These two miscellaneous applications arising out of common order of the Tribunal dated 23-12-1997, in ITA Nos. 72 & 73/Asr/1991 for the assessment years 1985-86 and 1986-87, respectively, were heard together and are being disposed of by this common order, for the sake of convenience.
First, we will take up M.A. No. 15/Asr/1998. In this miscellaneous application under section 254(2) of the Income Tax Act, 1961, the assessee has prayed that mistakes apparent from the record may kindly be rectified. The contents of this application are reproduced hereunder : 2. That in the above appeal, the appellant had disputed the imposition of penalty of Rs. 1,672, under section 271(1)(c) of the Income Tax Act.
3. That the penalty was imposed as a result of addition made on account of certain entries found in a notice book seized during the search operation from the residential premises of Shri Bhagwan Dass, a partner of the appellant-firm. The addition had been made and the penalty had been imposed on a sole ground that the appellant-firm is a dealer in Karyana items and entries recorded in the note book also pertained to Karyana items.
4. The said appeal of the appellant has been dismissed by making the following observations in para No. 3 of the order passed by the Hon'ble Bench.
3. The learned counsel of the appellant pleaded that they have submitted an explanation which was bona fide and it was onus on part of the department to prove that the entry is the income of the appellant ........." 5. It is here above the mistake has crept in. The argument of the appellant, during all hearing had been as under : (i) That the note book containing entries was found at the residential premises of Shri Bhagwan Dass.
(ii) That Shri Bhagwan Dass, besides being partner in the appellant-firm is also a partner in M/s Goel Sugar Co. Goniana Mandi.
His wife Smt. Laxmi Devi is also a partner in M/s Jot Ram Bhagwan Dass, Goniana.
That all the above points were noted down by Hon'ble J.M., Shri Vimal Gandhi on the proceedings register or on some other paper. The paper book filed by the assessee contains documents supporting the above arguments. Thus, the non-consideration of the above documents is a mistake of law requiring an amendment of the order.
6. Besides above, it was announced by the Hon'ble J.M. in the open court. 'There is no connecting material between the income and the appellant'. When the appellant tried to cite the case law from Hon'ble Bombay High Court affirming that in order to impose penalty under Explanation to section 271(1)(c), the Income Tax Officer must invoke the Explanation at the time of initiation of penalty proceedings, the appellant was stopped from doing so by the Hon'ble J.M., of course by rightly observing that "there is nothing in this petty case to go much in law.
Accordingly, a different pronouncement in the written order of the Hon'ble Bench is also a mistake requiring amendment in the order.
Before us, Shri Rakesh Goel, the learned counsel for the assessee submitted that the Tribunal decided the appeals of the assessee, i.e., in ITA Nos. 72 & 73 (Asr)/1991 relating to assessment years 1985-86 and 1986-87, respectively, vide its consolidated order dated 23-12-1997.
The main contention of the learned counsel for the assessee is that while confirming the penalties under section 271(1)(c) of the Income Tax Act, 1961 of Rs. 1,672 and Rs. 9,250, sustained by the learned Commissioner (Appeals), the Tribunal vide para 3 has stated as under : "3. The learned counsel of the appellant pleaded that they have submitted an explanation which was bona fide and it was onus on the part of the department to prove that the entry is the income of the appellant. The learned counsel has submitted that addition of Rs. 2,701 was not specific addition but was on an ad hoc addition to cover leakage of the revenue.
According to the learned counsel for the assessee, no such argument was advanced on behalf of the assessee at the time of the hearing of the appeal. He further submitted that the argument of the assessee before the Tribunal was that the 'Note book' containing entries was found at the residential premises of Bhagwan Dass, a partner. He further contended that it was explained before the Tribunal that Shri Bhagwan Dass, besides partner in the assessee-firm was also a partner in M/s Goel Sugar Co., Goniana Mandi. It was also brought to the notice of the Tribunal that Smt. Laxmi Devi, wife of Shri Bhagwan Dass, was also a partner in M/s Jot Ram Bhagwan Dass, Goniana. According to the learned counsel for the assessee, all the above three firms were dealing in Karyana items.
