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Applicability of section 40A(3) to "book adjustment"

Started by murali Krishnamurthy, October 19, 2008, 06:28:42 PM

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murali Krishnamurthy

The Hon'ble Bench ITAT did not consider the decision of a co-ordinate bench and passed an order. Can such an 
order be recalled as there was a mistake apparent from record? Kindly give considered opinion with relevant case
as soon as possible, since the case is posted for hearing on the coming Friday.

CA Murali 


The question whether non-consideration of a co-ordinate bench judgement constitutes a mistake apparant from the record is covered by the judgement of the SC in Honda Siel 295 ITR 466. The Court held:

"Non-consideration of a decision of co-ordinate Bench placed before the Tribunal amounts to mistake apparent from record within the meaning of s. 254(2); Tribunal was therefore justified in exercising its powers under s. 254(2) when it was pointed out that an order of the co-ordinate Bench placed before the Tribunal was not considered by it while passing the original order."

On a side note, it may be noted that an order which does not consider a coordinate bench judgement is "per incuriam" and of no binding judgement. The entire law on this is nicely summed up by the Hyd and Bom benches in the following judgements:

Mangal Dayak Chit Fund 92 ITD 258 (Hyd)
Mehratex India Ltd (2005) 3 SOT 539 (Mumbai)
JKT Fabrics (2005) 4 SOT 84 (Mumbai)

..Hope this helps.