Facts

The appellant claimed that it had filed two paper books, Paper Book – I and Paper  Book – II during the appellate proceedings before the Tribunal.  Paper  Book   I contained Page Nos. 1 to 40 and the Paper book – II contained Page Nos. 1 to

90. There was no dispute about the paper book I being available on records. Paper book II, as per the claim of the assessee, was filed during the course of the hearing before the Tribunal. First part of Paper Book II i.e. Page Nos. 1 to 6 was containing the order of the Tribunal in the first round of hearings, vide  which the matter was set aside to the assessing officer. Part – 2 of the Paper Book II contained another set of papers from Sr.  No. 1 to 90. This contained the paper  book filed before the CIT (A) in the fresh round of litigation, which the CIT (A)   had not admitted. The Tribunal passed order dated 12th October, 2012. In the order of the Tribunal none of the papers contained in the Paper Book I or Paper Book II were referred to.

The assessee filed a Miscellaneous Application u/s. 254(2) of the Act and claimed that there was a mistake apparent from the records in as much as the documents filed vide both the Paper Books have not been considered. The said Miscellaneous Application was decided vide order dated 12th May, 2015. Vide this order, the Tribunal accepted the fact that the Paper book I was filed/tendered during the hearing, leading to the order dated 12th October, 2012. However, it is an admitted position that the document referred to in Paper book I, would have no bearing       to the result arrived at, in the order dated 12th October, 2012 passed in appeal.     So far as Paper book II was concerned, the Tribunal observed that no such compilation had been filed before it during hearing, leading to the order dated   12th October, 2012. In view of this, the Miscellaneous Application of the assessee was dismissed.

The assessee filed a  writ petition before the Hon. Bombay High Court against  the order of the Tribunal dated 12th May, 2015 dismissing the Miscellaneous Application. Before the Bombay High Court, the Registrar of the Tribunal filed      an affidavit stating that on verification of the record, it is found that there was   one compilation of Paper book I containing 40 pages and there was another compilation viz: Paper book II containing 6 pages, namely order of the Tribunal

dated 25th April, 2006 passed in respect of Assessment Year  1996-97. On oath,   the affidavit stated that no other documents/Paper book is available in the record   of the case with the Tribunal. The assessee also filed an affidavit of director      of the assessee company. This affidavit had as an annexure a communication from the advocate who appeared for the petitioner in the appeal proceedings. Both these documents inter alia stated that the compilation of documents (Paper book II) was filed on 22-9-2012. However, the advocate in his communication had neither categorically stated the number of pages which Paper  Book II contained  nor did it state that the second paper book was in two parts i.e. from Page  1 to        6 and another from Page  No. 1 to 90. The Index to the second paper book also     did not make any reference of documents being filed along with it, containing compilation of pages 1 to 90, which were sought to have been filed before the CIT(A). Considering these factors, the Bombay High Court held that there was no fault of the Tribunal in rejecting the assessee’s rectification application specially taking into account the conduct of the assessee. The High Court inter alia held   that the proceedings for rectification are not a proceeding to recall so as to have   the matter reheard on merits by relying upon the evidence which were never produced before the Tribunal. [Nisha Synthetics Ltd. v. ITAT and Others (2017) 145 DTR 346 (Bom)]. The assessee filed a Civil Appeal before the Supreme Court against the order of the Hon. Bombay High Court.

Issue

The issue before the Hon. Supreme Court was whether the Tribunal had committed a mistake apparent from record in  not  considering the  documents in the paper books filed while deciding the appeal and hence the order of the Tribunal was subject to rectification u/s. 254(2) of the Act.

Views

Before the Supreme Court, the assessee submitted that even on the materials admitted to have been filed before the ITAT  i.e. Paper Book I containing Page  Nos.    1 to 40, the appellant can make out its case which has been admittedly filed by    the assessee, though notas claimed by the assessee before the High Court.

Held

The Supreme Court held that even going by the records which were found to have been received by the Tribunal, the Tribunal couldhave been directed to consider the case of the appellant.

The Supreme Court, therefore, directed the Income Tax Appellate Tribunal, to hear the appeal of the appellant afresh on the basis of the documents, which  have already been found to be filed by the appellant. The Supreme Court also clarified that the order passed bythe High Court shall not stand in the way of

the Tribunal in passing the orders. (CA No. 10236 of 2016 (S.L.P.(C) No. 29739 of 2016 dt. 21-10-2016)

Editorial : The judgment of the Bombay High Court in Nisha Synthetics Ltd. v. ITAT  & Ors (supra) is set aside. Also refer CCE Coimbatore v.  Kwality Fun  Foods    & Restaurant P. Ltd. (2010) 259 ELT 641 (SC), where the Tribunal had failed to advert even to the basic facts and disposed of the appeals in a summary manner, the order of the Tribunal was set-aside and remitted forfresh consideration

“In prayer it is better to have a heart without words than words without a heart.”

– Mahatma Gandhi