H. L. DATTU, J. ( 1 ) THE IT Department is before this Court in this appeal filed under Section 260a of the IT Act, 1961 ('the Act' for short ). Though two questions of law are raised for our consideration and decision, in our opinion, only the first question of law raised in the memorandum of appeal requires our consideration in this appeal. The said question of law is as under : "whether the Tribunal was correct in dismissing the appeal and the miscellaneous petition filed by the Revenue against the order of the Appellate CIT setting aside the penalty levied on the ground that the annexures and the form filed along with the appeal memo did not disclose the correct number of the impugned order without providing the Revenue an opportunity to rectify the defect and considering the matter on merits by recording a finding on the controversy before it when a specific ground as to the challenge to the penalty order had been made in the appeal memo filed by the Revenue. " ( 2 ) FACTS as stated in the memorandum of appeal by the Revenue are as under : for the asst. yr. 1992-93, the assessee had filed its return of income declaring a total income of Rs. 5,89,240. The assessing authority had taken up the returns filed by the assessee for scrutiny. After such scrutiny, the assessing authority on the ground that there is concealment of the income and inaccurate particulars in the returns filed, had quantified the tax liability of the assessee on the total taxable income of Rs. 26,86,880 vide his assessment order dt. 31st March, 1995. ( 3 ) THE assessing authority had also initiated proceedings under Section 271 (1) (c) of the Act for levy of penalty. After hearing the assessee, the assessing authority had levied a penalty of Rs. 12,06,140 by his order dt. 28th Sept. , 1995. ( 4 ) THE assessee, being aggrieved by the aforesaid order passed by the assessing authority in levying penalty under Section 271 (1) (c) of the Act, had carried the matter in an appeal before the CIT (A), Bangalore. 12,06,140 by his order dt. 28th Sept. , 1995. ( 4 ) THE assessee, being aggrieved by the aforesaid order passed by the assessing authority in levying penalty under Section 271 (1) (c) of the Act, had carried the matter in an appeal before the CIT (A), Bangalore. ( 5 ) THE first appellate authority, following the law laid down by the Bombay High Court in the case of CIT v. Dharamchand L. Shah (1993) 204 ITR 462 (Bom), had allowed the appeal and had set aside the levy of penalty imposed by the assessing authority under Section 271 (1) (c) of the Act. ( 6 ) THE Revenue had filed an appeal before the Tribunal. In the grounds urged in the memorandum of appeal, the Revenue had contended that the appellate authority was not justified in cancelling the order of levy of penalty passed by the assessing authority in exercise of his powers under Section 271 (1) (c) of the Act. But, in the memorandum of appeal, they had only stated that they were questioning the correctness or otherwise of the order passed by the first appellate authority in respect of quantification of total income passed under Section 143 (3) of the act and the order that was produced along with the memorandum of appeal was also in respect of appellate order passed against the assessment order under Section 143 (3) of the Act. ( 7 ) THE Tribunal, noticing the defect in the memorandum of appeal filed, has rejected the appeal filed by the Revenue by its order dt. 22nd April, 2002. The order passed by the Tribunal is as under: "2. Ground No. 2 reads as under: "the learned CIT{a) erred in cancelling the penalty of Rs. 12,06,140 levied by the AO under section 271 (1) (c) by merely relying on the decision of Bombay High Court in the case of CIT v. Dharamchand L. Shah (1993) 204 ITR 462 (Bom ). When this anomaly was brought to the notice of the learned Departmental Representative, Shri v. Mahalingam, he was fair enough to submit that the CIT concerned has not permitted him to challenge the order of the CIT (A) in respect of quantification of total income passed under section 143 (3) of the IT Act. When this anomaly was brought to the notice of the learned Departmental Representative, Shri v. Mahalingam, he was fair enough to submit that the CIT concerned has not permitted him to challenge the order of the CIT (A) in respect of quantification of total income passed under section 143 (3) of the IT Act. Even the order appealed against attached with the appeal memo is in respect of appellate order against assessment order under Section 143 (3) of the Act. No ground has been raised in respect of the order of the CIT (A ). It is, therefore, clear that the appeal seems to have been filed mechanically and without proper application of mind. This has put the assessee in great trouble. This also has taken the valuable time of this Tribunal. This would have been a fit case to award cost to the assessee. However, since the learned departmental Representative was fair enough to concede that there has been a genuine mistake, though the appeal may be dismissed, no further damage be done to the Revenue authorities. Seemingly there is no mala fide intention. So we do not award any costs. However, we caution the Department to file an appeal not in a casual or indifferent manner. " ( 8 ) AGGRIEVED by the said order, the Revenue had filed a miscellaneous petition before the tribunal, inter alia, requesting the Tribunal to review its earlier order dt. 22nd April, 2002. The tribunal, by its order dt. 3rd April, 2003, has rejected even the miscellaneous petition filed by the Revenue. That is how the Revenue