M/s Ardee Business Services Pvt. Ltd., Visakhapatnam v. The Addl. CIT, Range-3, Visakhapatnam

MA 85/VIZ/2010 | 2006-2007
Pronouncement Date: 10-12-2010 | Result: Allowed

Appeal Details

RSA Number 8525324 RSA 2010
Assessee PAN AABCA4800A
Bench Visakhapatnam
Appeal Number MA 85/VIZ/2010
Duration Of Justice 4 month(s) 20 day(s)
Appellant M/s Ardee Business Services Pvt. Ltd., Visakhapatnam
Respondent The Addl. CIT, Range-3, Visakhapatnam
Appeal Type Miscellaneous Application
Pronouncement Date 10-12-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 10-12-2010
Date Of Final Hearing 01-10-2010
Next Hearing Date 01-10-2010
Assessment Year 2006-2007
Appeal Filed On 21-07-2010
Judgment Text
MA NO.85 OF 2010 ARDEE BUSINESS SERVICES (P) LTD VI SAKHAPATNAM PAGE 1 OF 10 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER MA NO.85/VIZAG/2010 (ARISING OUT OF ITA NO.321/VIZAG/2009) ASSESSMENT YEAR: 2006-07 ARDEE BUSINESS SERVICES PVT LTD. VISAKHAPATNAM VS. ADD. CIT RANGE-3 VISAKHAPATNAM (APPELLANT) PAN NO.AABCA 4800 A (RESPONDENT) APPELLANT BY: SHRI G.V.N. HARI CA RESPONDENT BY: SHRI T.L. PETER DR ORDER PER SHRI B. R. BASKARAN ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THIS MISCELLANEOUS PETI TION WITH THE SUBMISSION THAT THERE ARE MISTAKES APPARENT FROM RECORD IN THE ORDER DATED 13-5-2010 PASSED BY THIS BENCH IN RESPECT OF THE APPEAL FILED BY THE REVENUE REFERRED (SUPRA). THE SAID ORDER WAS A CONSOLIDATED ORDER P ASSED TO DISPOSE OF THE APPEALS FILED BY THE ASSESSEE AS WELL AS THE REVENU E. THE PRESENT PETITION IS DIRECTED AGAINST THE ORDER PASSED IN RESPECT OF THE APPEAL FILED BY THE REVENUE. IN THE SAID APPEAL THE ISSUE URGED BY THE REVENUE WAS RELATED TO THE DEDUCTION OF EXPENDITURE INCURRED ON SCIENTIFIC RESEARCH UNDER SECTION 35(2AB) OF THE ACT. 2. THE LD. A.R SUBMITTED THAT THE ASSESSEE HAD OBTAINED APPROVAL IN RESPECT OF THE RESEARCH ACTIVITY AND ALSO THE EXPEN DITURE INCURRED AT VISAKHAPATNAM AND ROURKELA. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE APPROVAL OF THE PRESCRIBED AUTHORITY IS ALSO RE QUIRED FOR ALL THE PLACES WHERE THE RESEARCH ACTIVITY WAS CARRIED ON WHICH A CCORDING TO THE ASSESSEE WAS NOT CORRECT. ACCORDINGLY THE ASSESSI NG OFFICER HAD DISALLOWED THE CLAIM FOR EXPENDITURE INCURRED AT RO URKELA SINCE THE SAID MA NO.85 OF 2010 ARDEE BUSINESS SERVICES (P) LTD VI SAKHAPATNAM PAGE 2 OF 10 PLACE DID NOT FIND PLACE IN THE FORM FURNISHED BY T HE PRESCRIBED AUTHORITY. THE TRIBUNAL IN THE IMPUGNED ORDER HAS SPELT OUT THE LAW ON THE IMPUGNED ISSUE IN PARA 6 OF THE ORDER BY STATING TH AT THE SINE QUA NON FOR THE DEDUCTION U/S 35(2AB) IS THE APPROVAL FROM THE PRESCRIBED AUTHORITY VIZ. DSIR (DEPARTMENT OF SCIENCE AND