Case Note & Summary
The case involves an appeal by the Commissioner of Income Tax-9 against an order of the Income Tax Appellate Tribunal (ITAT) dated 15th January, 2007, whereby the ITAT recalled its earlier order dated 31st August, 2006 under Section 254(2) of the Income Tax Act, 1961. The earlier order had dismissed the assessee's appeal against an order passed by the CIT under Section 263, which had set aside the assessment order on the ground that the Assessing Officer had erroneously allowed a deduction under Section 80HHC in respect of sale proceeds of a DEPB licence. The CIT had held that a DEPB licence was not covered under Section 28(iiia) and hence not eligible for deduction under Section 80HHC. The assessee appealed to the ITAT, which initially dismissed the appeal. However, the assessee filed a miscellaneous application under Section 254(2) contending that the Tribunal had not considered the binding decision of its Ahmedabad Bench in Pratibha Syntex Ltd. v. JCIT (81 ITD 118) and the provisions of Section 28(iiia) and Section 80HHC. The ITAT allowed the application and recalled its earlier order. The Revenue appealed to the High Court, arguing that the ITAT had exceeded its jurisdiction under Section 254(2) by reviewing its order on merits. The High Court held that the ITAT's order was within the parameters of Section 254(2) as the earlier order had not considered a binding decision and the relevant provisions, which constituted a mistake apparent from the record. The court dismissed the appeal, finding no substantial question of law.
Headnote
A) Income Tax - Appellate Tribunal - Section 254(2) - Recall of Order - Mistake Apparent from Record - The ITAT recalled its earlier order dated 31st August, 2006 under Section 254(2) of the Income Tax Act, 1961, on the ground that the order suffered from a mistake apparent from the record. The High Court held that the ITAT's order was within the parameters of Section 254(2) as the earlier order had not considered the binding decision of the Ahmedabad Bench in Pratibha Syntex Ltd. v. JCIT (81 ITD 118) and the provisions of Section 28(iiia) and Section 80HHC. The appeal by the Revenue was dismissed. (Paras 1-6)
Issue of Consideration
Whether the Income Tax Appellate Tribunal's order recalling its earlier order under Section 254(2) of the Income Tax Act, 1961, falls within the parameters of that provision.
Final Decision
The High Court dismissed the appeal, holding that the ITAT's order under Section 254(2) was within its jurisdiction as the earlier order had not considered a binding precedent and relevant statutory provisions, which amounted to a mistake apparent from the record.
Law Points
- Section 254(2) of the Income Tax Act
- 1961
- recall of order
- mistake apparent from record
- Section 263
- Section 80HHC
- Section 28(iiia)
- DEPB licence
Case Details
2010 LawText (BOM) (02) 71
Income Tax Appeal No.26 of 2010
Dr. D.Y. Chandrachud, J.P. Devadhar
Mr. Suresh Kumar for appellant, Mr. Vikas Singh with Sashi Tulsiyan, Ms. Amrita Narayan i/b. M/s. Sutapa Saha for respondent
The Commissioner of Income Tax-9
M/s. Earnest Exports Ltd.
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Nature of Litigation
Appeal by Revenue against ITAT order recalling its earlier order under Section 254(2) of the Income Tax Act, 1961.
Remedy Sought
Revenue sought to set aside the ITAT order dated 15th January, 2007 recalling its earlier order.
Filing Reason
Revenue contended that the ITAT exceeded its jurisdiction under Section 254(2) by reviewing its order on merits.
Previous Decisions
The ITAT had initially dismissed the assessee's appeal on 31st August, 2006, but later recalled that order on 15th January, 2007 under Section 254(2).
Issues
Whether the ITAT's order recalling its earlier order under Section 254(2) of the Income Tax Act, 1961, falls within the parameters of that provision.
Submissions/Arguments
Revenue argued that the ITAT had no jurisdiction under Section 254(2) to recall its earlier order as there was no mistake apparent from the record, and the order amounted to a review on merits.
Assessee argued that the ITAT's earlier order had not considered a binding decision of its Ahmedabad Bench and the relevant provisions, which constituted a mistake apparent from the record.
Ratio Decidendi
The ITAT has jurisdiction under Section 254(2) of the Income Tax Act, 1961 to recall its order if there is a mistake apparent from the record, which includes failure to consider a binding decision of its own bench or relevant statutory provisions.
Judgment Excerpts
The substantial question of law which arises before the Court, in this appeal filed by the Revenue, is whether in the circumstances of the case, the impugned order falls within the parameters of the jurisdiction under Section 254(2) of the Act.
In the present case, the Tribunal has found that its earlier order suffered from a mistake apparent from the record inasmuch as it had not considered the decision of its Ahmedabad Bench in the case of Pratibha Syntex Ltd. v. JCIT (81 ITD 118) and the provisions of Section 28(iiia) and Section 80HHC. The Tribunal was, therefore, justified in recalling its earlier order.
Procedural History
The Assessing Officer passed an order under Section 143(3) on 25th March, 2003 allowing deduction under Section 80HHC. The CIT exercised jurisdiction under Section 263 on 22nd March, 2005, setting aside the assessment order. The assessee appealed to the ITAT, which dismissed the appeal on 31st August, 2006. The assessee filed a miscellaneous application under Section 254(2), and the ITAT recalled its earlier order on 15th January, 2007. The Revenue filed an appeal to the High Court against the recall order.
Acts & Sections
- Income Tax Act, 1961: 254(2), 263, 80HHC, 28(iiia), 143(3)
- Foreign Trade (Development & Regulation) Act, 1992:
- Imports and Exports (Control) Act, 1947:
