Even a mistake by the assessee can be rectified - Bombay HC

The issue came up before the Hon'ble Bombay High Court in Supreme Industries Ltd. V/s. The Additional Commissioner of Income­Tax & Others.

In this matter, the petitioner while while seeking to rectify an order made a mistake by referring to incorrect orders before relevant authority. The said authority passed an order referring to the orders (incorrect) asked for. However,  when the petitioners realised their mistake filed an application for rectification/correction of the order, the Tribunal rejected the application stating that the proceeding under Section 254(2) of the Act are meant only for rectifying mistakes apparent from the record committed by the Tribunal and not  the mistake of the parties concerned. The petitioners appealed against the said order.

Held by the High Court:

(i) It is a settled position in law that every authority exercising quasi judicial powers has inherent/ incidental power in discharging of its functions to ensure that justice is done between parties i.e. no prejudice is caused to any of the parties. This power has not to be traced to any provision of the Act but inheres in every quasi judicial authority. This has been so held by the Supreme Court in Grindlays Bank Ltd. v/s. Central Government Industrial Tribunal 1980 SCC 420. Therefore, the aforesaid principle of law should have been adopted by the Tribunal. It is expected from the Tribunal to adopt a justice oriented approach and not defeat the legitimate rights on the altar of procedures and technicalities. This is particularly so when there is no specific bar in the Act to correct an order passed on rectification.

(ii) It is fundamental principle of law that no party should be prejudiced on account of any mistake in the order of the Tribunal. Though not necessary for the disposal of this Petition, we express our disapproval of the stand taken in the impugned order that Section 254(2) of the Act are meant only for rectifying the mistakes of the Tribunal and not of the parties. The Tribunal and the parties are not adversarial to each other. In fact, the Tribunal and the parties normally represented by Advocates/ Chartered Accountants are comrades in arms to achieve justice. Therefore, a mistake from any source be it the parties or the Tribunal so long as it becomes a part of the record, would require examination by the Tribunal under Section 254(2) of the Act. It cannot be dismissed at the threshold on the above ground.