2018 (3) TMI 1456 - AT - Income Tax

Rectification of mistake - Rectificatory powers vested on the Tribunal under section 254(2) - Observations that actual use of loan by the appellant after borrowing it is not verified by the lower tax authorities - Held that - This Tribunal cannot be a reviewing authority. We find that this Tribunal had considered all the aspects of the case before giving its finding. What the assessee seeks now is a review of the order. Assessee has not been able to show any mistake in the order of the Tribunal, much less any mistake apparent on record. The stand of the assessee is this that it was stop gap arrangement till the loan is disbursed by the financial institutions as stated by the assessee in Para 4 (ii) of the M. P. As per the assessment order, the entire discussion is about allowability of deduction u/s 57 and there is no whisper about nature of loan. There is no discussion on this aspect also as to whether loan was received from financial institutions and if received than when received and how utilised. As per the tribunal order, the matter is restored to AO for fresh decision after examining the facts of the present case in the light of the judgment rendered in the case of Comfound financial Services 2007 (12) TMI 519 - KARNATAKA HIGH COURT . Hence, in our considered opinion, there is no apparent mistake in this tribunal order which can be rectified u/s 254 (2).

Summary

Issues:
Rectification of mistakes in the order of the Tribunal for the assessment year 2011-12.

Analysis:
The assessee filed a miscellaneous petition seeking rectification of certain mistakes in the Tribunal's order dated 13.09.2017 for the assessment year 2011-12. The mistakes sought to be rectified included issues related to the verification of the actual use of the loan, the nature of the loan taken from a sister concern, and the applicability of a High Court judgment. The assessee prayed for rectification of the mistakes, setting aside the order for fresh decision, or any other relief deemed fit by the Bench. The Ld. DR opposed the rectification, leading to a detailed analysis by the Tribunal.

The Tribunal delved into the scope of rectification under section 254(2) of the Act, citing various High Court and Supreme Court judgments to define what constitutes a mistake apparent on record. The Tribunal highlighted that a mistake must be patent, manifest, and self-evident, not requiring elaborate discussion or extraneous matters to establish its correctness. The purpose of rectification is to correct glaring mistakes of fact or law that are clear on mere observation. The Tribunal emphasized that rectification is not a review of the order and cannot be used to re-argue the appeal already decided.

Upon examining the issues raised by the assessee, the Tribunal found that the nature of the loan and its utilization were not adequately discussed in the assessment order. The Tribunal noted that the matter was restored to the Assessing Officer for a fresh decision in light of a High Court judgment, indicating no apparent mistake in the Tribunal's order that could be rectified under section 254(2). The Tribunal concluded that the assessee failed to demonstrate any mistake in the order, leading to the dismissal of the miscellaneous petition.

In the final order pronounced on 21st February 2018, the Tribunal found no merit in the miscellaneous petition and dismissed it. The judgment emphasized the importance of rectification for correcting manifest errors on record, highlighting the limitations and scope of rectificatory powers vested in the Tribunal under section 254(2) of the Act.