LexASSISTANT COMMISSIONER, INCOME TAX, RAJKOT versus SAURASHTRA KUTCH STOCK EXCHANGE LTD.
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[2008] 13 S.C.R. 421 ASSISTANT COMMISSIONER, INCOME TAX, RAJKOT A v. SAURASHTRA KUTCH STOCK EXCHANGE LTD. (Civil Appeal No. 1171 of 2004) SEPTEMBER 15, 2008 B [C.K. THAKKER AND LOKESHWAR SINGH PANTA, JJ.] Income Tax Act, 1961: s. 254(2): c Exercise of power under- Scope of- Held: Tribunal may · rectify any mistake apparent from the record suo motu - How- ever, when assessee or Assessing Officer brings such mis- · take to the notice of tribunal, it shall exercise the power. and D rectify the mistake. Power of tribunal to rectify mistake in its order- Scope of - Non-consideration of decision of jurisdictional court by tri- bunal - Held: Is "mistake apparent from the record" which can be rectified u/s. 254(2) - Decision of jurisdictional court ren- E dered few months prior to decision of tribunal and not brought to the notice of tribunal - Thus, tribunal did not commit any error of law or of jurisdiction in rectifying mistake - Order of tribunal as upheld by High Court does not call for interference. s. 154 - Mistake apparent from the record - Rectifica- F tion - Scope of - Held: Such mistake being patent, manifest and self-evident error does not require elaborate discussion of evidence or argument to establish it - It can be corrected by issuing writ of certiorari - An error is not apparent on the face of record if one has to travel beyond the record to see G whether the judgment is correct or not - Error apparent from, ")>- the record strikes on mere looking and does not need long- drawn-out process of reasoning. 421 H 422 SUPREME COURT REPORTS [2008] 13 S.C.R. A Review- Power of- Held: Is not an inherent power - It is neither natural nor fundamental right of aggrieved party- Such power must be conferred by law - In absence thereof, the or- der cannot be reviewed - On facts, tribunal merely rectified mistake apparent from the record, thus, it was within the power 8 of tribunal. Judgment/Order: Applicability of - Retrospective or pro- spective - Held: Function of Court is not to pronounce a 'new rule' but to maintain and expound the 'old one' - If subsequent decision alters earlier decision, it does not make new law - It c only discovers the correct principle of law which has to be ap- plied retrospectively - Even where earlier decision operated for quite some time, decision rendered later on would have retrospective effect clarifying the legal position which was ear- lier not correctly understood. D Doctrine of 'prospective overruling' - object of. Respondent-assessee is a Stock Exchange. The as- sessee being a 'charitable institution', claimed exemption from payment of income-tax uls. 11 of the Income Tax Act, 1961. The Assessing Officer as also the Commissioner of E Income Tax (Appeals) rejected the claim. The Income Tax Appellate Tribunal also dismissed the appeal on 27.10.2000. The assessee then filed Miscellaneous Appli- cation uls. 254(2) of the Act on the ground that the deci- sion of the 'Jurisdictional Court'-High Court in *Hiralal F Bhagwati's case that the 'trust' was entitled to exemption from payment of tax under the Act, was not brought to the notice of the tribunal and thus, there was a "mistake apparent from record" which required rectification. The Income Tax Appellate Tribunal allowed the application holding that there was a 'mistake apparent from the G record' within the meaning of sub-section (2) of section 254 of the Act which required rectification and recalled its earlier order dated 27.10.2000. High Court upheld the or- der of the tribunal. Hence, the present appeal. H Dismissing the appeal, the Court. • ASSISTANTCCM\1NR, INCOME TAX, RAIKOTv. SAURASHTRA 423 KUTCH STOCK EXCHANGE LTD. HELD: 1.1 The plain reading of sub-section (1) of A Section 254 of the Income Tax Act, 1961 makes it more than clear that the Tribunal will pass an order after afford- ing opportunity of hearing to both the parties to appeal. Sub-section (4) expressly declares that save as otherwise ~ " provided in Section 256. (Reference), "orders passed by 8 the Appellate Tribunal on appeal shall be final". Sub-sec- tion (2) enacts that the Tribunal may at any time within four years from the date of the order rectify any mistake apparent from the record suo motu. The Tribunal shall rec- tify such mistake if it is brought to notice of the Tribunal c by the ;issessee or the Assessing Officer. Sub-section (2) thus, covers two distinct situations. So far a
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