2014 (12) TMI 184 - HC - Income Tax

Rejection of rectification application by Tribunal Deduction u/s80HHC and 80IB urged by assessee not considered by Tribunal - Held that - A mistake has occurred in the order dated 14th May, 2010, though, the application for rectification is rejected on the ground that such an application is not maintainable u/s 254(2) as decided in Orissa High Court in CIT v/s. President-ITAT 1992 (1) TMI 88 - ORISSA High Court - every authority exercising quasi-judicial powers has inherent/ incidental power in discharging of its functions to ensure that justice is done between parties i.e. no prejudice is caused to any of the parties - This power has not to be traced to any provision of the Act but inheres in every quasi-judicial authority the same has been held in Grindlays Bank Ltd. v/s. Central Government Industrial Tribunal 1980 (12) TMI 181 - SUPREME COURT - no party should be prejudiced on account of any mistake in the order of the Tribunal - The Tribunal and the parties are not adversarial to each other - In fact, the Tribunal and the parties normally represented by Advocates/Chartered Accountants are comrades in arms to achieve justice - Therefore, a mistake from any source be it-the parties or the Tribunal so long as it becomes a part of the record, would require examination by the Tribunal u/s 254(2) it cannot be dismissed at the threshold thus, the order is set aside and the Tribunal is directed to pass the appropriate order Decided in favour of assessee.

Summary

Issues:
Challenge to the order of the Income Tax Appellate Tribunal regarding the dismissal of rectification applications for the deduction under Section 80HHC and 80IB of the Income Tax Act, 1961.

Analysis:
The Petitioner had claimed deductions under Section 80HHC and 80IB of the Income Tax Act for Assessment Years 1999-2000 to 2001-02, which were not accepted by the Revenue, leading to an appeal before the Tribunal. The Tribunal's order dated 18th January 2008 did not consider the Petitioner's contentions regarding these deductions, despite being raised in the appeal memo (Para 3-4).

The Petitioner filed a rectification application to correct the omission of these deductions in the Tribunal's order. However, there was confusion in the appeal numbers mentioned in the rectification application, which led to subsequent rectification applications to correct this error (Para 6-9).

The Tribunal rejected the rectification applications citing that Section 254(2) of the Act only allows rectification of orders passed under Section 254(1) and not for correcting party-related mistakes. The High Court disagreed, emphasizing the inherent power of quasi-judicial authorities to ensure justice and prevent prejudice to any party. The Court highlighted the need for a justice-oriented approach and criticized the strict technical interpretation adopted by the Tribunal (Para 10-13).

The High Court set aside the Tribunal's order and directed it to correct the mistake in its order dated 14th May 2010 for all relevant Assessment Years, emphasizing the importance of ensuring parties are not prejudiced due to mistakes in the Tribunal's orders (Para 14-15).