Visvas Promoters vs. ITAT (Madras High Court)

DATE: (Date of pronouncement)
DATE: October 12, 2009 (Date of publication)

Click here to download the judgement (visvas_promotors_non_consideration_of_judgement.pdf)

Non-reference by ITAT of cited judgements is not an apparent mistake

The assessee claimed deduction u/s 80-IB (10) which was rejected by the AO but allowed by the CIT (A). On appeal by the department, the Tribunal ruled against the assessee and held that it was not eligible for deduction. The assessee filed a MA u/s 254 (2) pointing out that it had cited a judgement of the Kolkota Bench of the Tribunal (which had been considered by the CIT (A)) and a judgement of the Kolkota High Court which had not been considered by the Tribunal when deciding the appeal and the same was a ‘mistake apparent from the record’. The MA was rejected on the ground that the issue was discussed and there was no mistake. To challenge the MA order a writ was filed by the assessee urging that the Tribunal ought to have recalled the appeal order and reheard the appeal. HELD dismissing the Petition:

(i) The writ petition against the MA order was maintainable because the assessee has no alternative remedy. An appeal u/s 260A can be filed only against an order passed u/s 254 (1) and not against one passed u/s 254 (2);

(ii) On merits, even though it was true that in the original order the Tribunal had not referred to the order of co-ordinate Bench of the Kolkata Tribunal and the subsequent decision of the Calcutta High Court, the substance of the same has been discussed in detail. The assessee had a right of appeal and therefore the application for rectification u/s 254(2) was misconceived;

(iii) A decision of the High Court of different jurisdiction is not binding on the Tribunal. Non-consideration of the same is not a “mistake” u/s 254 (2).


(a) In Honda Siel 295 ITR 466 (SC), it was held that omission by the Tribunal to refer to the judgement of a co-ordinate Bench was an “apparent mistake” u/s 254 (2);

(b) In Godavari Devi Saraf 113 ITR 589 (Bom) and Highway Construction 217 ITR 234, 240 (Gau), it was held that the Tribunal had to follow the law laid down by a non-jurisdictional High Court where there is no judgement of a jurisdictional Court;

(c) In Paras Laminates 186 ITR 722 (SC) it was held that a Bench of the Tribunal could not lightly disregard the decision of a co-ordinate Bench on an identical question;

(d) In Shivsagar Veg Estate 220 CTR 563 (Bom) and Naresh Pahuja (Bom) it was held that non-consideration of cited judgements showed non-application of mind;

(e) See also the Guidelines issued by the Hon’ble President to the Hon’ble Members for drafting orders.