M/s. K.R.S.A.Karuppan Chettiar Firm, Madurai v. ITO, Madurai

IN THE INCOME-TAX APPELLATE TRIBUNAL CHENNAI B BENCH CHENNAI. BEFORE SHRI.U.B.S. BEDI J.M. & SHRI.ABRAHAM P. GEORGE A.M. M.P. NOS.319 AND 320/MDS/2009 [IN ITA NOS. 783 AND 782/MDS/2008] ASSESSMENT YEARS: 1997-98 AND 96-97 K.R.S.A. KARUPPAN CHETTIAR (FIRM) E-1 INDUSTRIAL ESTATE MADURAI. [PAN:AABFK0743M] VS. THE INCOME TAX OFFICER WARD I (2) MAUDRAI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI N. DEVANATHAN REVENUE BY : SHRI P.B. SEKHARAN ORDER PER U.B.S. BEDI J.M . BY MEANS OF THESE TWO MISCELLANEOUS PETITIONS THE ASSESSEE SEEKS TO GET RECALLED THE CONSOLIDATED ORDER OF THE TRIBUNAL IN ITA NO S. 782 AND 783/MDS/2008 FOR THE ASSESSMENT YEARS 1996-97 AND 97-98 DA TED 30.04.2009 MAINLY ON THE GROUND THAT NO SPECIFIC GROUND WAS RAISED BY THE DEPARTM ENT AGAINST THE ORDER OF THE LD. CIT(A) WHETHER HE HAD TRAVELLED BEYOND THE SUBJECT MATTER REMITTED BY THE ITAT IN EARLIER PROCEEDING. IT WAS SUBMITTED AT THE TIME OF HEARING THAT ONCE THE ISSUE HAS TO BE DECIDED AFRESH THE LD. CIT(A) HAS GOT AMPLE JU RISDICTION AND JURISDICTI ON IS NOT RESTRICTED WHICH IS SUPPORTED BY THE BIND ING DECISION IN THE CASE OF CIT V SETH MANICKALAL FOMRA AS REPORTED IN 99 ITR 470 (M AD) AND IN THE CASE OF CI T V. VEERAPPAN 215 ITR 533. SO THE ACTION OF THE TRIBUNAL IS NEITHER PROPER NOR JUSTIFIED TO REMIT THE MATTER BACK TO THE FILE OF THE LD. CIT(A) WITH THE DIRECTION TO ADJUDICATE T HE ISSUE STRICTLY IN ACCORDANCE WITH THE DIRECTION GIVEN IN THE EARLI ER TRIBUNALS DECISION. THEREFORE THE ORDE R OF THE TRIBUNAL SHOULD BE RECALLED AND APPEALS OF THE REVENUE MAY BE DISMISS ED. RELIANCE WAS PLACED ON THIRD MEMBER DECISION AS REPORTED IN THE CASE OF VINDHYA TELELIN K LTD. V. JCIT (119 MP NOS.319 & 320/MDS/09 2 TTJ 433) AND HONBLE PUNJAB & HARYANA HIGH C OURTS DECISION IN THE CASE OF VITHAL OVERSEAS V. CIT 183 TAXMANN 429 TO SUPPORT ITS PLEA. 2. THE LD. DR STRONGLY OP POSED THE PETITIONS OF THE A SSESSEE AND PLEADED THAT SINCE DIRECTION ISSUED BY THE ITAT ON EARLIER OC CASION HAS NOT BEEN PROPERLY COMPLIED WITH BY THE LD. CIT(A) THEREFORE IN APPEAL AGAINST SUCH ORDER THIS BENCH OF THE TRIBUNAL HAS GIVEN PROPER DIRECTION THEREF ORE IT DOES NOT REQUIRE TO BE INTERFERED WITH. IT WAS THUS PLEADED THAT SINCE THE SIMPLE DIRECTION HAS BEEN GIVEN BY THE ITAT TO PASS THE ORDER STRICTLY IN ACCORDANCE WITH DIRE CTION GIVEN IN THE