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TMI Blog2018 (1) TMI 1148X X X X Extracts X X X X X X X X Extracts X X X X ..... ominic And Dama Seshadri Naidu, JJ. For The Appellant : P. K. R. Menon, SR. Counsel GOI(Taxes) And Sri.Jose Joseph, SC, For Income Tax For The Respondent : Sri.S.Arun Raj And Smt.C. T. Suja JUDGMENT Dama Seshadri Naidu, J Facts: Complex and convoluted are the facts. So we will set them out a little more elaborately, as pleaded by the assessee. 2. Younskunju of Youns Cashew Industries, Kollam, is an income tax assessee. For the assessment year 1985-86, he filed the Return of Income on 31.09.1986, declaring a total income of ₹ 93,960/-. The Assessment Officer ( AO ) completed the assessment on 28.03.1988 under section 143(3) of the Income Tax Act ( the Act ). He arrived at a total income of ₹ 47,43,890/- and demanded, through Annexure A, tax of ₹ 1,39,71595/-, which included interest, too. 3. On appeal, the Commissioner of Income Tax ( CIT(A) ), through his order dt.24.11.1988, set aside the Annexure A order. Under section 143(3), read with sections 250 144 A, the CIT(A) arrived at a total income of ₹ 62,48,680/-. Meanwhile, on 28.08.1989, the assessee applied under section 245C of the Act before the Additional Bench o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee appealed to the CIT(A), Trivandrum, against the AO s order, dated 18.07.2006. But the appeal yielded nothing, as it was dismissed through Annexure D order, dt.08.12.2006. 11. On the issues of charging interest under section 220 (2) and disallowing interest under section 244 (1A) of the Act, the assessee appealed before the Income Tax Appellate Tribunal ( Tribunal ). The Tribunal, through Annexure E order, dismissed the appeal as not maintainable. When Tribunal s order was challenged, this Court, through Annexure F judgment, set aside the order and remanded the matter to the Tribunal, to be disposed of on merits. 12. On remand, through Annexure G order, the Tribunal allowed the assessee s appeal and cancelled the AO s rectification order under section 154 of the Act. This time, the Department came before us assailing the Tribunal s Annexure G order. Submissions: The Department s: 13. Sri P. K. Ravindranatha Menon, the learned Senior Counsel for the Revenue, has submitted that the Tribunal has erred in setting aside the AO s order as incorrect. According to him, the Tribunal misdirected itself by observing that 'the mistake apparent from record must be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Raj, the learned counsel for the respondent-assessee, besides perusing the record. The Substantial Questions of Law: 1. Is the supposed mistake in calculating the interest apparent from the record, and can it be corrected under section 154 of the Income Tax Act? 2. Are the findings of the Tribunal, in the facts and circumstances, perverse, illogical, and beyond section 154 of IT Act, 1961? 3. Has the Tribunal justified itself in interfering with what is said to be an order of rectification? Discussion: 19. The original assessment for the AY 1985-86 was completed in March 1988. On appeal, the CIT(A) set it aside in November 1988. The reassessment was completed in March 1991. But in the meanwhile, in August 1989, the assesse approached the Additional Bench of the Income Tax Settlement Commission, Chennai, invoking section 245C of the Act. 20. In June 1993, the Settlement Commission passed an order under section 245(4) of the Act; the AO gave effect to it through his proceedings on 26.06.1994. But he revised those proceedings on 14-08-2003. It was to adopt the assessee s correct share of income from a partnership firm; it resulted in a refund of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia (2010) 9 SCC 437 , the Supreme Court has further observed that review is a creature of the statute, and an order of review could be passed only when an express power of review is provided in the statute. In the absence of any statutory provision for review, exercise of power of review under the garb of clarification/ modification/ correction is not permissible. 27. In fact, the very section 154 of the Act came to be interpreted by the Supreme Court in CIT v. Ralson Industries Ltd. (2007) 2 SCC 326 at p. 330 The Court observed that the powers of rectification under section 154 and section 263 of the Act are different. Section 154 is not a power of review. An error being apparent on the face of record, according to the Supreme Court, is sine qua non . What is an error apparent on the face of record? 28. It needs no repetition that a judgmental error is not a reviewable error, nor can it be termed an error on the face of record. Error in reasoning or, for that matter, in applying law to facts is an appealable error. And that power of appeal is the creation of a statute. An error apparent on the face of record, on the other hand, an error that strikes one on m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in sub- section (1) and ending with the day on which the amount is paid: Provided that, where as a result of an order under section 154, or section 155, or section 250, or section 254, or section 260, or section 262, or section 264 or an order of the Settlement Commission under sub- section (4) of section 245D], the amount on which interest was payable under this section had been reduced, the interest shall be reduced accordingly and the excess interest paid, if any, shall be refunded: . . . 32. As seen from the proviso to sub-section (2) of Section 220, evidently, there can be variation in charging interest, and such variation can be effected through correction under Section 154 of the Act. Therefore, we fail to countenance the assessee's contention that Section 154 of the Act is unavailable for rectifying the mistakes committed under Section 220 of the Act. 33. Even otherwise, miscalculation of interest is, at best, an arithmetical error and it needs no elaborate cogitation or adjudication, long drawn or otherwise, to hold that there was an error committed. 34. Section 244 deals with interest on refund where no claim is needed. The provision to the extent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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