IT : Where at time of disposing of issue relating to bad debts, Tribunal inadvertently failed to consider applicability of order passed by Supreme Court on similar issue to assessee's case, it was justified in recalling its earlier order for limited purpose of reconsideration of said aspect of case
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[2013] 33 taxmann.com 487 (Gujarat)
HIGH COURT OF GUJARAT
Deputy Commissioner of Income-tax, Circle 1(1)
v.
Daniel Measurement & Controls (India) (P.) Ltd.*
AKIL KURESHI AND MS. SONIA GOKANI, JJ.
TAX APPEAL NO. 860 OF 2012†
MARCH 4, 2013
Section 254 of the Income-tax Act, 1961 - Appellate Tribunal - Power of Rectification [Power to recall] - Tribunal passed an order in appellate proceedings in respect of assessee's claim for bad debts - Subsequently, assessee filed miscellaneous civil application wherein one of grounds raised was that since decision of Supreme Court rendered in case of TRF (T.R.F.) Ltd. v. CIT [2010] 190 Taxman 391 was not considered while deciding matter, there was an error apparent on face of record which required interference - Tribunal having noted that inadvertently such decision could not be considered at time of deciding appeal on merit, directed hearing of issue once again - Tribunal thus recalled its order for a limited purpose of deciding such issue - Whether since applicability of ratio of order passed by Supreme Court to facts of assessee's case was yet to be decided, Tribunal was perfectly justified in recalling its earlier order - Held, yes [In favour of assessee]
CASES REFERRED TO
TRF. Ltd v. CIT [2010] 323 ITR 397/190 Taxman 391 (SC) (para 2) Asstt. CIT v. Saurashtra Kutch Stock Exchange Ltd. [2005] 305 ITR 227/173 Taxman 322 (SC) (para 2).
K.M. Parikh for the Appellant.
ORDER
Ms. Sonia Gokani, J. - Challenging order of the Income Tax Appellate Tribunal dated 22.06.2012, following substantial questions of law have been proposed:
"A. Whether the impugned decision of the Hon'ble Appellate Tribunal amount to reversing the entire decision which was decided on merit after considering the existing law in this regard?
B. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal has erred in law in recalling its earlier order to examine it again in the light of the Hon'ble Supreme Court decision in the case of TRF Ltd. v. CIT (2010) 323 ITR 397 when ratio of that decision is not applicable to facts of this case and further, there cannot be any presumption that earlier Bench had not considered the decision?"
2. We have heard learned counsel Mr. K.M. Parikh, who has fervently made his submissions that, the Tribunal has wrongly exercised the powers when the matter was already decided on the merits. The Tribunal could not have applied the decision of (T.R.F.) Ltd. v. CIT [2010] 323 ITR 397/190 Taxman 391 (SC). He further urged that the said ratio would be applicable only in the case, where the bad debts become irrevocable, whereas, in the instant case, as could be noted from the record, the assessee had continuous business dealing with Gujarat Chemical Port Terminal Co. Ltd. (for short 'GCPTCL') in the past, and in future and therefore, the bad debts could not have been written off, as claimed by the assessee. He also has relied upon the decision of Apex Court in case of Asstt. CIT v. Saurashtra Kutch Stock Exchange Ltd. [2008] 305 ITR 227/173 Taxman 322 highlighting the scope of 'jurisdiction in case of rectification of the mistake and stated that on account of such ratio, there is no need for any interference.
3. We can notice from the decision that revenue had filed appeal against the order of the CIT(A) where, six grounds of appeal were raised and all were considered by the Tribunal. Subsequently, the assessee had filed misc. civil application and one of the grounds raised was that the decision of Supreme Court rendered in case of TRF(T.R.F.) Ltd (supra) was not considered and, therefore, there was an error apparent on the face of the record which requires interference.
4. The Tribunal, having noted that inadvertently such decision could not be considered at the time of deciding the appeal on merit, had directed the hearing of the issue once again and, therefore, recalled its order for a limited purpose of deciding such issue only to that extent. Such recall is to be operated.
5. We see no error in the approach of the Tribunal as in case of TRF(T.R.F.) Ltd (supra) the Apex Court has made it clear inter alia that it is not necessary for the assessee to establish any more that the debt has become irrevocable after 01.04.1989. It would be sufficient for him to write off the debt as irrevocable in his account. Such being a ratio of the Apex Court when it was not noticed by the Tribunal it chose to recall its earlier order. In the instant case, Tribunal is yet to decide the entire aspect on merits. It has merely directed the office to to refix the hearing on the question whether the ratio would be applicable to the case of assessee. As applicability of ratio to the facts is yet to be decided by the Tribunal and when it was perfectly justified in recalling the order for not having considered such ratio! at the time of deciding the entire case on merits, we see no reason to entertain this appeal as it does not give rise to any substantial question of law. The same is, therefore, dismissed.
SUNILRegards
Prarthana Jalan
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