INDUSTRIAL RE SEARCH). THE TRIBUNAL FURTHER OBSERVED IN PARA 7 OF THE ORDER THAT THE RE QUIREMENT OF LAW IS THAT THE EXPENDITURE INCURRED FOR THE IN HOUSE RESEARCH AND DEVELOPMENT FACILITY SHOULD BE APPROVED BY THE PRESCRIBED AUTHORITY. HO WEVER WHILE REACHING THE DECISION THE TRIBUNAL CONFIRMED THE ACTION OF THE ASSESSING OFFICER BY OBSERVING THAT THE ASSESSEE COULD NOT PRODUCE THE A PPROVAL FOR ROURKELA UNIT AND HENCE THE EXPENDITURE INCURRED IN ROURKELA IS NOT ALLOWABLE. THUS THE TRIBUNAL HAS ACCEPTED THE VIEW OF THE ASSESSING OFFICER THAT THE APPROVAL OF THE PRESCRIBED AUTHORITY MENTIONED IN S ECTION 35(2AB) IS PLACE SPECIFIC WHICH IS CONTRARY TO THE LEGAL POSITION ALREADY SPELT OUT BY IT IN PARA 6 AND 7 OF THE ORDER WHICH IS A MISTAKE APPAR ENT FROM THE RECORD. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS FURNISHED T HE COPY OF FORM NO.3CL WHICH IS SENT BY THE PRESCRIBED AUTHORITY T O THE DIRECTOR GENERAL (INCOME TAX EXEMPTIONS) TO THE TAX AUTHORITIES. THE TRIBUNAL HAS ALSO MADE A REFERENCE TO THE SAID FORM AND HAS EXTRACTED THE DETAILS GIVEN IN POINT NOS.5 TO 7 FROM THE SAID FORM. HOWEVER THE T RIBUNAL OVERLOOKED THE DETAILS GIVEN IN POINT NO.9 AND IN THAT POINT ONLY THE PRESCRIBED AUTHORITY HAS FURNISHED THE DETAILS OF EXPENDITURE THAT WERE APPROVED BY HIM. THE AMOUNT OF EXPENDITURE SO APPROVED BY THE PRESCRIBED AUTHORITY IN POINT NO.9 (SUPRA) WAS THE EXACT AMOUNT THAT WAS CLAIMED BY THE ASSESSEE. THE LEARNED A.R SUBMITTED THAT THE DETAILS GIVEN IN THE SAID POINT NO.9 ARE VITAL INFORMATION AND ACCORDINGLY CONTENDED THAT TH E NON CONSIDERATION OF THE SAID INFORMATION WHICH WAS VERY MUCH AVAILABLE ON RECORD WHILE DECIDING THE ISSUE BEFORE THE TRIBUNAL GIVE RISE TO A MISTAKE APPARENT FROM RECORD AS IT GOES TO THE ROOT OF THE ISSUE. HE FUR THER SUBMITTED THAT NO WHERE IN SECTION 35(2AB) IT IS STATED THAT THE APP ROVAL GIVEN BY THE PRESCRIBED AUTHORITY IS PLACE SPECIFIC. HE FURTHER SUBMITTED THAT THE PRESCRIBED AUTHORITY HAS MENTIONED THE ADDRESS OF T HE CORPORATE OFFICE MA NO.85 OF 2010 ARDEE BUSINESS SERVICES (P) LTD VI SAKHAPATNAM PAGE 3 OF 10 LOCATED IN VISAKHAPATNAM FOR THE REASON THAT THE RE SEARCH ACTIVITY INVOLVES PROCESSING OF DATA WHICH IS CARRIED OUT AT VISAKHA PATNAM AND THE FINAL DECISION ON RESEARCH FINDINGS ARE ALSO TAKEN AT VIS AKHAPATNAM. HE FURTHER SUBMITTED THAT THE TRIBUNAL HAS OMITTED TO TAKE INT O ACCOUNT THE LEGAL POSITION THAT THE ASSESSING OFFICER IS NOT ENTITLED UNDER THE LAW TO DENY THE DEDUCTION OF EXPENDITURE THAT WAS APPROVED BY THE P RESCRIBED AUTHORITY. IN SUPPORT OF THIS CONTENTION THE LEARNED A.R RELIE D UPON THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF INDIAN PLAN ETARY SOCIETY VS. CBDT (2009) (318 ITR 102). ACCORDINGLY HE SUBMITT ED THAT THE IMPUGNED ORDER PASSED BY THE TRIBUNAL SUFFERS FROM MISTAKES POINTED OUT BY HIM WHICH ARE APPARENT FROM RECORD AND ACCORDINGLY PRAY ED THAT THE ORDER MAY BE RECTIFIED SUITABLY. 