2017 (3) TMI 661 - AT - Income Tax

Rectification of mistake - Disallowance of deduction for the lease rentals paid for the vehicle taken on finance lease - non-consideration of the I.C.D.S 2013 (1) TMI 344 - SUPREME COURT case - Held that - We have heard the rival contentions of both the parties and perused and carefully considered the materials on record; including the judicial pronouncements cited and placed reliance upon. Indeed the Article 141 of the Constitution of India creates obligation on all the Courts and Tribunals to abide by the law declared by the Hon ble Apex Court in the Indian Territory. The declaration of law is complete once the judgment is pronounced. However the issues which are not covered by the judgment of Hon ble Supreme Court can be decided keeping in view the law laid down by the Hon ble High Courts in the country which hold the field. Applying the above principles in the facts on hand we find that there are other judgments of Hon ble Supreme Court which are in favour of the Revenue in the given facts and circumstances. These cases have been discussed in the preceding paragraph and the same are not repeated here for the sake of brevity. In view of above we find that the instant issue is debatable. Further we find it is well settled that statutory authority exercise power of review unless such power is expressly conferred. There is no express power of review conferred on this Tribunal. Even otherwise the scope of review does not extend to re-hearing of the case on merit. All the facts in the instant case were same as of earlier years and the view with regard to the issue in those facts has already been taken up by this Tribunal which is in favour of Revenue. Therefore we are of the view that there is no mistake apparent from the record which has crept in the order of Hon ble ITAT which needs rectification u/s 254(2) of the Act. However the assessee is free to explore the remedy available under the law. Hence the MA filed by the assessee is dismissed.

Summary

Issues involved:
Rectification of order under Section 254(2) of the Act regarding disallowance of deduction for lease rentals paid for vehicles taken on finance lease.

Analysis:
The issue in this case pertains to a Miscellaneous Application (MA) filed under Section 254(2) of the Act by the assessee seeking rectification of the order passed by the Tribunal. The assessee claimed a deduction of ?50 lakh for lease rentals paid for vehicles taken on finance lease, which was disallowed by the CIT(A) and the ITAT. The assessee argued that the Tribunal failed to consider the judgment of the Supreme Court in the case of I.C.D.S. vs. CIT, which was relied upon during the hearing. The assessee contended that non-consideration of a decision of the Supreme Court can be a "mistake apparent from record," citing relevant case laws to support the claim. The assessee sought rectification of the order to allow the deduction of rentals paid for the vehicles taken on finance lease.

The Revenue, opposing the application, argued that allowing the MA would amount to a review of the order, which is impermissible. The Revenue cited judgments of the Supreme Court in cases such as Mysore Mineral Limited vs. CIT and CIT vs. Podar Cement Private Ltd to support its position. The Revenue contended that the Tribunal was correct in rejecting the application, emphasizing that the term "owned" in the relevant provisions should be interpreted broadly. The Tribunal considered the arguments presented by both parties, along with the judicial pronouncements cited. It noted that while the law declared by the Supreme Court must be followed, issues not covered by the Supreme Court can be decided based on High Court judgments.

The Tribunal found that there were other Supreme Court judgments favoring the Revenue in similar circumstances, making the issue debatable. It emphasized that the scope of rectification under Section 254(2) is limited to rectifying a mistake apparent from the record, which was not the case here. The Tribunal concluded that allowing the rectification would amount to a review of the entire order, which is not permissible under the IT Act. It highlighted the importance of consistency in decisions, referring to the rule of consistency upheld by the Supreme Court in previous cases. The Tribunal dismissed the MA, stating that there was no mistake apparent from the record that required rectification under Section 254(2) of the Act. The assessee was advised to explore other available legal remedies.

In summary, the Tribunal dismissed the MA filed by the assessee, emphasizing that the rectification sought would amount to a review of the entire order, which is not permitted under the IT Act. The Tribunal considered the arguments presented by both parties, highlighted the limited scope of rectification under Section 254(2), and emphasized the importance of consistency in decisions based on relevant legal principles and case laws.