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TMI Blog2018 (6) TMI 1466X X X X Extracts X X X X X X X X Extracts X X X X ..... ise, 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. As to correcting a mistake committed by an authority in calculating interest on refund, it is always open for the authorities to rectify that mistake. Again, in our reckoning, the reasons assigned to our interpretation of Section 220 apply here, too - decided in favour of revenue X X X X Extracts X X X X X X X X Extracts X X X X ..... 220 (2) and 245D (6A) of the Act respectively. 9. Once again, the AO, in his proceedings dated 18.07.2006, erroneously calculated interest from April 1988 to April 1991. Two months later, through Annexure C, he rectified the mistake and charged interest under section 220 (2) from April 1991 to June 1993: the interest was quantified at ₹ 3,49,935/-. 10. Again aggrieved, the assessee 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Settlement Commission, for it exercises exclusive jurisdiction once it admits a case under section 245-I of the Act. In other words, the AO is not empowered to levy interest u/s. 220(2) regarding a matter decided by the Settlement Commission. 18. Heard Sri P. K. Ravindranatha Menon, the learned Senior Counsel for the Revenue, and Sri Arun 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 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e face of the record. Rectification implies the correction of an error or a removal of defects or imperfections. It implies an error, mistake, or defect which after rectification is made right. 26. Quoting with approval its earlier decision in Kalabharati Advertising v. Hemant Vimalnath Narichania (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riod limited under subsection (1), the assessee shall be liable to pay simple interest at one and one- half per cent for every month or part of a month comprised in the period commencing from the day immediately following the end of the period mentioned 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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