2015 (11) TMI 8 - AT - Income Tax

Rectification of mistake - ICAI has submitted that the Tribunal has made certain observations about the Chartered Accountancy (C.A.) profession, the conduct of some of the students pursuing the C.A courses and also about ICAI in the impugned order - Held that - The observations made by the Tribunal about the C.A profession and conduct of the students pursuing the C.A courses, as submitted by Ld A. R, were not necessary to adjudicate the issues that were urged before the Tribunal by the appellant Shri Vijay V Meghani. However, in our view, the Income tax Appellate Tribunal, being a part of Government of India, should not shut its eyes when it is noticed that certain developments occurring in the Country may affect the Country as a whole, more particularly when the reputation of particular profession, from whom the Tribunal is getting assistance in the dispensation of justice, is at stake. Accordingly, we sincerely believe that it is the bounden duty of not only the Tribunal, but also the duty of one and all to point out and discuss about such kind of developments, when it is noticed that the same may affect the public at large. There cannot be any controversy that the interest of our Country is Supreme and no citizen can or should compromise on the same. We may clarify here that the observations were made by the Tribunal in the impugned order in that context only and it was not the intention of the Tribunal to target any particular person or the ICAI. Accordingly, none of the observations made in the order was intended to criticize should be construed as criticizing the functioning of the ICAI. In fact, the Tribunal has only applauded the strict standards followed by ICAI in imparting the education and training. It may be noticed that the paragraph 9.6 of the order, which is considered by the ICAI to be offensive, starts with the expression However, if it is considered for a moment .. Thus, it can be noticed that the Tribunal has considered a hypothetical situation and made further observations about the possible consequences, if the said hypothetical situation had been a reality. Hence, it would not be correct to interpret that the Tribunal has commented upon that the standards of C.A profession or the ICAI. The observations made by the Tribunal in the later part of paragraph 9.6 was intended to highlight or reiterate the importance of the articled clerk training and the self study model conceived by the ICAI and the same was intended only to give a wake-up call to the students pursuing C.A profession. Miscellaneous application filed by the ICAI is dismissed.

Summary

Issues:
1. Rectification of Tribunal's order by ICAI.
2. Observations made by the Tribunal affecting the reputation of ICAI.
3. Competency of ICAI to file a miscellaneous application.
4. Tribunal's power to rectify mistakes apparent from record.

Analysis:
1. The Institute of Chartered Accountants of India (ICAI) filed a miscellaneous application seeking rectification of certain observations made by the Tribunal in its order dated 20th August, 2014. The ICAI argued that the observations were not relevant to the issues raised by the appellant in the case and had unintended consequences on ICAI's reputation.

2. The Tribunal acknowledged that the observations made were not directly related to the issues raised by the appellant. However, it emphasized that as a part of the Government of India, the Tribunal has a duty to address developments that may impact the country as a whole, especially when the reputation of a profession like Chartered Accountancy is at stake. The Tribunal clarified that its intention was not to criticize ICAI but to highlight the importance of training in the profession.

3. The competency of ICAI to file the application was questioned since ICAI was not a party to the appeal. The Tribunal was reminded that under section 254(2) of the Act, it could rectify mistakes apparent from the record but did not have the power to review its order. The ICAI argued that the Tribunal's inherent powers could be used to rectify the order due to the observations made without hearing ICAI.

4. Ultimately, the Tribunal modified the contentious paragraph of the order to clarify its intended message and dismissed the miscellaneous application filed by ICAI. The modified paragraph emphasized the importance of practical training in the Chartered Accountancy course and highlighted the potential consequences of compromising on such training. The Tribunal reiterated the significance of the self-study model conceptualized by ICAI for producing competent professionals.

This comprehensive analysis of the judgment highlights the issues raised, the arguments presented by the parties involved, and the Tribunal's reasoning leading to the final decision.