Income Tax Act, 1961: s.254(2) – Scope of – Held: In exercise of powers under s.254(2) of the Act, the Appellate Tribunal may amend any order passed by it under sub-section (1) of s.254 of the Act with a view to rectifying any mistake apparent from the record only – Therefore, the powers under s.254(2) of the Act are akin to Or. XLVII r.1 CPC – While considering the application under s.254(2) of the Act, the Appellate Tribunal is not required to re-visit its earlier order and to go into detail on merits – Powers under s.254(2) of the Act are only to rectify/correct any mistake apparent from the record – Code of Civil Procedure, 1908 – Or. XLVII r.1. Allowing the appeals, the Court
HELD: 1.1 The order passed by the ITAT recalling its earlier order is beyond the scope and ambit of the powers under Section 254(2) of the Act. While allowing the application under Section 254(2) of the Act and recalling its earlier order, it appears that the ITAT has re-heard the entire appeal on merits as if the ITAT was deciding the appeal against the order passed by the C.I.T. In exercise of powers under Section 254(2) of the Act, the Appellate Tribunal may amend any order passed by it under subsection (1) of Section 254 of the Act with a view to rectifying any mistake apparent from the record only. Therefore, the powers under Section 254(2) of the Act are akin to Order XLVII Rule 1 CPC. [Para 3.2][619-G-H; 620-A-B]
1.2 If the Assessee was of the opinion that the order passed by the ITAT was erroneous, either on facts or in law, in that case, the only remedy available to the Assessee was to prefer the appeal before the High Court, which as such was already filed by the Assessee before the High Court, which the Assessee withdrew after the order passed by the ITAT recalling its earlier order. [Para 4][620-C-E]
2. From the impugned judgment and order passed by the High Court, it appears that the High Court has dismissed the writ petitions by observing that (i) the Revenue itself had in detail gone into merits of the case before the ITAT and the parties filed detailed submissions based on which the ITAT passed its order recalling its earlier order; (ii) the Revenue had not contended that the ITAT had become functus officio after delivering its original order and that if it had to relook/revisit the order, it must be for limited purpose as permitted by Section 254(2) of the Act; and (iii) that the merits might have been decided erroneously but ITAT had the jurisdiction and within its powers it may pass an erroneous order and that such objections had not been raised before ITAT. None of the aforesaid grounds are tenable in law. Merely because the Revenue might have in detail gone into the merits of the case before the ITAT and merely because the parties might have filed detailed submissions, it does not confer jurisdiction upon the ITAT to pass the order de hors Section 254(2) of the Act. [Paras 5 and 6][620-F-H; 621-A-B]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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