3. HOWEVER THE LD DR OPPOSED THE PETITION FILE D BY THE ASSESSEE BY STATING THAT THERE IS NO MISTAKE APPARENT FROM RECO RD IN THE DECISION OF THE TRIBUNAL. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE APPROVAL IS REQUIRED BOTH FOR THE EXPENDITURE AND P LACE FOR CLAIMING DEDUCTION U/S 35(2AB) SINCE THE APPROVAL OF DEVELO PMENT FACILITY INCLUDES THE PLACE OF RESEARCH ALSO. HE FURTHER STATED THAT THE ERRORS POINTED OUT BY THE ASSESSEE ARE DEBATABLE ONES AND ACCORDINGLY CON TENDED THAT NO RECTIFICATION CAN BE MADE ON DEBATABLE ISSUES. 4. WE HAVE HEARD BOTH THE PARTIES AND GONE THRO UGH THE ORDER OF THE TRIBUNAL. TO RECAPITULATE THE FACTS BRIEFLY WE M AY STATE THAT THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 35(2AB) OF THE ACT IN RESPECT OF THE EXPENDITURE INCURRED ON SCIENTIFIC RESEARCH. THE A SSESSEE HAD INCURRED THE SAID EXPENDITURE AT VISAKHAPATNAM AND ROURKELA. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION OF EXPENSES INCURRED AT ROURKELA BY OBSERVING THAT THE APPROVAL WAS GIVEN B Y THE PRESCRIBED AUTHORITY ONLY FOR THE VISAKHAPATNAM OFFICE I.E. T HE ASSESSEE DID NOT OBTAIN APPROVAL FOR THE ROURKELA OFFICE. THUS HE WAS OF T HE VIEW THAT THE APPROVAL OF THE PRESCRIBED AUTHORITY IS REQUIRED FO R THE PLACE WHERE THE MA NO.85 OF 2010 ARDEE BUSINESS SERVICES (P) LTD VI SAKHAPATNAM PAGE 4 OF 10 RESEARCH ACTIVITY IS CARRIED ON. HOWEVER THE LEAR NED CIT(A) DELETED THE SAID ADDITION BY ACCEPTING THE VIEWS OF THE ASSESSE E. IN THE APPEAL PREFERRED BY THE REVENUE THE TRIBUNAL SET ASIDE TH E ORDER OF LEARNED CIT(A) AND RESTORED THE ADDITION MADE BY THE ASSESS ING OFFICER. HENCE THE ASSESSEE HAS MOVED THIS PETITION SEEKING RECTIFICAT ION. 5. BEFORE PROCEEDING TO THE MERITS OF THE PETIT ION FILED BY THE ASSESSEE WE FEEL IT PERTINENT TO DISCUSS THE JUDICIAL VIEWS ON THE TERM THE MISTAKE APPARENT FROM RECORD AS UNDER SECTION 254(2) OF TH E ACT THE TRIBUNAL IS EMPOWERED TO AMEND THE ORDER PASSED UNDER SECTION 2 54(1) ONLY TO RECTIFY THE MISTAKES APPARENT FROM THE RECORD. THE HON'B LE SUPREME COURT IN THE CASE OF ASST. CIT VS. SAURASHTRA KUTCH STOCK EX CHANGE LTD. (2008) (305 ITR 227) HAS AGAINST POSED ITSELF THE QUESTION WHAT IS A MISTAKE APPARENT FROM THE RECORD? AND ANALYSED THE EARLIER DECISIONS OF THE APEX COURT IN THAT REGARD. THE RELEVANT OBSERVATIONS MAD E IN THE ABOVE CITED CASE ARE EXTRACTED BELOW: THE MAIN QUESTION THEREFORE IS: WHAT IS A MIST AKE APPARENT FROM THE RECORD? NOW A SIMILAR EXPRESSIO