The next contention of the assessee, before the Tribunal was that it was not established on record that the notebook could not be linked with the assessee. Shri Rakesh Goel, the learned counsel for the assessee, further submitted before us that the above arguments were duly noted down by the Honble J.M. Shri Vimal Gandhi in the proceedings register or on some other paper. According to him, the non-consideration of the above arguments can be considered as a mistake of law and, therefore, the order of the Tribunal, i.e., in ITA No.72/Asr/1991 may be recalled/rectified for reconsideration.
On the other hand, Shri Tarsem Lal. the learned Departmental Representative submitted that the powers vested in the Tribunal under section 254(2) of the Income Tax Act, 1961, can be exercised for rectifying the mistake apparent from record and not for reviewing any order made under section 254(1), of the Income Tax Act. He vehemently argued that the order dated 23-12-1997, passed by the Tribunal in ITA Nos. 72 & 73 (Asr)/1991 did not suffer from any mistake apparent justifying its review. It is stated that law is well established on this point that the order passed by the Tribunal under section 254(1) cannot be reviewed under the garb of rectification. He, therefore, pointed out that the averments made in the instant application are without any basis and there is no material on record in support of the contentions raised therein. It was also submitted by the learned Departmental Representative Shri Tarsem Lal that the order passed by the Tribunal on 23-12-1997, cannot be rectified, particularly, when the assessee has failed to pinpoint any apparent mistake. Furthermore, the Tribunal has passed a valid order under section 254(1) after hearing the learned representative of both the parties which fact is clear from the para 5 of the Tribunal's order.
The Tribunal has duly considered the arguments of both the parties advanced during the hearing of the appeals. It is also apparent from the order of the Tribunal that after considering the relevant entire facts as well as submissions of the parties, it was concluded that the penalties imposed by the assessing officer for both the years under consideration and subsequently confirmed by the learned Commissioner (Appeals) were fully justified. Shri Tarsem Lal, the learned Departmental Representative submitted that there is no material on record to suggest that the results of the appeals were announced in the open court. According to him, the above contention is without any basis and cannot be believed without there being any supportive evidence on the record. He also objected to this contention of the learned counsel for the assessee that the then Hon'ble J.M. Shri Vimal Gandhi, sitting with the then Hon'ble A.M., Shri G.L. Garoo, had noted down the arguments allegedly advanced before them.
In view of the above, the learned Departmental Representative urged that the application moved by the assessee is without any merit and the same may be dismissed.
We have carefully considered the rival submissions and gone through the contents of the above application as well as order of the Tribunal. We find that the Tribunal decided the penalty appeals for the assessment years 1985-86 and 1986-87 vide its order dated 23-12-1997, in ITA No.72 & 73 (Asr)/1991. These appeals were heard and decided by the Division Bench comprising S/Shri Vimal Gandhi, Hon'ble J.M. and G.L.
Garoo, the Hon'ble A.M. We have also gone through the original records.
It is apparent from the record that these two appeals were heard on 18-2-1997. It is apparent that these two appeals were allotted to Shri G.L. Garoo, the Hon'ble A.M. for dictating/writing the order/judgment on behalf of the Bench. From the records, it would be clear that there is no such indication that the results of the appeals were announced in the open court. At the same time, there is also no evidence in support of this contention of the assessee that the Hon'ble Members had made their intentions clear to this effect that the appeals of the assessee were being allowed. It is also apparent that the draft order was prepared by the Hon'ble A.M. Shri G.L. Garoo, and the same was placed before the Honble J.M. on 23-12-1997. The said order was approved and signed by the Hon'ble J.M. Shri Vimal Gandhi. In other words, the order became final on 23-12-1997, when the same was approved and signed by the J.M. In the case of ITAT v. V.K. Aggarwal & Anr. (1999) 235 ITR 175 (SC) the Hon'ble Apex Court held that "unless order of the Bench is signed by all members constituting it and is dated, it is not an order of the Tribunal, secondly, this signed and dated order has to be communicated both to the assessee and the Commissioner. In other words, the Hon'ble Supreme Court held that the order of the Tribunal becomes final when the same is signed by both the Members constituting the Bench. Thus, keeping in view the ratio laid down by the Honble Supreme Court in the case of ITAT v. V.K. Aggarwal & Anr. (supra), the order of the Tribunal, i.e., in order dated 23-12-1997, became final order when both the Hon'ble Members have put their signatures on the draft order after fully agreeing. In view of that, there is no force in these arguments of the learned counsel of the assessee that the written order of the Bench was different from the oral observations made during the course of hearing.
