COMMISSIONER OF INCOME TAX (IT-4), MUMBAI versus M/S RELIANCE TELECOM LIMITED

Citation: [2021] 9 S.C.R. 616 · Decided: 03-12-2021 · Supreme Court of India · Bench: M.R. SHAH · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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SUPREME COURT REPORTS
[2021] 9 S.C.R.
   [2021] 9 S.C.R. 616
616
COMMISSIONER OF INCOME TAX (IT-4), MUMBAI
v.
M/S RELIANCE TELECOM LIMITED
(Civil Appeal No. 7110 of 2021)
DECEMBER 03, 2021
[M. R. SHAH AND B. V. NAGARATHNA, JJ.]
Income Tax Act, 1961: s.254(2) – Scope of – Held: In exercise
of powers under s.254(2) of the Act, the Appellate Tribunal may
amend any order passed by it under sub-section (1) of s.254 of the
Act with a view to rectifying any mistake apparent from the record
only – Therefore, the powers under s.254(2) of the Act are akin to
Or. XLVII r.1 CPC – While considering the application under s.254(2)
of the Act, the Appellate Tribunal is not required to re-visit its earlier
order and to go into detail on merits – Powers under s.254(2) of the
Act are only to rectify/correct any mistake apparent from the record
– Code of Civil Procedure, 1908 – Or. XLVII r.1.
Allowing the appeals, the Court
HELD: 1.1 The order passed by the ITAT recalling its
earlier order is beyond the scope and ambit of the powers under
Section 254(2) of the Act. While allowing the application under
Section 254(2) of the Act and recalling its earlier order, it appears
that the ITAT has re-heard the entire appeal on merits as if the
ITAT was deciding the appeal against the order passed by the
C.I.T. In exercise of powers under Section 254(2) of the Act, the
Appellate Tribunal may amend any order passed by it under sub-
section (1) of Section 254 of the Act with a view to rectifying any
mistake apparent from the record only. Therefore, the powers
under Section 254(2) of the Act are akin to Order XLVII Rule 1
CPC. [Para 3.2][619-G-H; 620-A-B]
1.2 If the Assessee was of the opinion that the order passed
by the ITAT was erroneous, either on facts or in law, in that case,
the only remedy available to the Assessee was to prefer the appeal
before the High Court, which as such was already filed by the
Assessee before the High Court, which the Assessee withdrew
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after the order passed by the ITAT recalling its earlier order.
[Para 4][620-C-E]
2. From the impugned judgment and order passed by the
High Court, it appears that the High Court has dismissed the
writ petitions by observing that (i) the Revenue itself had in detail
gone into merits of the case before the ITAT and the parties filed
detailed submissions based on which the ITAT passed its order
recalling its earlier order; (ii) the Revenue had not contended
that the ITAT had become functus officio after delivering its
original order and that if it had to relook/revisit the order, it must
be for limited purpose as permitted by Section 254(2) of the Act;
and (iii) that the merits might have been decided erroneously
but ITAT had the jurisdiction and within its powers it may pass
an erroneous order and that such objections had not been raised
before ITAT. None of the aforesaid grounds are tenable in law.
Merely because the Revenue might have in detail gone into the
merits of the case before the ITAT and merely because the parties
might have filed detailed submissions, it does not confer
jurisdiction upon the ITAT to pass the order de hors Section
254(2) of the Act. [Paras 5 and 6][620-F-H; 621-A-B]
CIVIL APPELLATE JURISDICTION : Civil Appeal No.7110 of
2021.
From the Judgment and Order dated 08.08.2017 of the High Court
of Judicature at Bombay in Writ Petition No.1432 of 2017.
With
Civil Appeal No.7111 of 2021
Balbir Singh, ASG, Zoheb Hossain, Shyam Gopal, Himanshu Satija,
Ms. Meela Patel, C. K. Sharma, Kush Chaturvedi, Raj Bahadur Yadav,
Advs. for the Appellant.
Anuj Berry, Chaitanya Safaya, Ms. Sayaree Basu Mallik, E. C.
Agrawala, Advs. for the Respondent.
The Judgment of the Court was delivered by
M. R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned common
judgment and order dated 08.08.2017 passed by the High Court of
COMMISSIONER OF INCOME TAX (IT-4), MUMBAI v. M/S
RELIANCE TELECOM LIMITED
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SUPREME COURT REPORTS
[2021] 9 S.C.R.
Judicature at Bombay in Writ Petition No. 1432/2017 and Writ Petition
No. 1406/2017, by which the High Court has dismissed the aforesaid
writ petitions preferred by the Commissioner of Income Tax (IT-4),
Mumbai (hereinafter referred to as the ‘Revenue’) and has confirmed
the order passed by the Income Tax Appellate Tribunal, Bench at Mumbai
(hereinafter referred to as the ‘ITAT’) dated 18.11.2016 passed in
Miscellaneous Application Nos. 261/M/2014 and 419/M/2013, by which
the ITAT in exerc
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