Principal Commissioner of Income-tax -1 v. Chartered Logistics Limited
[Citation -2017-LL-0830-3]

Citation 2017-LL-0830-3
Appellant Name Principal Commissioner of Income-tax -1
Respondent Name Chartered Logistics Limited
Court HIGH COURT OF GUJARAT AT AHMEDABAD
Relevant Act Income-tax
Date of Order 30/08/2017
Judgment View Judgment
Keyword Tags application for rectification • rectification application • specific provision
Bot Summary: The Tribunal disposed of the said appeal by an order dated 8.11.2013 where the contentious issue was with respect to addition made by the Assessing Officer under section 40(a) of the Income Tax Act( the Act for short). 2013.The instant miscellaneous applications are arising out of the very same order of the Tribunal. As on date operative order is of the Hon'ble High Court and not of the Tribunal, therefore the Miscellaneous Applications have become Page 2 of 6 HC-NIC Page 2 of 6 Created On Fri Sep 01 09:59:53 IST 2017 C/SCA/12439/2017 JUDGMENT infructuous and accordingly the same are dismissed. Application No.78/2015 before the Tribunal and contended that in the order dated 13.5.2015, an obvious error has crept in when the Tribunal recorded that the High Court has passed order on appeals filed by the Revenue from which the Misc. The department has thereupon filed this petition in which challenge is both to the first order dated 13.5.2015 passed by the Tribunal in in the first rectification application as well as later order dated 13.10.2016 passed in subsequent rectification application of the department. Having heard learned advocates for the parties what emerges as an undisputable position is that in the order dated 13.5.2015 dismissing the department's rectification applications, the department had made an erroneous reference to the order of the High Court in Revenue's tax appeals concerning the subject matter at hand. If the Tribunal had proceeded on factual basis which was wholly and concededly erroneous, the Tribunal perhaps even in absence of specific provision of sub section(2) of section 254, had the power to recall the order.


C/SCA/12439/2017 JUDGMENT IN HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION NO. 12439 of 2017 With SPECIAL CIVIL APPLICATION NO. 12441 of 2017 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE AKIL KURESHI and HONOURABLE MR.JUSTICE BIREN VAISHNAV 1 Whether Reporters of Local Papers may be allowed to see judgment ? 2 To be referred to Reporter or not ? 3 Whether their Lordships wish to see fair copy of judgment ? 4 Whether this case involves substantial question of law as to interpretation of Constitution of India or any order made thereunder? PRINCIPAL COMMISSIONER OF INCOME TAX -1 Petitioner(s) Versus CHARTERED LOGISTICS LIMITED Respondent(s) Appearance: MRS MAUNA M BHATT, ADVOCATE for Petitioner(s) No. 1 MS VAIBHAVI K PARIKH, ADVOCATE for Respondent(s) No. 1 CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI and HONOURABLE MR.JUSTICE BIREN VAISHNAV Page 1 of 6 HC-NIC Page 1 of 6 Created On Fri Sep 01 09:59:53 IST 2017 C/SCA/12439/2017 JUDGMENT Date : 30/08/2017 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. facts being common, we may note facts from Special Civil Application No.12439/2017. This petition is filed by income tax department in following background. 2. income tax department had filed appeal bearing ITA No.35/2013 before Income Tax Appellate Tribunal. Tribunal disposed of said appeal by order dated 8.11.2013 where contentious issue was with respect to addition made by Assessing Officer under section 40(a) (ia) of Income Tax Act( Act for short). department perceiving that while passing said order, error apparent on face of record had been committed, filed Misc. Application No. 101/2014. This application was dismissed by Tribunal by order dated 13.5.2015 observing as under : We find that revenue has filed appeal before Hon'ble Gujarat High Court against order dated 8 11 2013 passed in IT(SS) Nos 35 & 36?Ahd.2013.The instant miscellaneous applications are arising out of very same order of Tribunal. We further find that Hon'ble High Court has already passed order on 3 March 2015 in tax appeals numbers 126 and 127 of 2015 in respect of appeals so filed by revenue. Thus order of Tribunal has already merged with order of Hon'ble High Court. As on date operative order is of Hon'ble High Court and not of Tribunal, therefore Miscellaneous Applications have become Page 2 of 6 HC-NIC Page 2 of 6 Created On Fri Sep 01 09:59:53 IST 2017 C/SCA/12439/2017 JUDGMENT infructuous and accordingly same are dismissed. In result, both Misc. Applications filed by Revenue are dismissed. 