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TMI Blog1990 (8) TMI 204X X X X Extracts X X X X X X X X Extracts X X X X ..... ces under section 148 were found to have formed such basis for issue of notices under section 148 by the Tribunal in its order and on that score the Tribunal upheld the legality of the notices. It was further contended that if the Tribunal discarded those documents then the Tribunal would have come to the conclusion that notice under section 147(b)/148 is not valid since the Income-tax Officer had no reasonable belief to justify reopening. Thus considering the documents in its original orders and taking them as the basis of notice under section 148 the Tribunal committed a mistake or an error borne on record and therefore the orders of the Tribunal dated 29-4-1988 are liable to be corrected, rectified and the notice under section 148 should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the record and that order itself is liable to be connected under section 254(2) and hence while holding that the previous orders dated 6-10-1989 as illegal and honest, fresh orders should be passed on the miscellaneous petition dated 21-9-1989. 3. During the course of hearing Sri Ajay Gandhi, learned Advocate for the assessee-petitioner heavily relied upon the Delhi Full Bench decision found in Smart (P.) Ltd. v. ITAT [1990] 182 ITR 384 and the Andhra Pradesh High Court's decision in Addl. CIT v. ITAT [1983] 139 ITR 615 and contended strongly that rejecting the miscelleaneous petition on 6-10-1989 without affording an opportunity of hearing the petitioner is bad in law and amounts to negating fruits of natural justice to the petitioner. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee or the (Assessing) Officer : Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub-section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard. " Under what circumstances opportunity of hearing must be given u/s. 254(2) was the subject considered both by the Full Bench of Delhi High Court in Smart (P.) Ltd.'s case as well as Andhra Pradesh High Court decision in ITAT's case. In our humble opinion there was a conflict between the two High Courts about this point. The Full Bench of Delhi High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the learned counsel for the assessee himself, holds diametrically an opposite view. The facts of the case before the Andhra Pradesh High Court were that after passing of the order u/s. 254(1) the Tribunal suo motu exercised its powers of rectification and corrected only typographical mistakes which are apparent on the face of record and passed a rectificatory order without issuing any notice to the department. The revenue filed a writ petition before the Hon'ble Andhra Pradesh High Court challenging that passing a rectificatory order in the form of corrigendum on 20-10-1973 by the Appellate Tribunal purporting to rectify the mistakes in its order dated 23-4-1971 without issuing notice to the department and without hearing its objections ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oviso as against its strict literal construction should be preferred and followed. The Andhra Pradesh High Court appeared to have preferred literal and strict construction of the proviso to section 254(2) inasmuch as their Lordships of the Andhra Pradesh High Court held the following at p. 618 : " But undoubtedly, it has got power and jurisdiction to rectify its mistake apparent from the record and make a suitable amendment of any order passed by it under sub-section (1) to section 254. Where the assessee or an ITD brings to the notice of the Appellate Tribunal about the creeping in or existence of any mistake apparent from the record, the Tribunal shall make suitable amendment and rectify such mistakes. In the latter case, the Tribunal h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n consonance with the ratio of the Andhra Pradesh High Court judgment in ITAT's case. The two requirements set out by the Delhi High Court to justify rejection of a petition seeking to rectify the mistakes in the original order are : (1) to give opportunity of hearing to the assessee, and (2) indicate the grounds in the orders while rejecting the application. 7. As far as the first requirement is concerned according to the Andhra Pradesh High Court whose decision is binding against us being jurisdictional High Court is that no notice of hearing need be given to the assessee when the order does not have the effect of increasing the tax, reducing the refund or enhancing the assessment, with great respect to the Delhi High Court the firs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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