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TMI Blog2012 (3) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... as by the diary maintained by the Authorized Representative of the assessee. The learned Authorised Representative of the assessee vehemently relied upon those documents and contended that in the interest of justice the aforementioned order of the Tribunal should be recalled as the assessee could not avail the personal representation to argue the aforementioned appeal. 3. On the other hand, the learned Departmental Representative objected to the said submission of the assessee and contended that what effectively has been done by the Tribunal is that the matter has been restored back to the file of the AO, therefore, no prejudice has been caused to the assessee and, therefore, the order of the Tribunal should not be recalled simply for the reason that the assessee did not get an opportunity of hearing before the Tribunal. 4. We have carefully considered the rival submissions in the light of the material placed before us. We find substance in the argument of the learned Authorised Representative. Though the written submissions of the assessee were on file, but in the written submissions it has not been noted that the appeal of the Revenue should be decided by considering these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llaneous application as well as in his arguments the learned Authorised Representative of the assessee has submitted that the learned Authorised Representative of the assessee was not heard in person and hence the order passed under s. 254(1) is ex parte and should be recalled in entirety. Under s. 254(2) of the Act the Tribunal may, at any time within four years from the date of order, with a view to rectifying any mistake apparent from record, amend any order passed by it under s. 254(1), if the mistake is brought to notice by the assessee or the AO. Such a mistake must be an obvious and patent mistake and not something which can be established by a long-drawn process of reasoning on points on which there may conceivably be two opinions. It is well-settled that a statutory authority cannot exercise power of review unless such power is expressly conferred on it. In this regard, Hon'ble Supreme Court in the case of Patel Narshi Thakershi v. Pradyumansinghji Arjunsinghji [1971] 3 SCC 844 has observed at p. 847 as under : 4......................It is well-settled that the power to review is not an inherent power. It must be conferred by law either specifically or by necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Such error should not require any extraneous matter to show its incorrectness. To put it differently, it should be so manifest and clear that no Court would permit it to remain on record. If the view accepted by the Court in the original judgment is one of the views, the case cannot be said to be covered by an error apparent on the face of the record. 10. The Full Bench of Hon'ble Delhi High Court in the case Lachman Dass Bhatia Hingwala (P) Ltd. v. Asstt. CIT [2011] 330 ITR 243 has held that the decision rendered in Honda Siel Power Products Ltd. (supra) by the Apex Court is an authority for the proposition that the Tribunal under certain circumstances can recall its own order and there is no absolute prohibition in this regard. The Tribunal, while exercising the power of rectification under s. 254(2) of the Act, can recall its order in its entirety if it is satisfied that prejudice has resulted to the party which prejudice is attributable to the Tribunal's mistake, error or omission and which error is a manifest error and it has nothing to do with the doctrine or concept of inherent power of review. When the justification of an order passed by the Tribunal recalling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nobody will be prejudiced by act of Court, extends to correcting an error from an accidental slip or omission. Such power is available under s. 254(2) of the Act, which is akin to s. 152 of the CPC. In Niyamat Ali Molla v. Sonargon Housing Co-op. Society Ltd. [2007] 13 SCC 421, after referring to earlier judgments, the scope of such power was considered and it was observed that the said power was neither akin to power of review nor could clothe the code to modify judgment on the merits. The scope of power of rectification has been repeatedly considered, inter alia, in Volkart Bros., Deva Metal, Saurashtra Kutch ( supra) and such power is limited to correcting an error apparent on the face of record and not to an error to be discovered by long drawn process of reasoning. Thus neither by invoking the inherent power nor the principle of mistake of Court not prejudicing a litigant nor by invoking the doctrine of incidental power, the Tribunal could reverse a decision on merits. Power available to a Court of record, ex debito justitae or power to be invoked where an order may be nullity, on account of having been passed without service on a party, stand on different footing. 13. Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons has discussed the facts, provisions of law and judicial pronouncements on the issue and has defended the order of learned CIT(A). After discussing the legal position and case law, the following prayer was made : In light of above, it is most humbly prayed that the order of Hon'ble CIT(A) may kindly be confirmed by considering following : (a) The learned AO has taken grounds from s. 50(c), which is not applicable on appellant as appellant being purchaser. (b) That s. 69B is not applicable as no out of books expenditure has been proved by learned AO. (c) The DVO's report, on which the AO has based his order is defective being prepared for wrong date. It is prayed accordingly. From the reading of the above it is clear that the assessee in the written submissions specifically and unequivocally requested the Tribunal to decide the appeal on the basis of the written submissions, which is evident from the language used by the representative of the assessee. Moreover, the specific statement in the written submissions, as above, clearly shows the intention of the assessee's representative not to put in personal appearance before the Bench at the time of f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c. 2010, has not pointed out any mistake apparent from record in the order made under s. 254(1) of the Act. Therefore, the decision made after considering the written submissions filed by the assessee cannot be treated as an ex parte order. During the course of hearing, the learned Authorised Representative of the assessee had mainly relied on the ground that the learned Authorised Representative was not heard in person. When the assessee, in its written submissions, had specifically asked for the appeal to be decided on the basis of written submissions, as discussed above, recalling of the entire order on the pretext of non-appearance amounts to nothing other than reviewing the order, which is not permissible in law. In the order under s. 254(1), the Tribunal, after a detailed discussion has upheld the applicability of provisions of s. 142A for valuation of investments made under s. 69B of the Act. It is because of this reason that the assessee has filed the miscellaneous application with the sole motive of getting the order dt. 8th Oct., 2010 reviewed. The learned Authorised Representative of the assessee had filed an affidavit and to support the contents of the affidavit has fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Members who originally heard this miscellaneous application arising in ITA No. 1063/Del/2010 for asst. yr. 2006-07, the Hon'ble President has nominated me as a Third Member to resolve the difference under s. 255(4) of the IT Act, 1961. 