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TMI Blog1997 (9) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee in response to the notice of hearing, addressed a letter dated 18-3-1989 to the CIT(Appeals) stating therein that as per guidelines of the Central Board of Direct Taxes, the assessee has filed revised return and has paid tax in order to settle the dispute in assessment and is awaiting order of the CIT(Appeals) accepting the settlement of tax liability. The assessee also requested the CIT(Appeals) in that letter to adjourn the hearing on the ground that once the order of the CIT is received the assessee may consider to withdraw the appeal. The CIT(Appeals) observed that vide petition dated 27-12-1988 filed before the CIT for settlement of tax liability, the assessee has declared Rs. 4,25,000 as additional income for the assessment year 1984-85 and Rs. 1,97,500 for the assessment year 1983-84 and has paid additional tax thereon and passed the following order on 21-3-1989 : " In view of these facts and the appellant's request to withdraw the appeal by letter dated March, 1989, the appeal is dismissed." 3. Thus, the CIT(Appeals) dismissed the appeal as according to him, the assessee has requested to withdraw the appeal. 4. The assessee then filed a petition under section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opy of the CIT(Appeals)---XII's order dated 5-4-1991 in respect of the penalty and pointed out that in para 1.3 of his order this CIT(Appeals) has also mentioned that for that very reasons the assessee withdrew the appeal filed against quantum-assessment. In view of this, he pleaded that CIT(Appeals)---VI, Calcutta in his original order and the CIT(Appeals)---XII, Calcutta while dealing with the appeals against penalty order have mentioned in their orders in clear terms that appeal was withdrawn by the assessee on the ground of settlement petition dated 9-2-1989 filed before the CIT. He also contended that the CIT(Appeals), therefore, has no jurisdiction to decide appeal under section 154 when it was dismissed as withdrawn. According to him, the Department objects to the fresh hearing of the appeal by the CIT(Appeals). 7. The learned counsel for the assessee Shri R. Salarpuria, Advocate contended that the CIT(Appeals) being one of the IT authorities does have power to rectify his order under section 154. According to him, the Department had conceded and had no objection to quantum and only dispute is as to whether CIT(Appeals) is empowered to recall and redecide appeal already dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 845/29 Taxman 215 (Delhi) 12. Dunlop Rim & Wheel Co. Ltd. v. CIT [1994] 73 Taxman 134 (Cal.) 13. CIT v. Ballabh Prasad Agarwalla [1997] 90 Taxman 283 (Cal.) 14. Tej Pal Om Parkash v. ITO [1982] 2 ITD 107 (Delhi) 15. ITO v. Dharam Chand (1986) Taxation 82(4)--131 (Chd.) 16. Prakashchand Lunia v. ITO [1996] 56 ITD 1 (Jp.) 17. Suresh Textiles v. ITAT [1978] 114 ITR 680 (All.) 18. Joseph Michael & Bros. v. ITAT [1992] 199 ITR 467/64 Taxman 116 (Ker.) 19. ITO v. Murlidhar Sarda [1975] 99 ITR 485 at page 489 (Cal.). 8. In reply, the learned D.R. submitted that the CIT(Appeals) has acted upon a specified request of the assessee. He further contended that both the CIT(Appeals)s cannot be wrong in their orders to mention the withdrawal of appeal by the assessee. 9. We have carefully considered the rival contentions, relevant facts and materials placed on the record and we have also gone through the decisions on which reliance is placed by the learned counsel for the assessee. In order to appreciate the position of facts and law in a better way the section 154 as existing at the relevant point of time is reproduced as under : " 154. Rectification of mistake.---(1) With a view t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . What is first ingridient of the section is a mistake apparent from record. In this case, we notice from the order of the CIT(Appeals) that he has dismissed the appeal on the basis of the facts and request to withdraw the appeal by the assessee vide letter dated 18th March, 1989. In other words, he has dismissed the assessee's appeal on the basis of the assessee's request to withdraw the appeal. But from the assessee's letter dated 18th March, 1989 which is placed at page 1 of the paper book and which is reproduced as under : "As per guideline of the CBDT, the company filed revised return and paid tax on the admitted tax liability in order to settle the dispute in the assessment. Company is awaiting the order of the Commissioner accepting the settlement of tax liability of the company. We, therefore, request you to kindly adjourn the hearing since we may consider to withdraw the appeal once the order of the Hon'ble Commissioner of Income-tax is received." It is evident from second para of the letter of the assessee that the assessee has requested the CIT(Appeals) to adjourn the hearing since the assessee may consider to withdraw the appeal once the order of the CIT is received. