M.L. RAWAT v. INCOME TAX OFFICER
[Citation -1985-LL-0427-4]

Citation 1985-LL-0427-4
Appellant Name M.L. RAWAT
Respondent Name INCOME TAX OFFICER
Court ITAT
Relevant Act Income-tax
Date of Order 27/04/1985
Assessment Year 1978-79
Judgment View Judgment
Keyword Tags alternative claim • mistake apparent • monies borrowed • credit balance • interest paid
Bot Summary: The main ground in the miscellaneous application is that the learned Judicial Member had made certain observations during the course of the hearing from which it was assumed by the assessee's counsel that the matter was being decided in his client's favour and he did not advance his arguments in full. All the same, the learned members are of the view that the fault, if any, would be essentially of the assessee's counsel. According to the learned Accountant Member, the counsel for the assessee was not prevented from arguing his case, full arguments had been advanced and considered and there was no case for a mistake apparent form the record. The learned Judicial Member has, on the other hand, considered it desirable to give the assessee a further opportunity of arguing his case in the following words: This observation was probably misunderstood by the representative of the assessee who did not address any further arguments on this aspect of the matter. Shri N.K. Poddar, the learned counsel for the assessee, has reiterated that the learned Judicial Member made certain observations while he was on his legs. The learned Judicial Member has decided to give another opportunity to the assessee's counsel as h e was slightly doubtful about the conclusion. Apart from the fact that there is difference between the Members as to the fact whether full arguments were advanced by the assessee's learned counsel, not arguing the case fully under some misapprehension, assuming it is correct, does not, to my mind, constitute apparent mistake on the face of the record so as to justify the recalling of the order for the purpose of hearing him again.


1. appellate order in this case was passed on 5-5-1984 wherein sum of Rs. 18,906 claimed as deduction as interest paid on monies borrowed by assessee, was rejected. Subsequent thereto, miscellaneous application dated 18-7-1984 was filed by assessee requiring Tribunal to rectify its appellate order on ground that order suffered from mistake apparent from record. 2. main ground in miscellaneous application is that learned Judicial Member had made certain observations during course of hearing from which it was assumed by assessee's counsel that matter was being decided in his client's favour and he did not advance his arguments in full. However, Tribunal passed order contrary to impression given at time of hearing and this has caused great injustice to assessee as his counsel did not have opportunity for full hearing on this issue. 3. Both learned members have in way agreed that some such observations might have perhaps been made during course of hearing by senior member who happens to be learned Judicial Member in this case. All same, learned members are of view that fault, if any, would be essentially of assessee's counsel. When observation is alleged to have been made, Tribunal was hearing counsel for assessee. assessee was appellant. departmental representative was not hear. Therefore, any observation made, could only be tentative and, in any event, counsel for assessee was not prevented from arguing his case in full. 4. According to learned Accountant Member, counsel for assessee was not prevented from arguing his case, full arguments had, in fact, been advanced and considered and there was no case for mistake apparent form record. learned Judicial Member has, on other hand, considered it desirable to give assessee further opportunity of arguing his case in following words: "This observation was probably misunderstood by representative of assessee who did not address any further arguments on this aspect of matter. Now, this alternative claim of assessee was ultimately rejected by Bench on ground that even before Tribunal, assessee's contention had been that loans were admittedly used for purpose of his profession and, consequently, no interest could be allowed as deduction against dividend income. I am slightly doubtful over correctness of this part of conclusion. relevant discussion in ITO's order reads as under: 'The assessee appeared but did not file any assessment (sic) it ought to be accounts as required and argued that even if such loans were utilised for purchasing shares-interest will not be inadmissible for deduction. Thus, it was not proved that such loan was used for profession.' This would seem to suggest that assessee did seek to claim interest as deduction even if loans were proved to have been utilised for purchasing shares at least alternatively. This part of assessee's contention was not specifically rejected by ITO though claim was otherwise disallowed. AAC has observed that total credit balance of loan amounts came to Rs. 1,06,500 whereas investment in equity shares worked out to Rs. 78,820 and capital balance was shown as at Rs. 16,324 only. Hence, according to him, assessee's contention that loans were incurred for purpose of meeting expenses of firm and not for purpose of investment did not hold good. This could be taken to impliedly mean that part of loans was utilised for purpose of investment. assessee's claim that interest to this extent against dividend income was again not specifically considered by AAC but his ground raised as whole was rejected. Nearly same is conclusion of Tribunal. Under these circumstances, it is quite possible that assessee may have been misled in assuming that claim for interest or part thereof would be allowed by Tribunal against dividend income and labouring under that misapprehension did not address any further argument on matter. Though it was wrong on part of assessee to have presumed like that, but it could be unintentional mistake. result thereof has, however, been that part of assessee's contention may not have b e e n properly appreciated at time of disposal of appeal. Consequently, disposal of this matter in manner in which it has been done by Bench may leave scope for some grievance and it is desirable that parties are fully satisfied at least to extent that all their contentions have parties are fully satisfied at least to extent that all their contentions have been fully appreciated. At any rate since misunderstanding is stated to have arisen because of certain expression of opinion on my part, I don't want to stand in way of assessee to have his contention considered afresh. I am, therefore, of opinion that in interest of justice, assessee may now be given another opportunity to address further arguments on this aspect of matter. To this extent, miscellaneous petition should be allowed and matter reconsidered." It is for this reason that following point of difference has been stated by learned Members: "Whether, assessee's claim for interest or any part thereof against his dividend income ought to be considered afresh now, notwithstanding fact that it has already been rejected by order of Tribunal in main appeal? " case having been assigned by President to himself under section 255(4) of Income-tax Act, 1961 ('the Act'), matter has come up before me as Third Member. 5. Shri N.K. Poddar, learned counsel for assessee, has reiterated that learned Judicial Member made certain observations while he was on his legs. observations indicated that his client's claim was being accepted and he did not argue case in full under that impression. departmental representative has, on other hand, submitted that if counsel did not argue his client's case in full under some wrong impression it cannot be said that order of Tribunal suffered from apparent mistake. Moreover, departmental representative submits that all that could possibly be argued by counsel for assessee was argued. In any event, nothing has even now been stated as to what more arguments he would have advanced. According to him, Tribunal does not have power to review its order. learned Judicial Member has decided to give another opportunity to assessee's counsel as h e was slightly doubtful about conclusion. Otherwise, he has also categorically stated that learned counsel was not prevented by Tribunal from arguing his case. 6. I have considered rival contentions carefully. Tribunal, admittedly, does not have power to review its order. Thus, power to rectify its order under section 254(2) of Act can be assumed only where orders suffer from glaring and obvious mistakes of facts or law or both. Both learned Members are agreed that observation made, if any, was only tentative and that learned counsel was not made, if any, was only tentative and that learned counsel was not prevented from arguing his case in full. Apart from fact that there is difference between Members as to fact whether full arguments were advanced by assessee's learned counsel, not arguing case fully under some misapprehension, assuming it is correct, does not, to my mind, constitute apparent mistake on face of record so as to justify recalling of order for purpose of hearing him again. In circumstances, I am inclined to agree with learned Accountant Member that this is not fit case for recalling order. 7. order will now go to Bench for decision according to majority view. *** M.L. RAWAT v. INCOME TAX OFFICER
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