EAR LIER ORDER THEREFORE IT CANNOT BE SAID THAT EITHER THE TRIBUNAL HAS COMMITTED ANY MISTAKE OR DIRECTION GIVEN IS NOT IN ACCORDANCE WITH LAW. OTHERWISE IN CASE THE PETITIONS OF T HE ASSESSEE ARE ACCEPTED THAT WOULD AMOUNT TO REHEARING OF THE APPEAL WHICH IS NOT PE RMISSIBLE UNDER SECTION 254(2) AS SUCH IT WAS PRAYED FOR DISMISSAL OF THE PETITIONS FOR BOTH THE YEARS. 3. WE HAVE HEARD BOTH THE SIDES CONSIDERED THE MATERIAL ON RECORD AS WELL AS CONSOLIDATED ORDER PASSED IN APPEALS OF THE DEPARTMENT AND CASE LAW CITED BY THE ASSESSEE AND FIND THAT WHILE DISPOSING OF TH E APPEALS OF THE DEPART MENT A DIRECTION HAS BEEN GIVEN TO THE LD. CIT(A) TO RE-DECIDE THE ISSUE STRICTLY IN ACCORDANCE WITH THE EARLIER DIRECTION GIVEN TO THE LD. CIT( A) IN FIRST ROUND BY THE TRI BUNAL AND WE DO NOT FIND ANY MISTAKE IN THE ORDER OF THE TRIBUNAL AND IN CASE THE PET ITIONS OF THE ASSESSEE ARE ACCEPTED TO RECALL THE ORDER OF THE TRIBU NAL TO FURTHER DISMISS THE APPEALS OF THE REVENUE IT WOULD AMOUNT TO REVIEW OF THE ORDER AS RIGHT LY POINTED OUT BY THE LD. DR THE SAME IS NOT PERMISSIBLE WITHIN THE PUR VIEW OF SECTION 254( 2) AND SUPPORT CAN BE TAKEN FROM THE DECISION OF T HE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS GOKUL CHAND AGARWAL (202 ITR 14) WHICH HAS DEALT WITH THE SIMILAR POINT AND OPINED AS UNDER: MP NOS.319 & 320/MDS/09 3 SECTION 254(2) OF THE INCOME TAX AC T 1961 EMPOWERS THE TRIBUNAL TO AMEND ITS ORDER PASSED UNDER SECTI ON 254(1) TO RECTIFY ANY MISTAKE APPARENT FROM THE RECORD EITHER S UO MOTO OR ON AN APPLICATION. THE JURISDICTION OF THE TRIBUNAL TO AMEND ITS ORDER THUS DEPENDS ON WHETHER OR NOT THERE IS A MISTAKE APPARENT FROM THE RECORD. IF IN ITS ORDER THERE IS NO MISTAKE WHICH IS PATENT AND OBVIOUS ON THE BASIS OF THE RECORD THE EXERCISE OF THE JURISDICTION BY TH E TRIBUNAL UNDER SECTION 2 54(2) WILL BE ILLEGAL AND IMPROPER. AN OVERSIGHT OF A FACT CANNOT CONSTITUTE AN APPARENT MISTAKE RECTIFIABLE UNDER SECTION 254( 2). THIS MIGHT AT THE WO RST LEAD TO PERVERSITY OF THE ORDER FOR WHICH THE REMEDY AV AILABLE TO THE ASSESSEE IS NOT UNDER SECTION 254(2) BUT A REFERENCE PROC EEDING UNDER SECTION 256. THE NORMAL RULE IS THAT THE REMEDY BY WAY OF R EVIEW IS A CREATURE OF THE STATUTE AND UNLESS CLOTHED WITH SUCH POWER BY THE STATUTE NO AUTHORITY CAN EXERCISE THE POWER. REVIEW PROCEEDINGS IMPLY PROC EEDINGS WHERE A PARTY AS OF RIGHT CAN APPLY FOR RECONSIDERA TION OF THE MATTER ALREADY DECIDED UPON AFTER A FRESH HEARING ON THE MER ITS O THE CONTROVERSY BE TWEEN THE PARTIES. SUCH REMEDY IS CERTAINLY NOT PR OVIDED BY THE INCOME TAX ACT 1961 IN RESPECT OF PROCEEDINGS BEFORE THE TRIBUNAL. 