2021 (4) TMI 770 - AT - Income Tax

Rectification of mistake u/s 254 - Tribunal has not considered the contentions of the assessee - HELD THAT - Reappreciation of facts and modification of the Tribunal s order is nothing but review of ITAT order. U/s 254(2) of the I T Act, ITAT can only rectify the alleged mistakes which are apparent from record and cannot reappreciate the evidence and review its findings as held by the Hon'ble Bombay High Court in the case of CIT vs. Ramesh Electric Trading Co. 1992 (11) TMI 32 - BOMBAY HIGH COURT Therefore, this M.A. is not maintainable and is accordingly rejected.M.A. filed by the assessee is dismissed.

Summary

Issues:
Condonation of delay due to COVID-19 lockdown for filing M.A. under section 254(2) of the I.T. Act. Seeking rectification/modification of Tribunal's order under section 254(2) of the Act based on alleged mistake apparent from record.

Condonation of Delay:
The assessee filed a M.A. under section 254(2) of the I.T. Act against the Tribunal's order dated 29.10.2019, beyond the prescribed time limit. The assessee attributed the delay to the COVID-19 lockdown and cited the Supreme Court's direction to exclude the lockdown period from the limitation period. The Tribunal accepted the plea, considering the lockdown impact and held the petition as within the limitation period.

Rectification/Modification of Tribunal's Order:
The assessee sought rectification/modification of the Tribunal's order under section 254(2) of the Act, claiming a mistake apparent from the record. The contentions included details of an agricultural land lease agreement and subsequent transactions. The dispute revolved around the treatment of shares allotted, TDS amount, and their tax implications. The Tribunal analyzed the facts and provisions of Sec. 56(2)(vii)(c)(i) of the I.T. Act. The Tribunal confirmed the addition of TDS amount as 'income from other sources' but rejected the application of the said section to shares allotted. The assessee argued that TDS was part of lease rental, not paid to the Government, and thus no gain accrued. However, the Tribunal held that the rectification sought was beyond the scope of section 254(2) as it involved a review of the order, which is impermissible under the law.

Analysis and Conclusion:
The Tribunal dismissed the assessee's M.A., emphasizing that rectification under section 254(2) is limited to correcting apparent mistakes, not a review of findings. Citing legal precedence, the Tribunal held that reappreciation of facts or modification of the order amounts to a review, not permissible under section 254(2). Therefore, the M.A. was deemed not maintainable and rejected. The order was pronounced on 15th April, 2021, closing the matter.