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TMI Blog2010 (2) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax under section 263. The substantial question of law which arises before the court, in this appeal filed by the Revenue, is whether in the circumstances of the case, the impugned order falls within the parameters of the jurisdiction under section 254(2) of the Act ? 3. During the course of the assessment proceedings pertaining to the assessment year 2000-01, the assessee made a claim of deduction under section 80HHC. The Assessing Officer by an order dated March 25, 2003 computed the gross total income of the assessee at Rs. 32.19 crores, allowed a deduction under section 80HHC in the amount of Rs. 32.17 crores and computed the taxable income at Rs. 1.25 lakhs. On March 22, 2005, the Commissioner of Income-tax exercised jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licence was not eligible for deduction under section 80HHC as it did not fall under section 28(iiia). On this ground the order passed by the Assessing Officer was considered to be erroneous and to be prejudicial to the interests of the Revenue. 4. The assessee carried the decision of the Commissioner of Income-tax in appeal to the Income Tax Appellate Tribunal. The Tribunal, by its order dated August 31, 2006, dismissed the appeal filed by the assessee. Before the Tribunal, it was urged on behalf of the assessee that in so far as the issue of a DEPB licence is concerned, the decisions of the Tribunal were in favour of the assessee and it was on that basis the Assessing Officer had come to the conclusion that the DEPB licence would form pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Mumbai Bench in Pink Star [2000] 72 ITD 137. The Assessing Officer, according to the Tribunal, had thus followed the decisions of the Tribunal. The Tribunal held that there was also a decision in Crown Frozen Foods v. Addl. CIT [2005] 93 TTJ 485 (Mum). The Tribunal held that it had committed a mistake by dismissing the appeal only on a technical ground to the effect that the assessment order was not a speaking order. 6. Counsel appearing on behalf of the Revenue submitted that in the present case, the exercise of jurisdiction by the Tribunal cannot be relatable to the power conferred by section 254(2). The Tribunal has while exercising its jurisdiction under section 254(2) power to rectify a mistake apparent from the record. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3, the decision was not dealt with and consequently, that could form the subject-matter of an application under section 254(2). 8. Section 254(2) empowers the Tribunal to rectify a mistake apparent from the record and for that purpose to amend any order passed by it. The Supreme Court has held in its judgment in Honda Siel Power Products Ltd. v. CIT [2007] 295 ITR 466 that the underlying purpose of section 254(2) is based on the fundamental principle that a party appearing before the Tribunal should not suffer on account of a mistake committed by the Tribunal. When prejudice results from an order attributable to the Tribunal's mistake, error or omission, it is the duty of the Tribunal to set it right and it has nothing to do wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spite of that, the Assessing Officer dealt with the assessment in a two page order containing only nine perfunctory sentences. However, the dismissal of the appeal of the assessee was not based only on that ground since the Tribunal evaluated the issue on the merits by dealing with the two decisions which were cited by the assessee. When the application under section 254(2) was taken up by the Tribunal, once again reliance was sought to be placed on the decisions of the Mumbai Bench in Pink Star and of the Ahmedabad Bench in Pratibha Syntex. The Tribunal, while dealing with the application under section 254(2) virtually reconsidered the entire matter and this time came to the conclusion that the Ahmedabad Bench held in Pratibha Syntex that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee as having relied upon the decision of the Ahmedabad Bench in Pratibha Syntex. That apart, in Crown Frozen Foods, the Tribunal held that "on the given facts and circumstances of the case, it cannot be said that the order of the Assessing Officer is erroneous and prejudicial to the interests of the Revenue". Obviously, therefore, that decision turned on its own facts and circumstances. Above all, as noted before, the specific argument in that case, of the assessee was that the order of the Assessing Officer could not be treated as erroneous because the action of the Assessing Officer in allowing a deduction under section 80HHC in respect of the DEPB licence was in accordance with the view taken by the Tribunal in Pratibha Syntex. A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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