2014 (2) TMI 1119 - HC - Income Tax

Refusal for rectification of order u/s 254(2) of the Act Addition made u/s 68 of the Act Held that - The ITAT s order clearly show that the ground of appeal in respect of the addition was general and did not advert to a double entry or a double taxation - As held in Omar Salay Mohamed Sait V. CIT 1959 (3) TMI 2 - SUPREME Court the Tribunal is duty-bound to consider all the grounds, the evidence pro and con, the contentions of the parties before it and all other material brought to its notice in a judicial spirit and should not feel incommoded by technicalities - It would be placing an impossible burden on the Tribunal if it is ordained to rule upon aspects and contentions which were not raised by the parties before it or to deal with pleadings, evidence or material to which its pointed attention was not drawn in the course of the proceedings, and which lies buried in the forest of papers filed by the parties. Whether there was a double addition is a factual question and the Tribunal can deal with it only upon its attention being drawn to it by the aggrieved party - the Tribunal is not expected to unearth evidence or material to which its attention was not drawn by the parties, nor to explore the arena to find out what possible contentions the parties could have taken, and grant them relief on the basis of such an expedition in exercise of the limited jurisdiction u/s 254(2) which confers upon the Tribunal only a power to rectify a mistake apparent from the record and not to indulge in a review Decided against Assessee.

Summary

Issues:
1. Rectification of orders under section 254(2) of the Income Tax Act by the Income Tax Appellate Tribunal.
2. Allegation of double taxation and mistake apparent from the record.

Issue 1: Rectification of orders under section 254(2) of the Income Tax Act by the Income Tax Appellate Tribunal:
The case involved petitions seeking the High Court to set aside the orders of the Income Tax Appellate Tribunal that refused to rectify its orders under section 254(2) of the Income Tax Act. The petitioner had declared income related to accommodation entry operations in the assessment years 1998-99 and 1999-2000. The assessing officer added these amounts under section 68 of the Act as income from unexplained sources. The petitioner appealed to the CIT(A) and later to the ITAT, which also ruled against the petitioner. Subsequently, the petitioner approached the ITAT under section 254(2) seeking rectification, arguing that the Tribunal should rectify the mistake of assessing parts of the declared income. However, the High Court noted that the grounds of appeal in the ITAT's order did not specifically raise the issue of double entry or double taxation, and the petitioner failed to raise the point of double addition before the assessing authority or the appellate authorities. The Court emphasized that the Tribunal's duty is limited to the points raised before it and cannot be expected to rule on aspects not raised by the parties. The Court dismissed the argument that the Tribunal should have identified the double addition issue on its own, as it was the petitioner's responsibility to raise all aspects of its grievance during the proceedings.

Issue 2: Allegation of double taxation and mistake apparent from the record:
The petitioner contended that the issue of double taxation was only a facet of the grounds presented before the ITAT. However, the Court found that the petitioner did not specifically raise the issue of double addition at any stage of the proceedings. The Court cited various Supreme Court judgments emphasizing that the Tribunal's role is to consider the points raised before it and cannot be expected to address issues not brought to its attention by the parties. The Court highlighted that the Tribunal's jurisdiction under section 254(2) is limited to rectifying mistakes apparent from the record and does not extend to conducting a review of the entire case. Therefore, the Court concluded that the objections raised by the petitioner regarding double taxation were devoid of merit and dismissed them accordingly.

In conclusion, the High Court upheld the decision of the Income Tax Appellate Tribunal and dismissed the petitions seeking rectification of orders under section 254(2) of the Income Tax Act, emphasizing the importance of parties raising all relevant issues during the proceedings and not expecting the Tribunal to address unraised contentions.