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TMI Blog1993 (3) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... ly. Those assessments were made virtually accepting the returns filed by the assessee. A survey operation conducted by the Department under section 133A of the Income-tax Act, 1961, on September 11, 1980, revealed some secret books of account of the second respondent. The Department thereupon issued notices under section 148 of the Income-tax Act calling upon the second respondent to file its returns. The second respondent filed returns declaring total incomes of Rs. 2,43,920, Rs. 4,01,050 and Rs. 3,52,870, respectively, for the above three assessment years. By order dated November 30, 1981, the Income-tax Officer completed the reassessments on the basis of the above returns. Simultaneously, he found the second respondent to have concealed its income and proposed penalties under section 271(1)(c) of the Income-tax Act. The second respondent responded stating that it had voluntarily disclosed the income which was brought to tax in respect of the three years and the fact that there was difference between the income as returned originally and the income which was brought to tax in reassessment proceedings should not be a reason for imposing penalty. The Assessing Officer overruled tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised at the time of hearing of the appeal and that was a mistake which justified exercise of the power under section 254(2) of the Income-tax Act. It is that order which the petitioners assail in this writ petition. The question which we have to consider in this writ petition is whether the impugned order dated April 29, 1991, falls within or outside the purview of section 254(2) of the Income-tax Act. We have also to consider the preliminary objection which counsel for the second respondent has raised, viz., that the impugned order passed under section 254(2) can be the subject-matter of a reference under section 256(1) of the Income-tax Act and, therefore, this court may not grant any relief in this writ petition. We have heard counsel on both sides at considerable length during the course of which counsel referred us to a plethora of authorities in support of their respective positions. Even though counsel for the petitioners referred us to the facts preceding the order dated February 27, 1990, we are not persuaded to enter into those regions, since the only question which we have to consider is whether the order dated April 29, 1991, recalling the earlier order dated S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and had actually sought reference from the former order, and therefore, he was not entitled to invoke the jurisdiction of the court under article 226 of the Constitution of India. If the same logic is applied to the present case, it may perhaps be that the second respondent could rather have filed an application for reference under section 256(1) rather than for rectification under section 254(2) of the Act. Exactly to the contrary effect is the decision in CIT v. N. J. Dadabai [1978] 115 ITR 317 (AP). A Division Bench of this court held that no question of law can arise from an order refusing a plea for rectification under section 254(2) ; and such questions of law, if at all, can arise only from the order passed by the Appellate Tribunal under section 254(1) of the Act. In CIT v. (MIT. AR.S. AR.) Arunachalam Chettiar [1953] 23 ITR 180, the Supreme Court considered the provisions of the Indian Income-tax Act, 1922, viz., sections 33(4) and 66(2), and held that the order passed by the Appellate Tribunal could not be regarded as an order passed by the Appellate Tribunal under section 33(4) so as to attract the operation of section 66 and, therefore, the High Court could declin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax Officer has jurisdiction in reassessment proceedings for any year to impose penalty for concealment of income in the return filed in original assessment proceedings for that year, notwithstanding the fact that the assessee had submitted a correct return in compliance with the notice for reassessment. This view was taken by the jurisdictional High Court in the case of CIT v. Angara Satyam [1959] 37 ITR 230 (AP). Similar view was taken by the apex court also in the case of Narain Das Suraj Bhan v. CST [1968] 21 STC 104 (SC)." In its application under section 254(2) of the Act, the assessee disputed the date of the search operation and its venue. It contended that paragraph 16 of the order of the Appellate Tribunal dated September 13, 1990, merely reproduced paragraph 5 of the order of the first appellate authority and that did not amount to a finding on its contentions. An attempt was also made to argue that the levy of penalties for the three assessment years was based on several factual and legal grounds and those were not considered elaborately in the order dated September 13, 1990. It was, therefore, asserted that the Appellate Tribunal committed a "mistake apparent fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the record, it attempted to argue out a case for review or rewriting of the appellate order of the Tribunal. The application proceeded on the assumption that paragraph 16 of the order dated September 13, 1990, contained findings adverse to the assessee. But those findings were said to be only reproductions of paragraph 5 of the order of the Appellate Assistant Commissioner. We are of the opinion that what the second respondent wanted was to recast the order of the Appellate Tribunal dated September 13, 1990, in its entirety by detailed arguments why a revised order should be made. The attempt was not to point out why an obvious and patent mistake should be rectified, but to make out inexactitudes and deficiencies in the order by a long drawn process of reasoning. We have to consider the question on the merits in the light of these factual details. Counsel for the second respondent referred us to the decision of Jeevan Reddy C. J. and V. N. Mehrotra J., of the Allahabad High Court in Laxmi Electronic Corporation Ltd. v. CIT [1991] 188 ITR 398, wherein it was held that (headnote) : "Where the Tribunal fails or omits to deal with an important contention affecting the maintainab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TAT [1992] 196 ITR 590 held that (headnote) : the power to rectify the mistake does not cover cases where a revision or review of the order is intended. 'Mistake' means to take or understand wrongly or inaccurately ; to make an error in interpreting ; it is an error ; a fault ; a misunderstanding ; a misconception. 'Apparent' means visible ; capable of being seen ; 'easily seen ; obvious ; plain. mistake which can be rectified under section 254(2) is one which is patent, which is obvious and whose discovery is not dependent on argument or elaboration". In CIT v. ITAT [1992] 193 ITR 377 (Orissa), the same court held that (headnote) : "the power of amendment under section 254(2) of the Income tax Act, 1961, is to be exercised only when there is a mistake apparent from the record." It has to be observed that the above decision was rendered on a writ petition against an order of recall of its order by the Tribunal, just as in the present case. We are of the opinion that the Appellate Tribunal, being a creature of the statute, has to confine itself in the exercise of its jurisdiction to the enabling or empowering terms of the statute. It has no inherent power. Even otherwise, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter according to law. We do not propose to leave it to the Tribunal to pass fresh orders on the application which the second respondent had filed under section 254(2) of the Act. As the application was not justified in terms of section 254(2), the Tribunal had no jurisdiction to pass an order recalling its order dated September 13, 1990. We quash the order. We also interdict the Tribunal from passing any order on the application of the second respondent under section 254(2) of the Act. We hold that the only order which the Tribunal could have passed on that application was an order rejecting the request of the second respondent to rectify the order of the Tribunal dated September 13, 1990. In the result, we allow the writ petition, quash the order of the Tribunal dated April 29, 1991, and restore the order of the Tribunal dated September 13, 1990. Parties will suffer their respective costs. Immediately after the judgment was pronounced, counsel for the petitioners made an oral application for leave to file an appeal to the Supreme Court under article 134A of the Constitution of India. Since we have based ourselves mostly on decisions of the Supreme Court on the points which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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