3.1 IN SIMILAR SITUATION WHILE DEALING WITH THE RECTIFIC ATION THE HON'BLE ANDHRA PRADESH HIGH COURT IN THE CASE OF CIT AND ANOR VS. I.T.A.T AND ANOR (206 ITR 126 HAS HELD AS UNDER: THE APPELLATE TRIBUNAL BEING A CREATU RE OF THE STATUTE HAS TO CONFINE ITSELF IN THE EXERCISE OF ITS JURISDICTI ON TO THE ENABLING OR EMPOWERING TERMS OF THE STATUTE. IT HAS NO INHERENT POWER. EVEN OTHERWISE IN CASES WHERE SPECIFIC PROVISION DELINEAT ES THE POWERS OF THE COURT OR TRIBUNAL IT CANNOT DRAW UPON ITS ASSUMED INHERENT JURISD ICTION AND PASS ORDERS AS IT PLEASES. THE POWER OF RECTIFICATION WHICH IS SPECIFICALLY CONFERRED ON THE TRIBUNAL HAS TO BE EXERCISED IN TERMS OF THAT PR OVISION. IT CANNOT BE ENLARGED ON ANY ASSUMPTION THAT THE TRIBUNAL HAS GOT AN INHERENT POWER OF RECTIFICATION OR REVIEW OR REVISION. IT IS AXIOMATIC THAT SUCH POWER OF REVIEW OR REVISION HAS TO BE SPECIFICALLY CONFERRED IT CANNOT BE INFERRED. UNLESS THERE IS A MISTAKE APPARENT FROM THE RECORD IN THE SENSE OF PATENT OBVIOUS AND CLEAR ERROR OR MISTAKE THE TRIBUNAL CANNOT RECALL ITS PREVIOUS ORDER. IF THE ERROR OR MISTAKE IS ONE WHICH COUL D BE ESTABLISHED ONLY BY LONG DRAW N ARGUMENTS OR BY A PROCESS OF INVESTIGATION AND RE SEARCH IT IS NOT A MISTAKE APPARENT FROM THE RECORD. 3.2 FURTHER THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS KARAM CHAND THAPAR AND BR.P.LTD. (176 ITR 535) HAS HELD AS UNDER: MP NOS.319 & 320/MDS/09 4 APPELLATE TRIBUNAL DUTY TO CONSIDER CUMULATIVE EFFECT OF CIRCUMSTANCES AND TOTALITY OF FACTS NO NEED TO STATE SO IN APPELLATE ORDER SPECIFICALLY INCOME TAX ACT 1961 SEC. 254 FURTHER IT WAS HELD AS UNDER: IT IS EQUALLY WELL SETTLED THAT THE DE CISION OF THE TRIBUN AL HAS NOT TO BE SCRUTINIZED SENTENCE BY SENTENCE MERE LY TO FIND OUT WHETHER ALL FACTS HAVE BEEN SET OUT IN DETAIL BY THE TRIBUNAL OR WHETHER SOME INCIDENTAL FACT WHICH APPEARS ON THE RECORD HAS NOT BEEN NOTI CED BY THE TRIBUNAL IN ITS JUDGMENT. IF THE COURT ON A FAIR RE ADING OF THE JUDGMENT OF THE TRIBUNAL FINDS THAT IT HAS TAKEN INTO ACCOUNT ALL RELEVANT MA TERIAL AND HAS NOT TAKEN INTO ACCOUNT ANY IRRELEVANT MATERIAL IN BASING ITS CONCLUSIONS THE DECISION OF THE TRIBUNAL IS NOT