciate evidence. The ITAT's recall of its original order was found to be outside the scope of Section 254(2) as it involved a re-appreciation of evidence and a new opinion on the facts. The High Court cited several Supreme Court judgments to support the principle that a quasi-judicial authority cannot review its own order unless expressly conferred by the statute.

Conclusion:
The High Court concluded that the ITAT had exceeded its powers under Section 254(2) by recalling its original order based on a re-appreciation of evidence. The recall was deemed outside the purview of rectifying a mistake apparent from the record. Consequently, the High Court set aside the ITAT's order dated 14.02.2000 and restored the original order dated 30.06.1998. The question of law was answered in favor of the revenue and against the assessee.