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Dr. Rajah Sir M.A. Muthiah Vs. Income-tax Officer - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Madras
Decided On
Judge
Reported in(1985)11ITD288(Mad.)
AppellantDr. Rajah Sir M.A. Muthiah
Respondentincome-tax Officer
Excerpt:
.....finding that there was a mistake and that the failure to correct that mistake was due to the lapse of the statutory body and it was held that that statutory body, which was the ito in that case, could not be allowed to take advantage of his own wrong. in the order of the tribunal also, it was found that there was a mistake which, if not corrected, would lead to miscarriage of justice and in anticipation of a court directing the tribunal to correct the mistake, the rectification was carried out. but, in the facts of the present case on the merits, it has been held that some income had escaped taxation and, therefore, any rectification of the decision of the tribunal with regard to the jurisdiction under section 147 would only lead to the result of cancelling the reassessment made for.....
Judgment:
1. In this case, the assessment for the assessment year 1972-73 was reopened under Section 147(b) of the Income-tax Act, 1961 ('the Act'), by the ITO for withdrawing the deduction of foreign exchange entitlement certificate charges in computing the interest income of the assessee from fixed deposits in Sri Lanka. By an order dated 5-7-1979, the Tribunal found that the foreign exchange entitlement certificate charges were not incurred for the purpose of earning the income and was not an admissible deduction. The Tribunal also rejected the contention of the assessee that the audit party's note could not be regarded as 'information' for the purpose of Section 147(b), in view of the decision of the Supreme Court in the case of R.K. Malhotra, ITO v.Kasturbhai Lalbhai [1977] 109 ITR 537. By this petition, it is contended on behalf of the assessee that since the Supreme Court has taken a different view on the question whether the audit party's note should be regarded as information in the subsequent decision in the case of Indian & Eastern Newspaper Society v. CIT [1979] 119 ITR 996, there was a mistake apparent on the face of the order of the Tribunal and it should, therefore, be rectified and the reassessment cancelled as being without jurisdiction. The revenue has opposed this application.

2. On consideration of the rival submissions, we are of the opinion that this application cannot be allowed for more than one reason.

Firstly, it must be remembered that the decision of the Supreme Court is the law of the land under Article 141 of the Constitution of India and the Tribunal having followed the decision of the Supreme Court, it cannot be considered to be a mistake by any stretch of imagination.

Secondly, even if a subsequent decision of the Supreme Court takes a different view, it could not be said to have obliterated the earlier decision for the period in which the earlier decision prevailed as the law of the land. Even on the principle that the Supreme Court only declares the law as it stood, it would not make it possible to understand it as having wiped out, retrospectively, the law declared by the Supreme Court earlier. Whether the subsequent decision of the Supreme Court has that effect is itself a debatable issue and, hence, there cannot be a mistake apparent from record on that score alone.

Thirdly, the Supreme Court has observed in the case of Tilokchand Motichand v. H.B. Munshi, CST AIR 1970 SC 898, at page 903, that a decision in a case once adjudicated upon and acquiesced in, may not be questioned in a fresh litigation revived only with the argument that the correct position was not known at the time when he abandoned his own litigation. The Supreme Court has further observed that in such a situation, there is no question of any mistake of law. It also appears to us that what the assessee actually seeks, is only a review of the decision on the basis of later decisions of the Supreme Court and clearly the Tribunal has no power to review and, hence, such an application cannot be entertained. Lastly, even assuming that there was a mistake apparent from the face of the order of the Tribunal, we are powerless to rectify it since more than four years have passed after the order is made. Under Section 254(2) of the Act, the Tribunal has to pass the order before the expiry of four years from the date of the order sough to be rectified. It is pointed out by the assessee that the petition was filed within four years, namely, on 15-4-1983 from the date of the order, namely, 5-7-1979 and, therefore, it was not due to the fault of the assessee that the time has elapsed for making the rectification. It may be that there was some lapse in the registry of the Tribunal in that this application was not posted for hearing before the expiry of four years time limit prescribed in the section. But, then the statute is clear and we do not think it is possible to exercise the power after the expiry of the period of limitation prescribed. Our attention is drawn to the order of the Cochin Bench of the Tribunal made in the case of His Highness Sir Rama Varma Maharajah of Travancore Palace [M.P. No. 2 (Coch.) of 1982, dated 11-6-1982], where such a power was exercised after the expiry of the period of limitation following the decision of the Allahabad High Court in the case of Vithaldas v. ITO [1969] 71 ITR 204. We find that the Allahabad High Court issued a writ, directing the statutory authority to make the correction on finding that there was a mistake and that the failure to correct that mistake was due to the lapse of the statutory body and it was held that that statutory body, which was the ITO in that case, could not be allowed to take advantage of his own wrong. In the order of the Tribunal also, it was found that there was a mistake which, if not corrected, would lead to miscarriage of justice and in anticipation of a court directing the Tribunal to correct the mistake, the rectification was carried out. But, in the facts of the present case on the merits, it has been held that some income had escaped taxation and, therefore, any rectification of the decision of the Tribunal with regard to the jurisdiction under Section 147 would only lead to the result of cancelling the reassessment made for taxing income, which had actually escaped taxation. We are, therefore, of the opinion that even otherwise, we should refrain from passing any order of rectification as the period prescribed under Section 254(2) has expired. In the circumstances, the application is dismissed.


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