N ERROR APPARENT ON THE FACE OF THE RECORD CAME UP FOR CON SIDERATION BEFORE THE COURTS WHILE EXERCISING CERTIORARI JURIS DICTION UNDER ARTICLES 32 AND 226 OF THE CONSTITUTION. IN T. S. B ALARAM ITO V. VOLKART BROTHERS [1971] 2 SCC 526 * THIS COURT H ELD THAT ANY MISTAKE APPARENT FROM THE RECORD IS UNDOUBTED LY NOT MORE THAN THAT OF THE HIGH COURT TO ENTERTAIN A WRI T PETITION ON THE BASIS OF AN ERROR APPARENT ON THE FACE OF THE RECORD. IT WAS HOWEVER CONCEDED IN ALL LEADING CASES THAT IT IS VERY DIFFICULT TO DEFINE AN ERROR APPARENT ON THE FACE OF THE RECORD PRECISELY SCIENTIFICALLY AND WITH CERT AINTY. (*(82 ITR 50)) IN THE LEADING CASE OF HARI VISHNU KAMATH V. SYED AHMAD ISHAQUE [1955] 1 SCR 1104 THE CONSTITUTION BENCH OF THIS COURT QUOTED THE OBSERVATIONS OF CHAGLA C. J. IN BA TUK K. VYAS V. SURAT BOROUGH MUNICIPALITY ILR 1953 BOM 191 ; AI R 1953 BOM 133 THAT NO ERROR CAN BE SAID TO BE APPARENT O N THE FACE OF THE RECORD IF IT IS NOT MANIFEST OR SELF-EVIDENT AND REQUIRES AN EXAMINATION OR ARGUMENT TO ESTABLISH IT. THE COU RT ADMITTED THAT THOUGH THE SAID TEST MIGHT APPLY IN A MAJORITY OF CASES SATISFACTORILY IT PROCEEDED TO COMMENT THAT THERE MIGHT BE MA NO.85 OF 2010 ARDEE BUSINESS SERVICES (P) LTD VI SAKHAPATNAM PAGE 5 OF 10 CASES IN WHICH IT MIGHT NOT WORK INASMUCH AS AN ERROR OF LAW MIGHT BE CONSIDERED BY ONE JUDGE AS APPARENT PATEN T AND SELF-EVIDENT BUT MIGHT NOT BE SO CONSIDERED BY ANOTHER JUDGE. THE COURT THEREFORE CONCLUDED THAT AN ERROR APPARENT ON THE FACE OF THE RECORD CANNOT BE DEFINE D EXHAUSTIVELY THERE BEING AN ELEMENT OF INDEFINITENESS INHERENT IN ITS VERY NATURE AND MUST BE LEFT TO BE DETERMINED JUDICIALLY ON THE FACTS OF EACH CASE. THE COURT STATED : IT MAY THEREFORE BE TAKEN AS SETTLED THAT A WRIT CERTIORARI COULD BE ISSUED TO CORRECT AN ERROR OF LAW. BUT IT IS ESSENTIAL THAT IT SHOULD BE SOMETHING MORE THAN A MERE ERROR; IT MUST BE ONE WHICH MUST BE MANIFEST ON THE FACE OF THE RECORD . THE REAL DIFFICULTY WITH REFERENCE TO THIS MATTER HOWEVER IS NOT SO MUCH IN THE STATEMENT OF THE PRINCIPLE AS IN ITS APPLICATION TO THE FACTS OF A PARTICULAR CASE . WHEN DOES AN ERROR CEASE TO BE MERE ERROR AND BECOME AN ERRO R APPARENT ON THE FACE OF THE RECORD? LEARNED COUNSEL ON EITHER SIDE WERE UNABLE TO SUGGEST ANY CLEAR-CUT RULE BY WHICH THE BOUNDARY BETWEEN THE TWO CLASSES OF ERRORS COULD BE DEMARCATED. (EMPHASIS SUPPLIED) IN SATYANARAYAN LAXMINARAYAN HEGDE V. MALLIKARJUN BHAVANAPPA TIRU-MALE [1960] 1 SCR 890 THIS COURT R EFERRING TO BATUK K. VYAS* AND HARI VISHNU KAMATH** STATED A S TO WHAT CANNOT BE SAID TO BE AN ERROR APPARENT ON THE FACE OF THE RECORD. (*(1953) ILR 1953 BOM 191; AIR 1953 BOM 133.) (** (1955) 1 SCR 1104) THE COURT