Commissioner of Income Tax vs K.M. Sugar Mills (P.) Ltd.

The Income Tax Appellate Tribunal, Allahabad has referred the following question of law u/s 256(1) of the Income Tax Act, 1961 (hereinafter referred to as an Act), for the opinion of this court :

"Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was legally correct in recalling a part of its order dated December 1, 1981, confirming the penalty u/s 271(1)(c) of the Income Tax Act, 1961 ?"

The present reference relates to the assessment year 1973-74. The Tribunal vide order dated December 1, 1981, has decided the appeal filed by the assessee. Thereafter, an application was filed by the assessee contending that certain mistake apparent from the record had crept in the order of the Tribunal and, therefore, the entire order needs to be recalled and a fresh opportunity of hearing be allowed. The Tribunal vide order dated June 14, 1983, had partly allowed the application. It has held that grounds Nos. 2, 3 and 4 set out in the memorandum of appeal had not been considered by the Tribunal while deciding the appeal.

We have heard Shri A. N. Mahajan, learned counsel appearing for the Revenue. Nobody has put in appearance on behalf of the assessee. It is not in dispute that grounds Nos. 2, 3 and 4 set out in the memorandum of appeal have not been adjudicated upon by the Tribunal. We are in respectful agreement with the decision of the court in the case of Commissioner of Income Tax Vs. Keshav Fruit Mart, which held that (headnote) :

"Omission to consider a ground raised in the memorandum of appeal before the Income Tax Appellate Tribunal is a mistake apparent from the record and the Tribunal would be justified in setting aside its order passed without doing so."

Thus, grounds Nos. 2, 3 and 4 raised in the memorandum of appeal ought to have been considered by the Tribunal while deciding the appeal and failing to do was a mistake apparent from the record which had crept in the order of the Tribunal. The Tribunal was, therefore, perfectly justified in recalling the order in exercise of powers u/s 254(2) of the Act.

In view of the aforesaid discussion, we do not find any illegality in the order of the Tribunal. The question referred to us, therefore, is answered in the affirmative, i.e., in favour of the assessee and against the Revenue. However, the parties shall bear their own costs.