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2001 DIGILAW 1011 (RAJ)

C. I. T. Jodhpur v. S. S. Gupta

2001-07-02

H.R.PANWAR, RAJESH BALIA

body2001
Honble BALIA, J.–Heard learned counsel for the parties. (2). In this appeal, the petitioner challenges the order passed by the Income Tax Appellate Tribunal, Jaipur Bench Jaipur on Misc. Application No. 17/JP/99 made by the assessee in respect of common judgment delivered in IIA No. 2062 to 2066/JP/96 relating to assessment year 83-84 to 87-88. (3). Respondent assessee is an independent assessee in the status of an ``Individual. He was also a partner in 7 firms named in the impugned order. Amongst other issues the Tribunal held that the 7 firms in which the respondent assessee was a partner were Benami for the assessee and assessee to be the real owner of such firms. On this finding the income of all the 7 firms for the 5 assessment years in question were clubbed with the income of the assessee as an individual. (4). Appellate order of the Tribunal was passed on 23rd Feb., 1999. In recording the aforesaid findings, the Tribunal has primarily relied on a letter dated 11.1.1999 received from the assessing officer, through which it was informed that in the assessments relating to the firms, the firms were held to be not genuine but Benami of the assessee and the income of the firms were accordingly clubbed in the hands of S.S. Gupta for the assessment years up to assessment year 83-84 to 87-88, the firms have been assessed at nil income. (5). In the course of arguments, during hearing of appeal the assessee has urged that the assessment of the firms were pending. However, in view of the aforesaid letter dated 11.1.1998 the Tribunal reached its conclusion that the firms have already been assessed at nil income and after considering all other facts of the case the Tribunal held that finding of the assessing authority that the assessee S.S. Gupta is the real owner of all other firms and the firms are benami of S.S. Gupta was justified. (6). After making of the order, the misc. application was moved by the assessee bringing out to the notice of the Tribunal that the hearing of the appeals were completed on 7.1.1999 and the letter dated 11.1.1999, which is after the appeals were heard, was never disclosed to the petitioner. It was contended by the petitioner during the course of hearing of the misc. application till date no assessment has been made in the case of firm. (7). It was contended by the petitioner during the course of hearing of the misc. application till date no assessment has been made in the case of firm. (7). Therefore, according to the assessee, the Tribunal has relied on information contained in a document which came into existence after hearing was completed without disclosing the same to the assessee and taking note of same facts which did not exist namely about the completion of the assessment of the firms at nil. About these aspects of the matter the learned departmental representative appearing before the Tribunal had agreed that the letter dated 11.1.1997 was received after hearing was completed and that letter was filed after hearing was completed as per the requirement of the Tribunal but while furnishing letter to the Tribunal copy thereof was not furnished to the counsel of the assessee and no opportunity was given to the assessee to explain the facts mentioned in letter of AO. He also agreed that so far as the question of clubbing the income of the firms with the income the assessee is concerned the same may be recalled and may be decided again after seeing the records. (8). It is in the aforesaid facts and circumstances and rival submissions made by the respective representative of the assessee and revenue and the concession made by the departmental representative the Tribunal recalled its order on the point of clubbing and directed the appeals to be placed for hearing in due course. (9). The learned counsel for the revenue has urged that a substantial question of law arises in the present case that whether in the facts and circumstances of the case the ITAT was justified in recalling its earlier order passed on 23rd Feb., 1999 by taking a different view of the same set of facts. (10). (9). The learned counsel for the revenue has urged that a substantial question of law arises in the present case that whether in the facts and circumstances of the case the ITAT was justified in recalling its earlier order passed on 23rd Feb., 1999 by taking a different view of the same set of facts. (10). As the order speaks for itself and about the facts stated in the order as stated above there is no dispute about correctness of such facts the answer is self-evident that mistake was apparent on the face of record inasmuch as a finding of fact against the assessee has been reached on the basis of material which was conveyed to Tribunal after hearing was over, and thus Tribunal inadvertently took into consideration such information which was never disclosed to the assessee without affording any opportunity to him to explain the information transmitted to the Tribunal without notice to the assessee which apparently vitiated the order founded on such information. Taking into account such material for basing its findings which was never made part of record, amounts to a mistake apparent from record, which is fatal to sustain the order. This mistake is obvious from record. (11). Once the conclusion is reached that there exist a mistake apparent on the face of record, the Tribunal has necessary power to rectify its order and for eliminating such mistake the only order which the Tribunal could have passed was the one which it has passed namely recalling its order and Consequently placing the appeals and rehearing on the subject of clubbing. (12). In this connection we may usefully refer to a Bench decision of Bombay High Court in Blue Star Eng. Co. (Bom.) Pvt. Ltd. vs. CIT (1), wherein the court said:- ``Under Sec. 154 the power to rectify the error must extend to elimination of error, even though the error may be such as to go to the root of order and its elimination may result in the whole order falling to the ground (13). We accordingly find no merit in this appeal. The appeal is dismissed.