is before this Court, being aggrieved by the order passed by the Tribunal in ITA No. 221 of 1996, dt. 22nd April, 2002. ( 9 ) SRI Seshachala, learned counsel appearing for the Revenue, would submit that the Tribunal, without giving an opportunity to the Revenue to correct some mistakes in the memorandum of appeal filed before it, could not have rejected the appeal solely on the ground that there are certain defects in the memorandum of appeal filed before them. According to the learned counsel, the Tribunal has not properly exercised its discretionary powers, which are vested in it under Rule 12 of the Income-tax (Appellate Tribunal) Rules. According to the learned counsel, the Tribunal has not properly exercised its discretionary powers, which are vested in it under Rule 12 of the Income-tax (Appellate Tribunal) Rules. Therefore, (he) requests this Court to annul the order passed by the Tribunal and further, to remand the matter to the Tribunal firstly, to permit the Revenue to make appropriate corrections in the memorandum of appeal filed before it and thereafter, decide the appeal on merits. ( 10 ) SRI Sarangan, learned senior counsel appearing for the assessee, would contend, that the tribunal was wholly justified in rejecting the appeal filed by the Revenue before it. According to the learned senior counsel, there are two options open to the Tribunal, either to dismiss the memorandum of appeal if there are any technical defects in the appeal memorandum and also, to return the appeal papers to the advocate who has filed the appeal to make appropriate corrections in the appeal memorandum. Since the Tribunal has exercised its first discretion vested in them under Rule 12 of the Rules, no question of law would arise for consideration of this Court in the appeal filed by the Revenue. In aid of his submission, the learned senior counsel has placed reliance on the observations made by the High Court of Delhi in the case of CIT v. British airways (2004) 141 Taxman 613 (Del ). ( 11 ) THE case law cited by the learned senior counsel, in our opinion, explains firstly, the purport of Rule 12 of the Rules, 1963, and secondly, it is observed in the said order, that the Tribunal is vested with the discretion either to reject the appeal in limine or to return the appeal papers to the party, who has filed the appeal to make appropriate corrections in the memorandum of appeal within a particular time, Therefore, in our opinion, the said decision may not assist the learned senior counsel. ( 12 ) SECTION 253 (2) of the Act authorises the CIT to direct the AO to file an appeal to the Tribunal if he objects to any order passed by the Dy. CIT (A) or, as the case may be, a CIT (A) under section 154 or Section 250 of the IT Act, 1961. ( 12 ) SECTION 253 (2) of the Act authorises the CIT to direct the AO to file an appeal to the Tribunal if he objects to any order passed by the Dy. CIT (A) or, as the case may be, a CIT (A) under section 154 or Section 250 of the IT Act, 1961. Sub-Section (6) of Section 253 of the Act envisages that an appeal to the Tribunal shall be in the prescribed form and shall be verified in the prescribed manner. ( 13 ) RULE 47 of the IT Rules, 1962, specifies the form of appeal and memorandum of cross-objections to the Tribunal. Sub-rule (1) of Rule 47 of the Rules specifies that an appeal under Sub-section (1) or Sub-section (2) of Section 253 of the Act to the Tribunal requires to be made in Form No. 36. Apart from other requirements that should be filled while filing Form No. 36 to the Tribunal, the person filing the appeal should also indicate the section under which the order appealed against was passed, the section of the IT Act under which the AO passed the order and the relief claimed in the appeal, etc. ( 14 ) IN exercise of the powers conferred by Sub-section (5) of Section 255 of the IT Act 1961, the tribunal has framed Rules to regulate the procedure of the Tribunal and the procedure of the benches of the Tribunal The Rules are known as "the Income-tax (Appellate Tribunal) Rules, 1963. " rule 6 of the Rules provides for procedure for filing appeals. Rule 8 of the Rules provides for contents of memorandum of appeal. Rule 9 of the Rules speaks of what to accompany the memorandum of appeal. Rule 11 of the Rules provides for grounds which may be taken up in appeal. Rule 12 of the Rules vests discretion in the Tribunal to reject a memorandum of appeal, if it is not in the prescribed form or to return it for being amended within such time as it may allow. The said rule is relevant for the purpose of this case and, therefore, it is extracted and it is as under: "12. Rejection or amendment of memorandum of appeal-The Tribunal may reject a memorandum of appeal, if it is not in the prescribed form or return it for being amended within such time as it may allow. The said rule is relevant for the purpose of this case and, therefore, it is extracted and it is as under: "12. Rejection or amendment of memorandum of appeal-The Tribunal may reject a memorandum of appeal, if it is not in the prescribed form or return it for being amended within such time as it may allow. On representation after such amendment, the memorandum shall be signed and dated by the officer competent to make an endorsement under Rule 7. " For the purpose of disposal of this appeal, in our opinion, the other rules need not be noticed by us. ( 15 ) A careful reading of Rule 12 of the Rules clearly gives an indication that the Tribunal has the discretion either to reject a memorandum of appeal, if it is not in the prescribed form or to return it for being amended within such time as it may allow. This only indicates, that the Tribunal has the discretion to permit an appropriate amendment being made in the memorandum of appeal presented before it. ( 16 ) KEEPING in view the language employed in the aforesaid Rules, let us once again notice the order passed by the Tribunal, dt. 22nd April, 2002. In the order passed by the Tribunal, it specifically notices that one of the grounds raised in the memorandum of appeal was that the learned CIT (A) erred in cancelling the penalty of Rs. 12,06,140 levied by the AO under Section 271 (1) (c) of the Act by relying on the observations made by the Bombay High Court in the case of CTT v. Dhaxamchand L. Shah (supra ). 