LIABLE TO BE INTERF ERED WITH UNLESS OF COURSE THE CONCLUSIONS ARRIVED AT BY THE TRIBUNAL ARE PERVERSE. IT IS NOT NECESSARY FOR THE TRIBUNAL TO STATE IN ITS JUDGEMEN T SPECIFICALLY OR IN EXPRESS WORDS THAT IT HAS TAKEN INTO ACCOUNT THE CUMULATIVE EFFECT OF THE CIRCUMSTANCES OR HAS CONSIDERED THE TOTA LITY OF THE FACTS AS IF THAT WERE A MAGIC FORMULA; IF THE JUDGME NT OF THE TRIBUNAL SHOW S THAT IT HAS IN FACT DONE SO THERE IS NO REASON TO INTERFER E WITH THE DECISION OF THE TRIBUNAL. SIMILARLY THE BOMBAY HIGH COURT IN TH E CASE OF CIT-VS- RAMESH ELECTRIC AND TRADING CO. (203 ITR 497) .IT IS AN ACCEPTED POSITION THAT THE APPELLATE TRIBUNAL DOES NOT HAVE ANY POWER TO REVIEW ITS OWN ORDERS UNDER THE PROVISIONS OF THE ACT. THE ONLY POWER WHICH THE TRIBUNAL POSSESSES IS TO RE CTIFY ANY MISTAKE IN ITS OWN ORDER WHICH IS APPARENT FROM THE RECORD.. THE POWER OF RECTIFICATION UNDER SECTION 254(2) CAN BE EXERCISED ONLY WHEN THE MISTAKE WHICH IS SOUGHT TO BE RECTIFIED S AN OBVIOUS AND PATENT MISTAKE WHICH IS APPARENT FROM THE RECO RD AND NOT A MISTAKE WH ICH REQUIRED TO BE ESTABLISHED BY ARGUMENTS AND A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY CONCEIVABLY BE TWO OP INION. FAILURE OF THE TRIBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY EITH ER PARTY FOR ARRIVING AT A CONCLUSION IS NOT AN ERROR APPARE NT ON THE RECORD ALTHOU GH IT MAY BE AN ERROR OF JUDGMENTS 3.3 WE ALSO DRAW SUPPORT HERE FROM HONBLE MADRAS HIGH COURT DECISION IN T.C.(A) NO. 156 OF 2006 DATED 21.08.2007 IN THE CASE OF CIT VS. TAMIL NADU SMALL INDUSTRIES DEVELOPMENT CORPORATION LTD. WHEREIN THE HONBLE HIGH COURT HELD AS UNDER:- MP NOS.319 & 320/MDS/09 5 THE TRIBUNAL HAS NO POWER TO REVIEW ITS ORDE R. WHEN THE TRIBUNAL HAS ALREADY DECIDED AN ISSUE BY APPLYI NG ITS MIND AGAINST THE ASSESSEE THE SAME CANNOT BE RECTIFIED UNDER SECTI ON 254 (2) OF THE ACT. THERE WAS NO NECESSITY WHATSOEVER ON THE PART OF THE TRIBUNAL TO REVIEW ITS OWN ORDER. EVEN AFTER THE EXAMINATION OF THE JUDGMENTS OF THE TRIBUNAL WE COULD NOT FIND A SINGLE REASON IN THE WHOLE ORDER AS TO HOW THE TRIBUNAL IS JUSTIFIED AND FOR WHAT REASONS. THERE IS NO AP PARENT ERROR ON THE FACE OF THE RECORD AND THEREBY THE TRIBUNAL SAT AS AN APPELLATE AUTHORITY OVER ITS OWN ORDER. IT IS COMPLETELY IMPERMISSIBLE AND TH E TRIBUNAL HAS TRAVELED OUT OF ITS JURISDICTION TO ALLOW A MISCELLANEOUS PETITION IN THE NAME OF REVIEWING ITS