OBSERVED : AN ERROR WHICH HAS TO BE ESTABLISHED BY A LONG DRAWN PROCESS OF REASONING ON POINTS WHERE THERE MAY CONCEIVABLY BE TWO OPINIONS CAN HARDLY BE SAID TO BE AN ERROR APPARENT ON THE FACE OF THE RECORD. AS THE ABOVE DISCUSSION OF THE RIVAL CONTENTIONS SHOW THE ALLEGED ERROR IN THE PRESENT CASE IS FAR FROM SELF EVIDENT AND IF IT CAN BE ESTABLISHED IT HAS TO BE ESTABLISHED BY LENGTHY AND COMPLICATED ARGUMENTS. WE DO NOT THINK SUCH AN ERROR CAN BE CURED BY A WRIT OF CERTIORARI ACCORDING TO THE RULE GOVERNING THE POWERS OF THE SUPERIOR COURT TO ISSUE SUCH A WRIT. MA NO.85 OF 2010 ARDEE BUSINESS SERVICES (P) LTD VI SAKHAPATNAM PAGE 6 OF 10 THE HON'BLE SUPREME COURT ALSO EXTRACTED THE FOLLOW ING CONCLUSION REACHED IN THE CASE OF SYED YAKOOB V K.S.RADHAKRISHNAN (196 4) 5 SCR 64: IT IS OF COURSE NOT EASY TO DEFINE OR ADEQUATEL Y DESCRIBE WHAT AN ERROR OF LAW APPARENT ON THE FACE OF THE RE CORD MEANS. WHAT CAN BE CORRECTED BY A WRIT HAS TO BE AN ERROR OF LAW; BUT IT MUST BE SUCH AN ERROR OF LAW A S CAN BE REGARDED AS ONE WHICH IS APPARENT ON THE FACE OF THE RECORD . WHERE IT IS MANIFEST OR CLEAR THAT THE CONCLUSION OF LAW RECORDED BY AN INFERIOR COURT OR TRIBUNAL IS BASED ON AN OBVIOUS MISINTERPRETATION OF THE RELEVANT STATUTORY PROVISION OR SOMETIMES IN IGNORANCE OF IT OR MAY BE EVEN IN DISREGARD OF IT OR IS EXPRESSLY FOUNDED ON REASONS WHICH ARE WRONG IN LAW THE SAID CONCLUSION CAN BE CORRECTED BY A WRIT OF CERTIORARI. IN ALL THESE CASES THE IMPUGNED CONCLU SION SHOULD BE SO PLAINLY INCONSISTENT WITH THE RELEVANT STATUT ORY PROVISION THAT NO DIFFICULTY IS EXPERIENCED BY THE HIGH COURT IN HOLDING THAT THE SAID ERROR OF LAW IS APPARENT ON THE FACE OF THE RECORD. IT MAY ALSO BE THAT IN SOME CASES THE IMPU GNED ERROR OF LAW MAY NOT BE OBVIOUS OR PATENT ON THE FACE OF THE RECORD AS SUCH AND THE COURT MAY NEED AN ARGUMENT TO DISCO VER THE SAID ERROR; BUT THERE CAN BE NO DOUBT THAT WHAT CAN BE CORRECTED BY A WRIT OF CERTIORARI IS AN ERROR OF LA W AND THE SAID ERROR MUST ON THE WHOLE BE OF SUCH A CHARACTER AS WOULD SATISFY THE TEST THAT IT IS AN ERROR OF LAW APPAREN T ON THE FACE OF THE RECORD. IF A STATUTORY PROVISION IS REASONABL Y CAPABLE OF TWO CONSTRUCTIONS AND ONE CONSTRUCTION HAS BEEN ADO PTED BY THE INFERIOR COURT OR TRIBUNAL ITS CONCLUSION MAY NOT NECESSARILY OR ALWAYS BE OPEN TO CORRECTION BY A WR IT OF CERTIORARI. IN OUR OPINION IT IS NEITHER POSSIBLE NOR DESIRABL E TO ATTEMPT EITHER TO DEFINE OR TO DESCRIBE ADEQUATELY ALL CASES OF ERRORS WHICH CAN BE APPROPRIATELY DESCRIBED AS ERRO RS OF LAW APPARENT ON THE FACE OF THE RECORD. WHETHER OR NOT AN IMPUGNED ERROR IS AN ERROR OF LAW AND AN ERROR OF L AW WHICH IS APPARENT ON THE FACE OF THE RECORD