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2014 (8) TMI 487 - HC - Income TaxPower to tribunal to consider Miscellaneous application - rectification of order - Whether the Tribunal is right in entertaining the assessee s miscellaneous application again when once the MA has been considered and rejected by the same authority Held that - Following the decision in Commissioner of Income-tax v.Pearl Woolen Mills 2009 (11) TMI 48 - PUNJAB AND HARYANA HIGH COURT when the first rectification application was rejected by the Tribunal, the second rectification application on the same issue was not maintainable at all the Tribunal has materially erred in entertaining the second rectification application and passing the impugned order of re-calling its earlier order in exercise of powers u/s 254(2) of the Act - once the second rectification application on the same issue was not maintainable, the Tribunal erred in entertaining the application and allowing the same - the Tribunal is justified in allowing the second rectification application on merits and re-calling the order passed in an appeal is as such not required to be considered - the Tribunal has gone beyond the scope and ambit of section 254(2) of the Act - only when it is found that there was an error apparent on the face of the record, then and then only powers under sec. 254(2) of the Act can be invoked the Tribunal has tried to consider the issue on merits which was already considered by the Tribunal earlier while deciding the appeal the Tribunal has materially erred in exercise of powers u/s 254(2) of the Act by passing the order and the Tribunal has gone beyond the scope and ambit of the powers of section 254(2) of the Act Decided in favour of Revenue.
Issues Involved:
1. Whether the Appellate Tribunal is right in law in entertaining the assessee's miscellaneous application again when once the MA has been considered and rejected by the same authority? Detailed Analysis: Issue 1: Re-entertainment of Assessee's Miscellaneous Application The core issue presented for consideration is whether the Appellate Tribunal is justified in law in entertaining a second miscellaneous application (MA) from the assessee after having already considered and rejected a similar application. The Revenue challenged the Tribunal's decision to entertain and allow the second MA, arguing that it was not maintainable under section 254(2) of the Income Tax Act. The Revenue's counsel, Mr. Manish R. Bhatt, contended that the Tribunal erred in entertaining the second MA after rejecting the first one, which was based on the same grounds. He argued that the second application was an attempt to circumvent the provisions of section 254(2) of the Act, which does not allow for a review of its own orders. The Revenue relied on several judicial precedents, including decisions from the Punjab & Haryana High Court, Madras High Court, and Kerala High Court, which consistently held that a second rectification application on the same issue is not maintainable. In contrast, the assessee's counsel, Mr. Bandish S. Soparkar, argued that the Tribunal was justified in entertaining the second MA due to a glaring factual mistake in its earlier order. However, he could not convincingly argue the maintainability of the second application on the same grounds. The court observed that the Tribunal had earlier rejected the first rectification application, noting that the attempt was to review its order, which is beyond the scope of section 254(2) of the Act. The Tribunal's subsequent decision to entertain a second application on the same issue was found to be inconsistent with established legal principles. The court cited the Punjab & Haryana High Court's decision in Commissioner of Income-tax v. Pearl Woolen Mills, which held that a statutory authority cannot exercise the power of review unless expressly conferred, and reiterated that the Tribunal does not possess inherent powers of review. Similarly, the Madras High Court in Commissioner of Income-Tax vs. Panchu Arunachalam emphasized that once a rectification application is decided, another application on the same issue is not maintainable. The Kerala High Court in Commissioner of Income-Tax v. Aiswarya Trading Co. also held that a second rectification application on the same issue is not permissible. Applying these principles, the court concluded that the Tribunal erred in entertaining and allowing the second rectification application. The Tribunal's action was beyond the scope and ambit of section 254(2) of the Act, which only permits rectification of an error apparent on the face of the record, not a re-evaluation of the merits of the case. In conclusion, the court answered the question in favor of the Revenue and against the assessee, holding that the Tribunal was not justified in law in entertaining the second miscellaneous application after having already considered and rejected the first one on the same grounds.
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