2014 (1) TMI 870 - AT - Income Tax

Recall of order Rectification of error apparent on record u/s 254 of the Act - Determination of the head of income Held that - The Tribunal had committed an error - An error apparent on the record means an error which strikes on mere looking and does not need a long drawn out process of reasoning on points on which there might be conceivably two opinions - by a long drawn process of reasoning assessee wants us to review the order dtd. 07.11.2012 - But it is not permissible as per the provisions of section 254(2) of the Act - under these provisions it is not permissible for the petitioner to contend that the appellate order was vitiated on the ground that the Tribunal failed to discuss all the contentions raised by counsel before it and to give reasons for coming to the conclusion which it did - If assessee finds an order defective on this ground, the remedy lay elsewhere and not by way of a Miscellaneous Application. The Tribunal is a creature of the statute and it is not been vested with the review jurisdiction - it does not have any power to review its orders Relying upon Commissioner Of Income-Tax Versus Ramesh Electric And Trading Co. 1992 (11) TMI 32 - BOMBAY High Court - the power of rectification available to the Tribunal u/s. 254(2) of the Act cannot be exercised on failure of the Tribunal to consider an argument advanced by either party for arriving at a conclusion ,because it is an error of judgment and not an error apparent on the record The High Court has laid down guide lines and the boundaries of the rectification provisions There is no mistake apparent on record Decided partly in favour of Assessee.

Summary

Issues:
1. Rectification of mistakes apparent in the order passed by ITAT Mumbai.
2. Decision on the head under which income earned by the assessee should be assessed.
3. Consideration of additional evidence and adherence to ITAT Rules.

Issue 1: Rectification of Mistakes:
The assessee-company applied for rectification of mistakes in the order passed by ITAT Mumbai, claiming that the Authorized Representative (AR) had not conceded that the issue was decided against the assessee. The Tribunal had held the assessee as a deemed owner under section 27(iiib) and treated rental income as income from house property. The assessee contended that the FAA had not decided the matter in its favor, and the Tribunal should not have declined to interfere with the order passed by the AO. The Tribunal acknowledged the factual error pointed out by the assessee and amended the order to reverse the decision of the FAA.

Issue 2: Assessment of Income:
The main issue revolved around determining the head under which the income earned by the assessee should be assessed. The assessee argued that the income should be assessed under the head of business income, while the AO had assessed it under income from house property. The Tribunal referred to a previous order for AY 2003-04 where a similar issue was decided against the assessee. The AR argued that the assessee was declared an illegal occupant of the premises since 1999, but the Tribunal found that this factor did not alter the final decision. The Tribunal also discussed the submission of additional evidence and highlighted that the assessee failed to follow the prescribed procedure under ITAT Rules for submitting additional evidence. The Tribunal concluded that there was no mistake apparent from the record that could be rectified under section 254(2) of the Act.

Issue 3: Consideration of Additional Evidence:
The Tribunal analyzed the provisions of the Income-tax (Appellate Tribunal) Rules, 1963, especially Rule 29 and Rule 18, regarding the submission of additional evidence. It was noted that the assessee did not follow the required procedure for submitting additional evidence, leading to the evidence being ignored. The Tribunal emphasized that the failure to adhere to the rules regarding additional evidence was the fault of the assessee and could not be considered a mistake apparent from the record. The Tribunal clarified that it did not have the power to review its orders and rectify errors of judgment. Following the guidelines set by the jurisdictional High Court, the Tribunal held that there was no rectifiable mistake regarding the assessment of income.

In conclusion, the Appellate Tribunal ITAT Mumbai addressed the issues raised by the assessee regarding rectification of mistakes in the order, the assessment of income, and the consideration of additional evidence. The Tribunal clarified the legal provisions, upheld its original decision on the assessment of income, and partially allowed the Miscellaneous Application filed by the assessee.