MUST ALWAYS DEP END UPON THE FACTS AND CIRCUMSTANCES OF EACH CASE AND UPON T HE NATURE AND SCOPE OF THE LEGAL PROVISION WHICH IS ALLEGED TO HAVE BEEN MISCONSTRUED OR CONTRAVENED . (EMPHASIS SUPPLIED) THE HON'BLE SUPREME COURT HAS SUMMARIZED THE POSITI ON OF LAW IN THE FOLLOWING LINES IN SAURASHTRA KUTCH STOCK EXCHANGE LTD. (SUPRA) AS UNDER: IN OUR JUDGMENT THEREFORE A PATENT MANIF EST AND SELF- EVIDENT ERROR WHICH DOES NOT REQUIRE ELABORATE DISC USSION OF EVIDENCE OR ARGUMENT TO ESTABLISH IT CAN BE SAID T O BE AN ERROR APPARENT ON THE FACE OF THE RECORD AND CAN BE CORRE CTED WHILE MA NO.85 OF 2010 ARDEE BUSINESS SERVICES (P) LTD VI SAKHAPATNAM PAGE 7 OF 10 EXERCISING CERTIORARI JURISDICTION. AN ERROR CANNOT BE SAID TO BE APPARENT ON THE FACE OF THE RECORD IF ONE HAS TO TR AVEL BEYOND THE RECORD TO SEE WHETHER THE JUDGMENT IS CORRECT O R NOT. AN ERROR APPARENT ON THE FACE OF THE RECORD MEANS AN E RROR WHICH STRIKES ON MERE LOOKING AND DOES NOT NEED A LONG DR AWN OUT PROCESS OF REASONING ON POINTS WHERE THERE MAY CONC EIVABLY BE TWO OPINIONS. SUCH ERROR SHOULD NOT REQUIRE ANY EXTRANEOUS MATTER TO SHOW ITS INCORRECTNESS. TO PUT IT DIFFERE NTLY IT SHOULD BE SO MANIFEST AND CLEAR THAT NO COURT WOULD PERMIT IT TO REMAIN ON RECORD. IF THE VIEW ACCEPTED BY THE COURT IN THE ORIGINAL JUDGMENT IS ONE OF POSSIBLE VIEWS THE CAS E CANNOT BE SAID TO BE COVERED BY AN ERROR APPARENT ON THE FACE OF THE RECORD. 6. THE HON'BLE KERALA HIGH COURT IN THE CASE OF K ERALA CHEMICALS AND PROTEINS (1999) (235 ITR 467) HAS OBSERVED THAT IT IS THE DUTY OF THE TRIBUNAL TO CONSIDER ALL THE PROVISIONS OF ACT AS I T EXISTED EVEN THOUGH THE ASSESSEE HAS FAILED TO BRING THEM TO ITS NOTICE. T HE KERALA HIGH COURT IN THAT CASE RELIED UPON THE DECISION OF HON'BLE SUPR EME COURT IN THE CASE OF CIT V MAHALAXMI SUGAR MILLS CO. LTD. (1986) (160 IT R 920). IN THAT CASE THE ASSESSEE FILED A MISCELLANEOUS PETITION BEFORE THE TRIBUNAL BY POINTING OUT THAT THE TRIBUNAL HAS OMITTED TO CONSIDER A PAR TICULAR PROVISION OF THE ACT WHILE DISPOSING THE ISSUE AGITATED BEFORE US. THE SAID PETITION WAS REJECTED BY THE TRIBUNAL ON THE GROUND THAT THE ASS ESSEE HAD FAILED TO MAKE A REFERENCE TO THAT PARTICULAR PROVISION OF TH E ACT AT THE TIME OF HEARING OF THE APPEAL. HENCE THE ISSUE BEFORE THE HON'BLE KERALA HIGH COURT WAS WITH REGARD TO THE VALIDITY OF REJECTION OF THE MISCELLANEOUS PETITION BY THE TRIBUNAL. BEFORE THE HIGH COURT T HE ASSESSEE CONTENDED THAT IT IS THE DUTY OF THE TRIBUNAL TO CONSIDER ALL THE PROVISIONS OF THE ACT AND THIS CONTENTION OF THE ASSESSEE WAS APPROVED BY THE HON'BLE KERALA HIGH COURT MEANING THEREBY THAT THE OMISSION ON TH E PART OF THE TRIBUNAL TO TAKE INTO ACCOUNT ALL THE