2017 (9) TMI 662 - AT - Income Tax

Rectification of mistake - Allowability of deduction u/s 80IA - determination of quantum thereon with regard to captive consumption of electricity - Held that - We find that this Tribunal had passed an order by placing proper reliance on the decision of the Hon ble Jurisdictional High Court on the issue of allowability of deduction u/s 80IA of the Act and determination of quantum thereon with regard to captive consumption of electricity. We do not find any error in the said order passed by this Tribunal warranting any rectification in terms of Section 254(2) of the Act. Failure of the Tribunal to consider the argument advanced by either party for arriving at a conclusion is not an error apparent on the record, although it may be an error of judgment. It has been further held that the Tribunal cannot in exercise of its power of rectification look into some other circumstances which would support or not support its conclusion. The present application of the assessee u/s 254(2) of the Act is devoid of merits and deserves to be dismissed

Summary

Issues:
Rectification of order based on direction to decide issue as per High Court decision.

Analysis:
The assessee filed a miscellaneous application seeking rectification of the Tribunal's order directing the Assessing Officer (AO) to decide an issue based on the decision of the High Court in the assessee's own case. The issue pertained to claiming deduction under section 80IA of the Act for a captive power plant. The Tribunal remanded the determination of market value of electricity to the AO as per the High Court's decision. The assessee argued that the issue should be decided based on the outcome of the Supreme Court proceedings, which was not reflected in the Tribunal's order. The assessee cited precedents where similar directions were given based on Supreme Court outcomes. The Department contended that no error existed in the Tribunal's order, as any success in the Supreme Court would be implemented by the AO. The Tribunal held that its order following the High Court's decision was not erroneous under Section 254(2) of the Act. It distinguished precedents cited by the assessee where interim orders or concessions were involved, which were not present in this case. The Tribunal emphasized that unless there were manifest errors affecting the final decision, it would not recall its order to re-write it. It cited a Mumbai Tribunal case to support this principle. The Tribunal noted that the statute provided for relief if the assessee succeeded in the Supreme Court, addressing the concerns raised by the assessee. Consequently, the Tribunal dismissed the assessee's application as lacking merit.

In summary, the Tribunal rejected the assessee's application for rectification, emphasizing that its order based on the High Court decision was not erroneous and did not warrant recall. The Tribunal highlighted the absence of interim orders or concessions in this case, distinguishing it from precedents cited by the assessee. It reiterated the principle that unless there were clear errors impacting the final decision, the Tribunal would not amend its order. The Tribunal also noted that the statute provided a mechanism for relief if the assessee succeeded in the Supreme Court, addressing the concerns raised by the assessee.