1991 (12) TMI 43

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..... such by the Commissioner of Income-tax, Orissa, tinder section 12A of the Act. For the assessment year 1985-86 , it filed a return disclosing loss of Rs. 15,76,880, before the Incometax Officer, Ward A, Circle II, Cuttack. The loss was arrived at after making provision for liabilities incurred, taking into account amounts receivable but not received. The Assessing Officer took the view that the assessee was doing business ; section 11(4) of the Act was applicable, and the method of accounting is such that the income cannot properly be deduced therefrom. By adopting the first proviso to section 145 of the Act, he determined the taxable income at Rs. 16,49,580. A sum of Rs. 30,91,093 which represented the amount receivable from sundry debtor .....

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..... ue. The Tribunal observed that the assessee's grievance related to rejection of its method of accounting, and the Tribunal has applied the provisions of section 11(4A) which were not raised before the authorities and, therefore, that was a clear and apparent error. Since the Tribunal applied the section suo motu, it constituted a rectifiable mistake in terms of section 254(2). The stand of the Revenue in essence in this writ application is that the approach of the Tribunal was erroneous. What is rectifiable under section 254(2) is a mistake apparent from the record and not any other mistake which may have crept into the Tribunal's order. The question whether on the facts, section 11(4A) had, application or not is not a mistake apparent fr .....

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..... provided the party who is affected by the consideration of new issues is afforded sufficient opportunity of being heard in the matter. The Tribunal, in its wisdom, thought that, on the facts, this provision of law had application. Whether in reality it had application or not, cannot be decided in an application for rectification under section 254(2). It involves a detailed analysis of factual aspects which is outside the scope of an application under section 254(2). Where an issue has not been raised by the parties and yet the Tribunal has recorded finding or a conclusion in respect thereof, a question of law referable under section 256(1) arises. This position has been succinctly stated in CIT. v Scindia Steam Navigation Co. Ltd. [1961] 42 .....

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