RELEVANT PROVISIONS OF THE ACT WHILE DISPOSING THE ISSUE BEFORE IT WOULD ALSO GIVE RISE TO A MIST AKE APPARENT FROM THE RECORD. MA NO.85 OF 2010 ARDEE BUSINESS SERVICES (P) LTD VI SAKHAPATNAM PAGE 8 OF 10 7. COMING TO THE FACTS OF THE INSTANT CASE WE N OTICE THAT THE TRIBUNAL HAS OBSERVED IN THE IMPUGNED ORDER THAT THE REQUIREMENT OF LAW IS THAT THE EXPENDITURE INCURRED ON IN-HOUSE RESEARCH AND DEVEL OPMENT FACILITY SHOULD BE APPROVED BY THE PRESCRIBED AUTHORITY. HOWEVER IT UPHELD THE ORDER OF THE ASSESSING OFFICER IN DISALLOWING THE EXPENDITUR E INCURRED AT ROURKELA UNIT BY STATING THAT THE ASSESSEE COULD NOT PRODUCE ANY APPROVAL FOR THE ROURKELA UNIT. THUS APPARENTLY THERE IS A CONTRADI CTION BETWEEN THE OBSERVATIONS INITIALLY MADE IN PARA 6 & 7 OF THE OR DER AND THE DECISION FINALLY REACHED BY THE TRIBUNAL. IN ADDITION TO TH E ABOVE THE TRIBUNAL HAS SPECIFICALLY EXTRACTED THE DETAILS GIVEN IN POINT N O. 5 TO 7 OF FORM 3CL AND HAS OVERLOOKED THE DETAILS OF EXPENDITURE GIVEN IN POINT NO.9 OF FORM 3CL AND THERE IS NO DISPUTE THAT THE EXPENDITURE CLAIME D BY THE ASSESSEE IS THE SAME AMOUNT WHICH WAS APPROVED BY THE PRESCRIBED AU THORITY. THE OMISSION TO CONSIDER THE DETAILS OF EXPENDITURE APP ROVED BY THE PRESCRIBED AUTHORITY AS GIVEN IN POINT NO.9 OF FORM 3CL IS VER Y MUCH GLARING AND HENCE IT ALSO CONSTITUTES A MISTAKE APPARENT FROM R ECORD AND THE SAID OMISSION MAY HAVE A MAJOR BEARING ON THE DECISION T O BE TAKEN. FURTHER DURING THE COURSE OF HEARING OF THIS PETITION BOTH THE PARTIES HAVE EXTENSIVELY MADE REFERENCE TO VARIOUS RULES AND PRO VISIONS IN ORDER TO SUPPORT THEIR RESPECTIVE STAND AND IT IS NOTICED TH AT MANY OF THOSE PROVISIONS AND RULES NOW REFERRED TO WERE NOT BROU GHT TO THE NOTICE OF THE TRIBUNAL AT THE TIME OF HEARING OF THE APPEAL. HEN CE WHILE DISPOSING THE APPEAL THE TRIBUNAL DID NOT HAVE THE OCCASION TO C ONSIDER THOSE RELEVANT RULES PROVISIONS. ACCORDING TO THE DECISION OF HON 'BLE KERALA HIGH COURT IN THE CASE OF KERALA CHEMICALS AND PROTEINS (SUPRA) THE TRIBUNAL IS BOUND TO CONSIDER ON ITS OWN VARIOUS PROVISIONS OF THE AC T AND AS PER THE SAID DECISION OF HON'BLE KERALA HIGH COURT OMISSION ON THE PART OF THE TRIBUNAL TO DO SO ALSO RESULTS IN MISTAKE APPARENT FROM RECO RD. 8. WHILE OPPOSING THE MISCELLANEOUS PETITION OF THE ASSESSEE THE LEARNED DEPARTMENTAL REPRESENTATIVE CONTENDED THAT THE APPROVAL IS REQUIRED FROM THE PRESCRIBED AUTHORITY BOTH FOR THE PLACE AND ALSO THE MA NO.85 OF 2010 ARDEE BUSINESS SERVICES (P) LTD VI SAKHAPATNAM PAGE 9 OF 10 EXPENDITURE. WE NOTICE THAT THE PRESENT ARGUMENT O F THE LEARNED DR DEVIATES FROM THE ARGUMENT THAT WAS ADVANCED AT THE TIME OF HEARING THE APPEAL. HOWEVER IT IS TO BE NOTICED THAT