Appeals Tribunal not Empowered to Recall its Earlier Order while Exercising Power Under Section 254(2)

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The Tax Publishers Income Tax--Appeals Tribunal not Empowered to Recall its Earlier Order while Exercising Power Under Section 254(2) CA. Nisha Bhandari Recently the Supreme Court in CIT v. Reliance Telecom Ltd.'s case reiterated the view that while exercising power of rectification under Section 254(2), the Tribunal cannot recall its entire order and go into details on merits. The learned author in this write up makes a detailed analysis on the scope of Tribunal's power regarding recalling of its original order. 1. Tribunal empowered to rectify its order under Section 254(2) Sub-section (2) of Section 254 provides that the Appellate Tribunal may, at any time within six months from the end of the month in which the order was passed, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1) and shall make such amendment if the mistake is brought to its notice by the assessee or the assessing officer. Thus the Tribunal is empowered to invoke jurisdiction under Section 254(2) on its own as well as when it is brought to its notice by the assessee or the assessing officer. The first proviso to Section 254(2) provides that an amendment which has the effect of enhancing an assessment or reducing a refund payable to the assessee shall not be made under this section unless the Tribunal has given notice to the assessee of its intention to do so and has allowed a reasonable opportunity of being heard. 2. Scope of power of rectification Scope of power of rectification, in exercise of jurisdiction under Section 254(2), clearly contemplates that what can be corrected is an apparent mistake from record and not to deal with merits of the case and to recall the order, on the basis of taking second opinion, on the merit, which is not the scope of such rectification.--Vide Adarshveer P. Jain v. Asstt. CIT (2009) 32 SOT 356 (Mum-Trib). SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Income Tax--Appeals

Tribunal not Empowered to Recall its Earlier Order while Exercising Power Under Section 254(2)

CA. Nisha Bhandari

Recently the Supreme Court in CIT v. Reliance Telecom Ltd.'s case reiterated the view that while exercising power of rectification under Section 254(2), the Tribunal cannot recall its entire order and go into details on merits. The learned author in this write up makes a detailed analysis on the scope of Tribunal's power regarding recalling of its original order.

1. Tribunal empowered to rectify its order under Section 254(2)

Sub-section (2) of Section 254 provides that the Appellate Tribunal may, at any time within six months from the end of the month in which the order was passed, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1) and shall make such amendment if the mistake is brought to its notice by the assessee or the assessing officer. Thus the Tribunal is empowered to invoke jurisdiction under Section 254(2) on its own as well as when it is brought to its notice by the assessee or the assessing officer.

The first proviso to Section 254(2) provides that an amendment which has the effect of enhancing an assessment or reducing a refund payable to the assessee shall not be made under this section unless the Tribunal has given notice to the assessee of its intention to do so and has allowed a reasonable opportunity of being heard.

2. Scope of power of rectification

Scope of power of rectification, in exercise of jurisdiction under Section 254(2), clearly contemplates that what can be corrected is an apparent mistake from record and not to deal with merits of the case and to recall the order, on the basis of taking second opinion, on the merit, which is not the scope of such rectification.--Vide Adarshveer P. Jain v. Asstt. CIT (2009) 32 SOT 356 (Mum-Trib).