2020 (12) TMI 346 - AT - Income Tax

Rectification u/s.254 - deduction u/s.80-IA admissibility - reference made by the Tribunal does not relate to the issue in dispute, rather it is with respect to subsidy on Sales Tax benefit which is altogether a different issue - HELD THAT - The power of rectification u/s.254(2) can be exercised only when the mistake which is sought to be rectified is an obvious and patent mistake which is apparent from the record, and not a mistake which requires to be established by arguments and a long drawn process of reasoning on points on which there may conceivably be two opinions. If we examine the records, then it will reveal that while adjudicating the issue, the Tribunal made reliance upon the finding which is not on the issue whether the deduction u/s.80-IA is admissible to the assessee or not. The reliance has been placed on an issue wherein benefit of subsidy on Sales Tax component was given. Therefore, we are of the view that an apparent error has crept in the order of the tribunal, it required rectification. Hence, we allow both the applications and recall the order of the Tribunal for readjudication on merit. Accordingly, the Registry is directed to restore the appeal to its original number and fix the same for fresh hearing in due course under the intimation to both the parties. As far as application filed by the Revenue is concerned, it is also identical pointing out same mistake. Therefore, this Miscellaneous Application is also treated as allowed.

Summary

Issues:
Rectification of apparent error in the order regarding deduction u/s.80-IA for AY 2000-01.

Analysis:
The judgment involved cross miscellaneous applications by the Assessee and Revenue pointing out an apparent error in the Tribunal's order for AY 2000-01. The Assessee had claimed deduction u/s.80-IA amounting to a specific sum on profits from Trikampura Division, which was disallowed by the Assessing Officer. The Tribunal initially confirmed this disallowance, but the Assessee filed a miscellaneous application which was allowed, leading to a partial allowance of the appeal. The Tribunal observed that the issue was already adjudicated in favor of the Assessee by a Co-ordinate Bench and directed the Assessing Officer to allow the claim in question.

Further, the Assessee pointed out that the Tribunal inadvertently discussed and allowed a different ground related to sales tax benefit instead of adjudicating the claim for deduction u/s.80-IA on profits from Trikampura Division. Both parties agreed that the Tribunal's reference to a previous decision was not related to the issue in dispute but to a different matter, indicating an apparent error in the order. The Tribunal acknowledged this error and allowed both applications for rectification, recalling the order for readjudication on merit.

The Tribunal clarified that rectification under section 254(2) of the Income Tax Act can only be done for obvious and patent mistakes apparent from the record. Since the Tribunal's reliance was on an issue unrelated to the deduction u/s.80-IA, it was deemed an apparent error requiring rectification. Therefore, the Tribunal allowed both the Assessee's and Revenue's applications, directing the restoration of the appeal for fresh hearing. The judgment was pronounced on 07/12/2020 by the Tribunal.