3. department has thereupon filed fresh Misc. Application No.78/2015 before Tribunal and contended that in order dated 13.5.2015, obvious error has crept in when Tribunal recorded that High Court has passed order on appeals filed by Revenue from which Misc. Application arise. In view of this order of Tribunal has merged with that of High Court and therefore, rectification application had become infructuous. This application of department came to be dismissed by Tribunal by order dated 13.10.2016 in which Tribunal held that application for rectification to correct order passed by Tribunal in rectification application would not be maintainable. department has thereupon filed this petition in which challenge is both to first order dated 13.5.2015 passed by Tribunal in in first rectification application as well as later order dated 13.10.2016 passed in subsequent rectification application of department. 4. Having heard learned advocates for parties what emerges as undisputable position is that in order dated 13.5.2015 dismissing department's rectification applications, department had made erroneous reference to order of High Court in Revenue's tax appeals concerning subject matter at hand. It appears that though department had filed appeals before High Court, these appeals did not concern issue which Page 3 of 6 HC-NIC Page 3 of 6 Created On Fri Sep 01 09:59:53 IST 2017 C/SCA/12439/2017 JUDGMENT Tribunal had decided in department's appeals in case of respondent assessee. Tribunal therefore, erroneously concluded that order of Tribunal having merged with that of High Court, Misc. Applications for rectification were rendered infructuous. We have proceeded on such basis. 5. In context of such facts, we may examine department's challenge. Learned counsel Shri Himani for assessee contended that powers of rectification of Tribunal flowing from sub section(2) of section 254 of Act, can be exercised only for rectification of order passed under sub section(1) of section 254. In other words, according to counsel only on original order in appeal passed by Tribunal, can power of rectification be exercised in terms of sub section(2) of section 254. He relied on plain language used in said sub section. 6. We do not intend to give final answer to this question in present petition though prima facie it may appear that even without any specific powers under statute, for example, as referred to in sub section(2) of section 254 for rectification, it would appear that any judicial or quasi judicial authority would have inherent powers to correct error which is plainly that of clerical, typographical, arithmetical or factual. If Tribunal had proceeded on factual basis which was wholly and concededly erroneous, Tribunal perhaps even in absence of specific provision of sub section(2) of section 254, had power to recall order. However it is not necessary to elaborate this issue any further since department has challenged not only Page 4 of 6 HC-NIC Page 4 of 6 Created On Fri Sep 01 09:59:53 IST 2017 C/SCA/12439/2017 JUDGMENT subsequent order of Tribunal dated 13.10.2016 but also original order dated 13.5.2015 which in any case is subject to examination in exercise of writ jurisdiction by this Court and is challenged before us. When we find that Tribunal's order dated 13.5.2015 was passed on clearly incorrect factual premise and such factual premise being very foundation of order, such order must be set aside and is accordingly set aside. 7. Facts being identical in both petitions, both petitions are allowed. Tribunal's order dated 13.5.2015 is quashed. Department's rectification applications being Misc. Applications No. 101/2014 and 102/2014 are revived and shall be decided by Tribunal afresh after hearing both sides. Consequently, order dated 13.10.2016 is rendered infructuous. Petitions are disposed of. 8. Before closing we may record that we have not examined contention of Shri Himani that in any case, tax effect in appeals being below minimum threshold level, same cannot be persuaded by department on merits. We leave it open for Tribunal to examine such contention, if so raised in revived rectification applications. (AKIL KURESHI, J.) Page 5 of 6 HC-NIC Page 5 of 6 Created On Fri Sep 01 09:59:53 IST 2017 C/SCA/12439/2017 JUDGMENT (BIREN VAISHNAV, J.) raghu Page 6 of 6 HC-NIC Page 6 of 6 Created On Fri Sep 01 09:59:53 IST 2017 Principal Commissioner of Income-tax -1 v. Chartered Logistics Limited
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