2. The agreed point of difference referred to me reads as under : Whether on facts and in the circumstances of the case, it will be appropriate in law to recall order dt. 8th Oct., 2010 passed in ITA No. 1063/Del/2010. 3. The facts of the case are that the appeal of the Revenue was decided ex parte by the Tribunal vide its order dt. 8th Oct., 2010. Thereafter, the assessee filed a miscellaneous application praying for recall of the ex parte order of the Tribunal. The ground taken by the assessee in its miscellaneous application for non-appearance on the date of hearing was that the chartered accountant of the assessee inadvertently noted the date of hearing as 9th Sept., 2010 in place of 7th Sept., 2010. 4. The learned JM who took up the case for writing the order for the Bench accepted the contention of the assessee raised in its miscellaneous application. He noted that though the assessee had filed written submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case laws which were required to be responded by the assessee. So, there was no apparent mistake on record. He further went on to observe that the production of photocopies of pages of diary of the chartered accountant by the assessee is nothing but self-serving documents and an afterthought. Applying the above principles, the learned AM was of the opinion that the miscellaneous application filed by the assessee requesting for recalling of the ex parte order of the Tribunal needs to be dismissed. 7. That is how, in this manner, the difference has come to me for resolution. 8. At the time of hearing before me, it is stated by the learned counsel for the assessee that the learned JM has accepted that there was reasonable cause for assessee's failure on the date of hearing. He, therefore, proposed to recall the ex parte order of the Tribunal in ITA No. 1063/Del/2010. The learned AM differed with him because he was of the opinion that there was no apparent mistake in the order of the Tribunal in terms of s. 254(2). The learned counsel pointed out that the assessee's application was under r. 25 of the ITAT Rules, 1963 and in proviso to r. 25, it has been specifically provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well as the dissenting orders of both the Members. The main controversy that requires to be decided is whether the miscellaneous application filed by the assessee is to be treated as filed under s. 254(2) of the IT Act, 1961 or under r. 25 of the ITAT Rules, 1963. 12. It is observed that the assessee has filed the present miscellaneous application for recall of the ex parte order of the Tribunal dt. 8th Oct., 2010 on the appeal filed by the Revenue by which the Tribunal had restored the issue to the file of the AO. The only ground taken by the assessee in its miscellaneous application is that there was a bona fide reason for non-appearance on the part of the assessee on the fixed date of hearing. In the miscellaneous application, the assessee has nowhere stated that there is an apparent mistake in the order of the Tribunal which needs rectification. After explaining the circumstances for his failure to appear on the date fixed for hearing, the assessee prayed as under : In view of above circumstances, it is respectfully prayed that ex parte order may please be recalled and opportunity of hearing may please be granted by recalling the ex parte order. Affidavit from our counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... den, New Delhi-110027, do hereby solemnly declare and affirm on oath as under : 1. That I am a practising chartered accountant as partner in M/s Deepak Gulati Associates having its office at 23, Hanuman Road, Connaught Place, New Delhi. 2. That my firm was engaged to represent the matter of M/s Five Star Health Care (P) Ltd. before Hon'ble Tribunal for asst. yr. 2006-07 in ITA No. 1063/Del/2010. 3. That on 12th July, 2010, I appeared before the Hon'ble Bench and filed application for seeking adjournment before the Hon'ble Bench. 4. That Hon'ble Bench had granted the adjournment and I noted the next date of hearing in my diary as 9th Sept., 2010. 5. That on 9th Sept., 2010, I visited the office of Hon'ble Tribunal, where I learnt that date of hearing was 7th Sept., 2010. 6. That later on, I checked up my diary and I noticed that in my diary I had noted the date of hearing as 9th Sept., 2010 instead of 7th Sept., 2010. 16. In support of the affidavit, he has also furnished the photocopy of his diary in which the hearing of the assessee's appeal was noted on 9th Sept., 2010. The learned JM accepted the assessee's explanation which wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rule of natural justice. When the appeal is fixed for hearing, then both the parties to the appeal must be heard. However, r. 23 clearly provides that after hearing the appellant, the Tribunal, if necessary, shall hear the respondent. Now, what is the meaning of this rule ? Whether the Tribunal has discretion to decide the appeal after hearing the appellant only? In my opinion, the proper interpretation of this rule would be that if, after hearing the appellant the Tribunal is of the opinion that there is no merit in the appeal and the appeal is required to be dismissed, then there is no necessity to hear the respondent. In any other situation, the respondent must be heard. The hearing of both the parties is fundamental to the dispensation of justice. No party can be condemned unheard. It is only when the matter is to be decided against the appellant, the respondent is not required to be heard. I am unable to agree with the view of learned AM that the respondent is required to be heard only if the appellant adduces additional evidence, relies on new case law or advances new argument. In the present case, the appeal before the Tribunal was filed by the Revenue. The Tribunal, after ..... X X X X Extracts X X X X X X X X Extracts X X X X
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