OWN ORDER. IN THE PRESENT CASE IN TH E GUISE OF RECTIFICATION THE TRIBUNAL REVIEWED ITS EARLIER ORDER AND ALLOWED THE MIS CELLANEOUS PETITION WHICH IS NOT IN ACCORDANCE WITH LAW. SECTION 254(2) OF THE ACT DOES NOT CONTEMPLATE REHEARING OF THE APPEAL FOR A FRESH DI SPOSAL AND DOING SO WOULD OBLITERATE THE DISTINCTION BETWEEN TH E POWER TO RECTIFY MISTA KES AND POWER TO REVIEW THE ORDER MADE BY THE TRIBUNAL. THE SCOPE AND AMBIT OF THE APPLICATION OF SECTION 254(2) IS LIMITED AND NARROW. IT IS RESTRICTED TO RECTIFICATION OF MISTAKES APPARENT FROM THE RECORD. RECALLING THE ORDER OBVIOUSLY WOULD MEAN PASSING OF A FRESH OR DER. RECALLING OF THE OR DER IS NOT PERMISSIBLE UNDER SECTION 254(2) OF THE ACT. ON LY GLARING AND ANY MISTAKE APPARENT ON THE FACE OF THE RECORD AL ONE CAN BE RECTIFIED AND HENCE ANYTHING DEBATABLE CANNOT BE A SUBJECT MATTER OF RECTIFICATION. 3.4 FURTHER WE PLACE RELIANCE UPON HONBL E DELHI HIGH COURT EXPOSITION ON THE SCOPE OF RECTIFICATION U/S 254(2) AS REPORT ED IN THE CASE OF RA S BIHARI BANSAL VS. COMMISSIONER OF INCOME TAX (2007) 293 ITR 365:- SECTION 254 OF THE INCOME TAX ACT 1961 ENABLES THE CONCERNED AUTHORITY TO RECTIFY ANY MISTAKE APPARENT FROM TH E RECORD. IT IS WELL SETTLED THAT AN OVERSIGHT OF A FACT CANNOT CONSTITUTE AN APPARENT MISTAKE RECTIFIABLE UNDER THIS SECTION. SIMILARLY FAILURE OF TH E TRIBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR ARRIVI NG AT A CONCLUSION IS NOT AN ERROR APPARENT ON THE RE CORD ALTHOUGH IT MAY BE AN ERROR OF JUDGMENT. THE MERE FACT THAT THE TRIBUNAL HA D NOT ALLOWED A DEDUCTION EVEN IF THE CONCLUSION IS WRONG WILL BE NO GROUND FOR MOVING AN APPLICATION UNDER S ECTION 254(2) OF THE ACT. FURTHER IN THE GARB OF AN APP LICATION FOR RECTIFICATION THE ASSESSEE CANNOT BE PERMITTED TO REOPEN AND RE-A RGUE THE WHOLE MATTER WHICH IS BEYOND THE SCOPE OF THE SECTION. MP NOS.319 & 320/MDS/09 6 4. THEREFORE IN VIEW OF T HE FACTS CIRCUMSTANCES IN THE LIGHT OF RATIO OF DECISIONS CITED AND DISCUSSION AS HELD AB OVE WE DO NOT FIND ANY SUBST ANCE IN THE PETITIONS OF THE ASSESSEE FOR BOTH THE YEARS AND DISMISS THE SAME BEING DEVOID OF ANY MERITS. 5. IN THE RESULT BOTH T HE MISCELLANEOUS PETITIONS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON 11.02.2011. SD/- SD/- (ABRAHAM P. GEORGE) ACCOUNTANT MEMBER (U.B.S. BEDI) JUDICIAL MEMBER CHENNAI DATED THE 11.02.2011 VM/- TO:THE ASSESSEE//A.O./CIT(A)/CIT/D.R.