THE SCOP E OF PETITION FILED UNDER SECTION 254(2) IS LIMITED TO THE EXTENT OF FINDING OUT WHETHER THERE IS ANY MISTAKE APPARENT FROM THE RECORD. HENCE WE ARE UNA BLE TO CONSIDER THE ARGUMENT CITED ABOVE. IN THE PRECEDING PARAGRAPH W E HAVE LISTED OUT THE MISTAKES WHICH ARE APPARENT FROM RECORD IN THE IMPU GNED ORDER OF THE TRIBUNAL AND THEY NEED TO BE CORRECTED AS PER THE L AW EVEN IF SUCH CORRECTION MAY OR MAY NOT HAVE A BEARING THE DECISI ON REACHED BY THE TRIBUNAL. HENCE IN OUR VIEW THE QUESTION OF DEBA TABLE NATURE OF DECISION OF THE TRIBUNAL DOES NOT ARISE HERE. 9. THE VARIOUS COURSES AVAILABLE TO THE TRIBUNAL W HILE DISPOSING THE PETITION FILED UNDER SECTION 254(2) HAS BEEN STATED BY THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. S.K.GUP TA (327 ITR 267 (ALL)). THE RELEVANT OBSERVATIONS OF THE COURT ARE EXTRACTE D BELOW: WE FIND THAT UNDER SECTION 254(2) OF THE ACT THE T RIBUNAL HAS POWER TO RECTIFY THE MISTAKES WHICH ARE APPARENT ON THE RECORD. ADMITTEDLY IN THE PRESENT CASE THE MISTAK ES HAD CREPT IN THE ORDER; THEREFORE THE TRIBUNAL COULD H AVE CORRECTED IT. IF THE MISTAKES WHICH HAVE BEEN POINT ED OUT GO TO THE ROOT OF THE MATTER IT IS THE DISCRETION OF THE TRIBUNAL TO CORRECT THE MISTAKES IN THE FACTS OF THE JUDGMENT/O RDER OPERATIVE PORTION OF THE ORDER OR HEAR THE APPEAL D E NOVO. THE TRIBUNAL HAVING EXERCISED ITS DISCRETION TO HE AR THE APPEAL DE NOVO CANNOT BE SAID TO HAVE EXERCISED TH E POWER WITHOUT JURISDICTION. IN THE INSTANT CASE ALSO WE ARE OF THE VIEW THAT TH E MISTAKES POINTED OUT BY THE ASSESSEE GO TO THE ROOT OF THE MATTER. IN A DDITION TO THE ABOVE THE VARIOUS PROVISIONS AND RULES THAT WERE POINTED OUT BOTH THE PARTIES DURING THE HEARING OF PETITION ALSO NEED TO BE CONSIDERED. HENCE IN THE INTEREST OF SUBSTANTIAL JUSTICE WE ARE OF THE VIEW THAT THE APPEAL SHOULD BE HEARD AFRESH DE NOVO. ACCORDINGLY WE RECALL OUR ORDER DATED 13.5.2010 IN SO FAR IT RELATES TO APPEAL NUMBERED AS ITA NO.321/VIZAG/2 009 I.E. THE APPEAL MA NO.85 OF 2010 ARDEE BUSINESS SERVICES (P) LTD VI SAKHAPATNAM PAGE 10 OF 10 FILED BY THE DEPARTMENT. ACCORDINGLY WE DIRECT THE REGISTRY TO POST THE SAID APPEAL FOR HEARING IN THE NORMAL COURSE AND THE DAT E OF HEARING BE INTIMATED TO BOTH THE PARTIES. 9. IN THE RESULT THE MISCELLANEOUS PETITION FI LED BY THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 10 TH DECEMBER 2010. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM DATE:10-12-2010 COPY TO 1 ARDEE BUSINESS SERVICES PVT. LTD. 9-34 BALAJI NAGAR SRIPURAM VISAKHAPATNAM 530 003. 2 THE ADDL. CIT RANGE-3 VISAKHAPATNAM 3 4. THE CIT(A) VISAKHAPATNAM THE CIT VISAKHAPATNAM 5 THE DR ITAT VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM