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TMI Blog2006 (2) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... /96. This appeal was admitted for final hearing on the following substantial questions of law : "1. Whether the Income-tax Appellate Tribunal was justified in entertaining the application made under section 254 of the Income-tax Act and further erred in granting the relief to the assessee by holding that there was an error apparent on face of the record as required to be made out in rectification of an order dated September 30, 2002, passed in I. T. A. No. 1046 of 1996 ? 2. Whether the Income-tax Appellate Tribunal was justified in holding that the assessee is entitled to claim deduction under sections 80HH and 80-I in respect of the miscellaneous income earned from other sources (and not derived from industrial undertaking) thereby taking a contrary view to the law laid down by the Supreme Court in the case reported in CIT v. Sterling Foods [1999] 237 ITR 579 ?" 2. The respondent (assessee) is engaged in ginning business. The dispute in this case relates to the assessment year 1992-93. The question arose as to whether the assessee who has surrendered voluntarily a sum of Rs. 9 lakhs for being taxed can be treated as an income derived from their industrial undertaking f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not explain this situation satisfactorily. This fact makes it clear that it is not necessary that the assessee had earned this undisclosed income from the industrial activity because in that case he would have simply written off the bogus credits and credited the concerned amount in the profit and loss account and not introduced fresh cash in the books of account. We also find that after the decision of the hon'ble Supreme Court in CIT v. Sterling Foods [1999] 237 ITR 579 which was rendered on April 15, 1999, which is after the decision rendered by the Tribunal for the assessment year 1991-92, i.e., on February 9, 1999, the assessee has to prove that income was derived from an industrial activity so as to make it entitle to deduction under sections 80HH and 80-I. We find that the assessee has not brought any evidence to this effect that the so-called concealed income was derived for industrial activity. Decision regarding telescoping relied on by the learned authorised representative cannot be applied for allowing special deduction under Chapter VI-A. Telescoping what has been decided by various courts is that a particular item on which addition has been made can be treated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel, the Tribunal in the garb of seeking rectification as provided under section 254(2) ibid, recalled the entire order passed in appeal and dismissed the appeal. This in the submission of learned counsel was not permissible in law and ought not to have been done. In reply, learned counsel for the respondent (assessee) supported the impugned order and contended that the rectification was properly done. 6. Having heard learned counsel for the parties and having perused record of the case, we are inclined to allow the appeal and answer question No. 1 in favour of the appellant (Revenue) and against the respondent (assessee). As a necessary consequence, it is not necessary to answer the second question which in our humble view does not arise out of the impugned order. 7 . In our considered opinion, law on the question of exercise of powers available under section 254(2) ibid is fairly well-settled. A power to rectify the mistake in the order is confined to only those errors which are apparent from the record of the case. In other words, every error cannot give rise to seek rectification under section 154 or 254, as the case may be, but only those errors which ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or upturning such order in favour of the assessee just after few days by invoking the powers conferred under section 254(2) of the Act. 9. In our considered view, mere perusal of the impugned order would show that it does not satisfy the rigour of section 254(2) ibid. The Tribunal has again gone into the facts little realising the scope and ambit of section 254(2) and proceeded to set aside the appellate order by "dismissing the appeal" which they had initially "allowed it". We are satisfied that the appellate order did not suffer from any mistake much less mistake/error apparent on its face so as to entitle the Tribunal to recall the same in its entirety. Indeed the Tribunal while allowing the application made under section 254(2) read with rule 34A did not advert to any of the requirement of these two provisions as to how and in what manner these two provisions are attracted. Mere mention that there is an error, the Tribunal did not assume jurisdiction to recall their well reasoned order passed in appeal. 10. A well reasoned decision which has gone in favour of the Revenue in regularly constituted appeal cannot be upturned by taking recourse to the provisions of section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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