As we have already noted above that the Tribunal has decided the appeals after hearing the learned representatives of both the parties as well as after proper appreciation of the facts of the case and material on record. Keeping in view this fact alone, we do not see any apparent mistake from the record, which needs to be rectified. At the same time, the learned counsel for the assessee has raised this issue that while deciding the appeals, the Tribunal has not considered certain arguments made on behalf of the assessee. It is relevant to note that there is also no material on record to support this contention of the assessee. It is also well settled/established law that the Tribunal is not bound to discuss each and every arguments made at the time of hearing of the appeal. Even assuming for the sake of arguments, these points were raised before the Bench, even then the order of the Tribunal dated 23-12-1997, cannot be rectified under section 254(2) of the Income Tax Act. In our view, there is merit in this contention of the learned Departmental Representative that in the garb of an application for rectification, the assessee cannot be allowed to be permitted to reopen or reargue the matter which is not permissible under section 254(2) of the Income Tax Act. In the case of Ms. Deeksha Suri & Ors. v. ITAT & Ors. (1998) 232 ITR 395 (Del), the Hon'ble Delhi High Court has held : "The foundation for exercising the jurisdiction is 'with a view to rectify and mistake apparent on the record' and the object is achieved by 'amending any order passed by it'. The power so conferred does not contemplate a rehearing which would have the effect of rewriting an order affecting the merits of the case. Else there would be no distinction between a power to review and a power to rectify a mistake.
What is not permitted to be done by the statute having deliberately omitted to confer review jurisdiction on the Tribunal cannot be indirectly achieved by recourse to section 254(2) of the Act." At this stage, it would also be relevant to state here that the Honble Supreme Court in the case of Hari Singh Mann v. Harbhajan Singh Bajwa & Ors. AIR 2001 SC 43 has held that there is no provision in the Code of Criminal Procedure authorising the High Court to review its judgment passed either in exercise of its appellate or revisional or original criminal jurisdiction. Therefore, the High Court was not justified in reviewing its order under section 482 of Code of Criminal Procedure. It is true in the Income Tax Act, 1961, also no power has been given to the Tribunal to review its own order and, therefore, applying ratio/principle laid down by the Hon'ble Supreme Court in the case of Hari Singh Mann v. Harbhajan Singh Bajwa & Ors.
We hold that the Tribunal cannot review its own order under section 254(2) of the Income Tax Act.
The net result of the above discussion is that the application moved by the assessee is without merit and hence, deserves to be dismissed.
Before parting with this case, we may think it appropriate to refer to the judgment of the Hon'ble Orissa High Court in the case of CIT v.ITAT & Anr. (1992) 196 ITR 590 (Ori) wherein it has been held that "in order to attract application of section 254(2) of the Income Tax Act, the mistake must exist and it must be apparent from the record. The mistake means to take or understand wrongly or inaccurately; to make an error in interpreting; an error; a fault; understanding, as misconception. Apparent means visible, capable of being seen, easily seen, obvious, plain and a mistake which can be rectified is one which is dependent, which is obvious and whose discrepancy is not dependent on argument or elaboration." But in the instant case, the learned authorised representative could not pinpoint any apparent mistake from the record which can be rectified.
In this miscellaneous application, the assessee has taken similar contentions which were taken in M.A. No. 15 (Asr)/1998 (supra) except in para 2 where the amount of penalty is Rs. 9,250 instead of Rs. 1,672.
Since we have already dismissed the miscellaneous application of the assessee, i.e., M.A. No. 15(Asr)/1998 arising out of ITA No. 72 (Asr)/1991. The facts of this miscellaneous application are similar to the facts of M.A. No. 15(Asr)/1998 (supra). The only difference is that in M.A. No. 15(Asr)/1998, the quantum is of Rs. 1,672, whereas in the instant miscellaneous application, the quantum of penalty under section 271(1)(c) is Rs. 9,250. The rival contentions are also identical. In that view of the matter, the decision rendered by us in M.A. No. 15 (Asr)/1998 shall apply mutatis mutandis to the instant application also. Accordingly, this miscellaneous application is also dismissed.