12,06,140 levied by the AO under Section 271 (1) (c) of the Act by relying on the observations made by the Bombay High Court in the case of CTT v. Dhaxamchand L. Shah (supra ). ( 17 ) THE Tribunal alter noticing the aforesaid ground raised in the memorandum of appeal, further observes, that even before the Tribunal, the Departmental Representative had very fairly conceded that he was not authorised by the competent authority to challenge the order of the cit (A) in respect of the quantification of the total income passed under Section 143 (3) of the act and the order appealed against attached with the appeal memo is in respect of the appellate order against assessment order passed under Section 143 (3) of the Act and no ground has been raised in respect of the order of the CIT{a) and, therefore, after coming to the conclusion that the appeal seems to have been filed mechanically and without proper application of mind, dismisses the appeal filed by the Revenue. ( 18 ) IN the appeal filed, the Revenue instead of requesting the Tribunal to set aside the order passed by the CIT (A) insofar as setting aside the order passed by the assessing authority in levying penalty under Section 271 (1) (c) of the Act, had questioned the order of CIT{a) in respect of quantification of total income passed by the assessing authority under Section 143 (3) of the Act. Before the Tribunal, the learned Departmental Representative fairly concedes that it is a genuine mistake. Now the question is, whether under the facts and in the circumstances of the case, the Tribunal is justified in rejecting the appeal filed by the Revenue in limine. We are conscious of the fact that the appeal against the order passed by the Tribunal lies before this court only on a point of law. In our view, the erroneous exercise of discretion by the Tribunal would give rise to an error in point of law. The discretionary powers are very commonly conferred on the Tribunals, Courts and other public bodies. In our view, the erroneous exercise of discretion by the Tribunal would give rise to an error in point of law. The discretionary powers are very commonly conferred on the Tribunals, Courts and other public bodies. It is inherent in all discretionary powers that it includes the power to decide freely, whether rightly or wrongly, without liability to correction within the area of discretion allowed by law, but even the discretionary order passed, if it is vitiated by unreasonableness, self-misdirection, irrelevant considerations, some legal error or produces 'manifest injustice', an appeal can be filed by the aggrieved party and such an appeal is maintainable before this Court. ( 19 ) IN our opinion, a technical mistake is committed by the Revenue while filing the memorandum of appeal before the Tribunal. In our view, the Tribunal, keeping in view the language employed in Rule 12 of the Rules, could have exercised the discretion and could have returned the appeal papers to the Revenue to make appropriate corrections within a particular time, when it was specifically brought to their notice with reference to the grounds of appeal raised in the memorandum of appeal that they are in fact challenging only the order passed by the CIT (A) deleting the levy of penalty passed by the assessing authority under Section 271 (1) (c) of the Act. The rule-making authority vests discretion in the Courts, Tribunals and public bodies with a fond hope that the discretion would be used and extended in aid of doing substantial justice to the parties. It is true that Rule 12 of the Rules, grants power to the Tribunal to reject a memorandum of appeal, if 'it is not in the prescribed form. But the rule also grants power to the tribunal to return the appeal papers to make appropriate amendment within the time granted by it. These wide powers are required to be exercised by the Tribunal to meet the ends of justice. For us, it appears that the decision of the Tribunal produces 'manifest injustice' to the Revenue and therefore, the question of law raised by the Revenue requires to be answered in affirmative and against the assessee. ( 20 ) ACCORDINGLY, the following : order . The question of law raised by the Revenue is answered in their favour and against the assessee.. The order passed by the Tribunal in appeal No. 221 /bang/1996, dt. ( 20 ) ACCORDINGLY, the following : order . The question of law raised by the Revenue is answered in their favour and against the assessee.. The order passed by the Tribunal in appeal No. 221 /bang/1996, dt. 22nd April, 2002, is set aside.. The matter is remanded back to the Tribunal with a direction to the Tribunal to pass an order as envisaged in the second limb of Rule 12 of the Rules. IV. If for any reason, the Revenue fails to comply with the directions that the Tribunal may issue, the Tribunal is at liberty to dismiss the appeal. Ordered