2018 (11) TMI 207 - AT - Income Tax

Rectification of mistake - computation of capital gain - Tribunal while passing the impugned order, did not consider the ITAT s order in the case of the purchaser viz. , St. Antony s Timber Depot, wherein the Tribunal confirmed the purchase price of the impugned property at ₹ 99. 90 lakh instead of 18. 30 lakh is disclosed in the sale deed dated 24. 04. 2007 - Held that - The Tribunal, u/s 254(2) of the I. T. Act, does not have the power to review its own order. It has only power to rectify the mistake apparent on record. A power of review has to be statutorily conferred. It cannot be inferred. As this power has not been conferred on the Tribunal, under the Act, it does not have the power of review. As mentioned earlier, the power that has been given under section 254 is right of rectification of mistakes. As a power to rectify a mistake does not include a power to review, all that the Tribunal can do is to amend its order with a view to rectify any error apparent from the record. Unless there are manifest errors which are obvious, clear and self-evident, the Tribunal cannot recall its previous order in an attempt to rewrite it. Under the garb of rectification, the Tribunal cannot exercise the power of recall and review its earlier order. In the instant case, the Miscellaneous Petition of the Department is prima-facie seeking to review the order of the Tribunal dated 19. 12. 2017, which unfortunately the Tribunal does not have the power under the statute. The Hon ble Delhi High Court in the case of CIT v. Vichitra Construction (P.) Ltd. 2004 (2) TMI 36 - DELHI HIGH COURT had held the power u/s 254(2) is to correct any apparent mistake and not to recall its entire order and review the same. Miscellaneous Application filed by the Revenue is dismissed.

Issues Involved:

1. Validity of the sale consideration adopted by the Assessing Officer.
2. Whether the Tribunal has the power to review its own order under section 254(2) of the Income-tax Act.
3. Whether there was an error apparent on the face of the record in the Tribunal's order dated 19.12.2017.

Detailed Analysis:

1. Validity of the Sale Consideration Adopted by the Assessing Officer:

The primary issue revolves around the sale consideration of 30.50 cents of land sold by the assessee to M/s. St. Antony’s Timber Depot. The sale deed disclosed a value of ?18,30,000, whereas the Assessing Officer (A.O.) adopted a value of ?99,90,000 based on seized documents (SJ-I and SJ-III) and a statement recorded under section 132(4) from the Managing Partner of the purchaser firm. The A.O. argued that the documents indicated the actual sale consideration was ?99,90,000.

However, the Tribunal found that SJ-I and SJ-III were merely loose sheets without signatures and did not constitute a sale agreement. Furthermore, the statement recorded from the Managing Partner did not specifically mention the property details or the seller's name. The Tribunal concluded that the A.O. failed to provide corroborative evidence to support the higher sale consideration and directed the A.O. to adopt the documented value of ?18,30,000 for calculating long-term capital gains.

2. Tribunal's Power to Review Its Own Order Under Section 254(2):

The Revenue filed a Miscellaneous Application (M.A.) claiming there was an error in the Tribunal's order dated 19.12.2017, arguing that the Tribunal did not consider its own order in the case of the purchaser (M/s. St. Antony’s Timber Depot), where the purchase price was confirmed at ?99,90,000.

The Tribunal emphasized that under section 254(2), it does not have the power to review its own order but only to rectify any apparent mistake. The Tribunal cannot recall and review its previous order unless there are manifest errors that are obvious and self-evident. The Tribunal cited legal precedents, including CIT v. Vichitra Construction (P) Ltd., to support this position.

3. Error Apparent on the Face of the Record:

The Tribunal examined whether there was an apparent error in its order dated 19.12.2017. It noted that during the hearing of ITA No. 196/Coch/2016, neither the Departmental Representative nor the AR provided information about the fate of the assessment in the hands of the purchaser. The Tribunal found that the order in ITA No. 216/Coch/2012 (in the case of the purchaser) did not conclusively establish the same property was involved, as it did not mention specific details such as survey number, nature, or location of the property. Additionally, the extent of the land differed (27 cents in the purchaser's case vs. 30.50 cents in the present case).

The Tribunal concluded that the Department's M.A. was essentially an attempt to review the Tribunal's earlier order, which is not permissible under section 254(2). The Tribunal reiterated that it can only rectify apparent mistakes and not review its decisions.

Conclusion:

The Tribunal dismissed the Miscellaneous Application filed by the Revenue, holding that there was no apparent error in the Tribunal's order dated 19.12.2017. The Tribunal reaffirmed that it does not have the power to review its own orders under section 254(2) and found no merit in the Revenue's application. The documented sale value of ?18,30,000 was upheld for the purpose of calculating long-term capital gains.

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