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... awal of an appeal and, therefore, the mistake is obvious and patent one. Non-considering of request of assessee correctly is a glaring, obvious and self-evident mistake which is apparent from the record. The assessee requested for adjournment and the CIT(Appeals) has treated the same as request for withdrawal of appeal : " 2. In the case of West Bengal State Warehousing Corpn. v. CIT [1986] 157 ITR 149, the Hon'ble Calcutta High Court held that a glaring and an obvious error amounts to a mistake apparent from the record. 3. ITO v. Raleigh Investment Co. Ltd. [1976] 102 ITR 616, wherein the Calcutta High Court has held that in order to come within the ambit of section 154, it is necessary that the mistake be obvious, patent and self-evident and a mistake on which conceivably there can be two opinions cannot be rectified by virtue of section 154 of the Act. In case where two views are not possible, if by misreading the section or miscalculation of the rate provided in the section, a mistake is committed, such a mistake would come within the purview of section 154." In the instant case also, the CIT(Appeals) misread the adjournment application where two opinions were not possible a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, appropriate directions to the authority against whose decision the appeal is preferred to dispose of the whole or any part of the matter afresh, unless forbidden from doing so by statute. " As the CIT(Appeals) is one of the appellate authorities, he has the jurisdiction as well as the duty to correct all errors in the proceedings under appeal. Thus, the CIT(Appeals) has acted within the compass of his jurisdiction. 13. It is also noticed that according to the provisions of sub-section (2)(b) of section 154, the mistake apparent from record has been brought to the notice of the CIT(Appeals) and as per provisions of sub-section (4) of section 154 he has passed an order also under section 154 and that order has been passed within four years in accordance with the provisions of sub-section (7). In this way, the CIT(Appeals) has fulfilled all the conditions laid down in section 154. 14. The third aspect to be looked into is whether any order sought to be rectified is in existence. We find that the original order passed by the CIT(Appeals) on 21st March '89 is an order under section 250 wherein the appeal is dismissed. As the CIT(Appeals) has rectified that very order by passing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd reviewing the appeal separately is not allowed under the provisions of law. It may be pointed out that only the Appellate Tribunal is empowered to recall its ex parte order under rule 24 of the Appellate Tribunal Rules, 1963. Therefore, the only alternative action left with an authority is to rectify the original order of dismissal of appeal under section 154 directly and this is what the CIT(Appeals) has done to remove the obvious self-evident and glaring mistake from original order. The CIT(Appeals) rectified the mistake of dismissal of appeal as withdrawn, by deciding the appeal afresh on merit under section 154. In our opinion, he was well within his power, competence and jurisdiction. 18. In the case of CIT v. Mithalal Ashok Kumar [1986] 158 ITR 755/[1987] 32 Taxman 370, the Hon'ble Madhya Pradesh High Court held that the direction of re-hearing of the appeal did not amount to review in the strict sense of the term and, therefore, the Tribunal was justified in setting aside its order for fresh disposal. This means the re-hearing of the appeal for fresh disposal under section 154 is also allowed as it was approved under section 254(2) by the Hon'ble M.P. High Court. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in the case of Bhubaneswar Flour Mills, wherein it was held as under : "Where a first appeal is dismissed without examination of merits on some technical ground of procedural defect, in second appeal, the merit of the matter would not be available to be adjudicated though a second appeal lay by treating the dismissal of the first appeal as an appellate order." As the Orissa High Court has recognised that the dismissal of first appeal on some technical ground is an appellate order, in our opinion, the CIT(Appeals) was well within his power and competence to rectify this kind of appellate order under section 154 in the instant case. On these facts and circumstances of the case and for the reasons discussed in the aforesaid paragraphs, we see no merit in all the contentions and arguments raised by the learned D.R. They are, therefore, not tenable in the absence of any material and evidence in favour of the revenue. We have also examined all the case laws on which reliance is placed by the learned counsel for the assessee but found that out of 19 case laws 12 pertain to ex parte orders and two relate to stay orders dealt with by the Income-tax Appellate Tribunal. They are not disc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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