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TMI Blog2013 (12) TMI 1311X X X X Extracts X X X X X X X X Extracts X X X X ..... ny was engaged in the manufacture and sale of black and galvanized steel tubes. For the year under consideration, it had filed its return declaring a loss of Rs.2,67,520/-. The relevant assessment was completed by the Income-tax Office, Central Circle IV, Kanpur (A.O.) vide order u/s 143 (3) read with Section 144 B of I.T. Act, 1961 dated 25.9.1994 on a total income of Rs.10,92,020/-. The major addition made by the A.O. was of Rs.10,78,886/- on account of difference in respect of three items of stock in the stock statements submitted to the Hindustan Commercial Bank with whom such stocks had been hypothecated for obtaining the overdraft facility and the stocks as per the book of account. The A.O. took the 'peak' of each items as the base for making the addition. The entire addition was deleted by the Commissioner of Income-Tax (C.I.T.) (Appeals), Kanpur vide order dated 14.03.1985. On appeal by the Department, The Tribunal vide is order dated 30.10.1985, in I.T.A. No. 919 (Alld) of 1985, set aside the order of the C.I.T. (Appeals) on this issue, with specific directions. Vide his order dated 22.12.1986, passed in pursuance of the directions of the Tribunal, the C.I.T. (Appeals) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record, reviewed its judgment, which is not permissible. Sri Chopra submits that the Tribunal had considered the judgment of this Court, which is a jurisdictional court to the Tribunal, in Swadeshi Cotton Mills Co. Ltd., reported in 125 ITR 3, and held that the decision is binding upon it, which according to the Tribunal covers the facts of the case. The Tribunal allowed the department's appeal and restored the order of the Assesssing Officer. The Tribunal thereafter had entertained the application of the assessee and passed an order on 30.07.1993, whereby exercising its power conferred under Section 254 (2) of the Act, it recalled its order dated 6.11.1990 on the same facts and considering the same judgment in M/s. Swadeshi Cotton Mills. Sri Chopra, submits that the Tribunal while exercising powers conferred under Section 254 (2) of the Act, could not have reviewed its order. He has relied upon judgment of Delhi High Court in J.N. Sahni Vs. Income Tax Appellate Tribunal and others [2002 ITR (257) 17]; judgment of Rajasthan High Court in Champa Lal Chopra Vs. State of Rajasthan [2002 ITR (257) 74] and judgment of Madhya Pradesh High Court in Agarwal Warehousing and Leasing Ltd V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra) and Saurashtra Kutch Stock Exchange Ltd (Supra), has elaborated the powers of the Tribunal under Section 254 (2) of the Act. The discussion in the judgment is quoted as follows:- But what has been stated by the apex court in Honda Siel Power products Ltd [2007] 295 ITR 466 (SC) is based on the doctrine of prejudice. Their Lordships have clarified that they were not proceeding on the doctrine or concept of inherent power. Analyzed from this perspective, there can be no trace or shadow of doubt that the said decision is an authority for the proposition that the tribunal in certain circumstances can recall its own order and section 254 (2) of the Act does not totally prohibit so. In this context, we may refer with profit to the decision to Asst. CIT Vs. Saurashtra Kutch Stock Exchange ltd [2003] 262 ITR 146 wherein a Division Bench of the Gujarat high Court was dealing with a writ petition preferred under articles 226 and 227 of the Constitution of India. In the said case, the assail was to the order dated September 5, 2001, passed by the tribunal whereby the Tribunal had recalled the earlier order dated October 27, 2000. The Division Bench dealt with the contention canvassed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceeded to state as follows (page 21): "Rectification of an order stems for the of an order stems from the fundamental principle that justice above all. It is exercised to remove the error and to disturb the finality. In S. Nagraj Vs. State of Karnataka [1993] Supp 4 SCC 595, 618, Sahai J stated: 'Justice is virtue which transcends all barriers. Neither the rules of procedure nor technicalities of law can stand in its way. The order of the court should not be prejudicial to anyone. Rule of stare decisis is adhered for consistency but it is not as inflexible in Administrative law as in Public Law. even the law bends before justice. entire concept of writ jurisdiction exercised by the higher courts is founded on equity and fairness. If the court finds that the order was passed under a mistake and it would not have exercised the jurisdiction but for the erroneous assumption which in fact did not exist and its perpetration shall result in miscarriage of justice then it cannot on any principle be precluded from rectifying the error. mistake is accepted as valid reason to recall an order. Difference lies in the nature of mistake and scope of rectification, depending on if it is of fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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