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TMI Blog1982 (11) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... ompetent to reverse its final decision in exercise of powers under section 254(2) of the Act ? " Pursuant to our direction, the Tribunal has stated the case and referred the questions. The assessee is a partnership firm engaged in the trade of tobacco and tobacco products. The relevant assessment years are 1971-72 and 1972-73. The assessee returned incomes of Rs. 12,736 and Rs. 9,925 respectively for the two years. The ITO rejected the return and assessed income of Rs. 50,810 and Rs. 38,790, respectively, for the years in question. The Tribunal, in second appeal, determined income of Rs. 35,420 and Rs. 26,520, respectively. These included sums of Rs. 12,000 and Rs. 5,000, respectively, as income from undisclosed sources. The ITO there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d no jurisdiction to impose the penalty and in view of the legal infirmity, the imposition of penalty was liable to be set aside. Though notice from this court was given and was duly served on the assessee, no appearance has been effected on its behalf before us. Learned standing counsel contends that the correctness of the decision in Dadhi Sahu's case [1976] 105 ITR 56 (Orissa), has been challenged in appeal before the Supreme Court. He has placed before us a subsequent decision of this court in the case of Pawan Kumar More v. ITO [1979] 118 ITR 1012 (Orissa), where, when the Tribunal refused to rectify the mistake on the basis of Dhadi Sahu's decision in an application made under section 154 of the Act, this court did not interfere. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made of any mistake, apparent from the record, either on his own motion by the Commissioner or the Appellate Assistant Commissioner or by the Appellate Tribunal on their own motion, or when such a mistake is brought to their notice by an assessee. Clearly that section does not enable an order to be reversed by revision or by review but permits only some error, which is apparent on the face of the record, to be corrected." A Bench of the Bombay High Court in Sidhramappa Andannappa Manvi v. CIT[1952] 21 ITR 333 (Bom), observed (p. 341): "In that case (16 ITR 59), the Madras High Court was not considering at all what was the effect of the order under section 35. It is true that they did say that section 35 had a limited application and it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng procedure adopted in the assessment proceedings would not be a mistake within the meaning of section 35: ...... Mistakes to discover which complicated processes of investigation and argument are required are outside the scope of section 35 of the Act." (underlining is ours). In CIT v. Sheolal Ramlal [1958] 33 ITR 47, the Madhya Pradesh High Court held (p. 54): " Rectification within the meaning of section 35 means the correction of an error which is apparent on the face of the record. That error must be demonstrable without the taking out of any additional evidence and without any detailed arguments pro and con." The Madras High Court again examined the question in CIT v. Sundaram [1964] 52 ITR 474 (Mad) and concluded by saying (p. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act to the Appellate Tribunal. The Tribunal took the view that there was no error apparent on the face of the record and, accordingly, declined to interfere. Assessee has, therefore, come with this writ application asking for quashing of the imposition of penalty on the ground that the statutory authority had no jurisdiction to exercise or alternatively to issue a direction to the Tribunal to rectify the mistake. On the ratio of the decision of this court in Dhadi Sahu's case [1976] 105 ITR 56 (Orissa), the imposition of penalty in the matter is admittedly without jurisdiction. Learned standing counsel has, however, contended that the penalty proceedings had become final several years back and it would not be appropriate to allow the con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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