R. W. Promotions P. Ltd vs. ITAT (Bombay High Court)

The assessee filed an appeal u/s 260A to the High Court against the order of the Tribunal. During the pendency of the appeal, the assessee filed a Miscellaneous Application (MA) before the Tribunal u/s 254(2) to request it to rectify certain mistakes apparant from the record. The Tribunal dismissed the MA on the ground that “judicial propriety does not allow the assessee to seek efficacious remedy simultaneously before two authorities and in particular where the issue is seized by a higher judicial forum, even if pending admission”. On a Writ Petition filed by the assessee to challenge the order of the Tribunal dismissing the MA, HELD by the High Court:

The least that can be said about the understanding of the legal provision by the Tribunal is that it is ex facie incorrect and erroneous. Merely because the assessee has challenged the order of the Tribunal in an Appeal under section 260A of the Income Tax Act, 1961 before the High Court does not mean that the power under section (2) of section 254 cannot be invoked either by the assessee or by the revenue/Assessing Officer. Such a power enables the Tribunal to rectify any mistake apparent from the record and make amendments. That in a given case would not only save precious judicial time of the Tribunal but even of the higher Court. Only when the assessee or the Assessing Officer calls upon the Tribunal to undertake an exercise which is not permissible within the meaning of section (2) of section 254 that the Tribunal can rely on the principle of judicial propriety or its reluctance or refusal to take upon itself the powers of the higher Court of Appeal. We can understand if the Tribunal had passed an order after considering the application made by the petitioner-assessee on its merits and in accordance with law. However, the refusal of the Tribunal to go ahead and reject the application only on the ground that the petitioner-assessee has invoked the appellate powers of higher Court cannot be sustained. That is contrary to the plain language of the two statutory provisions and which have been brought to our notice. Nothing contrary having been pointed out and such a view of the Tribunal may affect and prejudicially the interest of the revenue that all the more we cannot sustain the impugned order. The Writ Petition is allowed. The petitioner’s misc. application seeking to invoke the powers under subsection (2) of section 254 of the Income Tax Act, 1961 shall now be heard by the Tribunal and it shall be decided in accordance with law.