JUDGMENT A.P. Misra, J.
1. This writ petition challenges the orders dated May 14, 1990, and October 29, 1990 (annexures-1 and 2 to the writ petition), passed by the Income-tax Appellate Tribunal, Delhi Bench 'SMC', New Delhi (respondent No. 2), for the assessment year 1982-83 and further directing the said respondent to dispose of the petitioner's application under Section 254(2) of the Income-tax Act, 1961. During the pendency of the writ petition, the order was passed by respondent No. 2 on the petitioner's application under Section 254(2) of the Act on June 23, 1994, the petitioner further seeks quashing of the same, which is annexed as annexure SA-2 to the supplementary affidavit.
2. The brief facts are, the petitioner started selling her agricultural land in plots from the assessment year 1976-77 and continued to sell up to the assessment year 1982-83. The Income-tax Officer initially treated the sale of plots as an adventure in the nature of trade/business as against capital gain claimed by the assessed. This issue was finally decided by the Income-tax Appellate Tribunal by its order dated July 9, 1984, holding the sale of plots as business activity and not capital gain and directed for adoption of land at the rate of Rs. 17 per sq. yard as its initial cost. Similar direction was issued in the appeals for the assessment years 1977-78 to 1980-81.
3. However, for the assessment year 1982-83, to which the present petition relates, the Income-tax Officer, while passing the assessment order dated January 28, 1984, under Section 143(3) of the Act, followed the land value at Rs. 12 instead of Rs. 17 basing this order following the orders passed for the previous years. For the year 1981-82, as after passing the assessment order the aforesaid Income-tax Appellate Tribunal had made an order relating to the price of the land fixing at Rs. 17 per sq. yard, the Income-tax Officer fallowing the direction of the Tribunal treated the value of the land at Rs. 17 per sq. yard and revised the assessment. After the aforesaid decision of the Tribunal, the petitioner moved an application on January 10, 1985, under Section 154 of the Act requesting for the refund by taking the land value at Rs. 17 per sq. yard as adopted in the past years, namely, from 1977-78 to 1981-82. This application was rejected on July 21, 1987, holding that when the assessment order was passed by the Income-tax Officer, the Tribunal, although was not in existence, hence no question of following the same. Aggrieved against that, the appeal was preferred, which was allowed by the Appellate Assistant Commissioner holding that the mistake should be treated as a mistake apparent on the face of the record. Against this, the Department preferred second appeal before respondent No. 2. The Tribunal allowed the Department's appeal by order dated May 14, 1980 (impugned). Thereafter the petitioner moved an application before respondent No. 2 under Section 254(2) on September 24, 1990, for rectifying the said order. The Tribunal passed a one line order "no hearing" on October 29, 1990, which is also impugned. On April 9, 1991, again a request was made to respondent No. 2 to hear and decide the application under Section 254(2) on the merits. Thereafter through a supplementary affidavit it is averred that on June 23, 1994, the Tribunal passed an order dismissing the aforesaid application of the petitioner, which has been annexed as annexure SA-2 to the supplementary affidavit.
4. From the aforesaid facts, it is clear and has not been doubted on behalf of the Revenue that for the assessment years 1977-78 to 1981-82 the same point and the same question were involved as has been raised for the year 1982-83 in the present case. However, the argument is, the respondent authority, though accepting the rate of land at Rs. 17 per sq. yard for the earlier assessment year, has not rectified the mistake for the year 1982-83 on the same pattern. On January 28, 1994, the assessing authority, as aforesaid, fixed the rate at Rs. 12 per sq. yard for the assessment year 1982-83. Then on October 29, 1984, for the assessment years 1977-78 to 1980-81, the Tribunal under Section 254(2) rectified the earlier order by placing the rate at Rs. 17 in place of Rs. 12 per sq. yard. Thereafter, the petitioner on January 10, 1985, filed application under Section 154 before the Income-tax Officer for the assessment year 1982-83, who rejected the same for rectifying the value at Rs. 17 per sq. yard in place of Rs. 12. Then on December 16, 1987, the Appellate Assistant Commissioner allowed the appeal against the Department. The Department filed an appeal before the Tribunal, which stood allowed on May 14, 1990, by the Tribunal. Thereafter the aforesaid application under Section 254(2) for rectification was made.
5. The only point pressed before us is whether rejection of the application of the petitioner for rectification of the mistake for the year 1982-83 is sustainable or not ? The argument on behalf of the petitioner is, it is mistake apparent on the face of the record and respondent No. 2 refusing to rectify has committed an illegality.
6. On behalf of the Revenue, the contention is :
Firstly, as petitioner did not prefer an appeal against the assessment order dated January 28, 1984, passed under Section 143(3) for the year in question, thus the present application for rectification is not maintainable as the assessment order, in law, has become final, Secondly, only on account of the subsequent decision of the Tribunal would not be a ground for rectification to be classified as mistake which is apparent on the face of the record within the meaning both under Sections 154 and 254 of the Act.
7. For the respondents reliance is placed on CIT v. Jagabandhu Roul [1984] 145 ITR 153 (Orissa). This decision held that the Appellate Tribunal does not have the power of review. What has been given under Section 254 of the Income-tax Act, 1961, is the right of rectification of mistakes. The power of review has to be statutorily conferred. In this case for the assessment years 1971-72 and 1972-73, the Inspecting Assistant Commissioner imposed penalty. The Tribunal upheld the order. Thereafter, the assessee filed an application under Section 254(2) on the ground that the ratio of the decision of the High Court in CIT v. Dhadi Sahu [1976] 105 ITR 56 (Orissa) was not applied by the Tribunal while disposing of the appeals. On these facts, the court held (headnote) : "that no reference had been made by the Tribunal, while disposing of the appeal, to Dhadi Sahu's case [1976] 105 ITR 56 (Orissa), because the same had not been placed before it for consideration and when the assessee filed an application before the Tribunal to review its decision".
8. By applying the principle in Dhadi Sahu's case, [1976] 105 ITR 56 (Orissa), it was not an application for rectification under Section 254(2), but was in fact one for review.
9. The facts of this case are different from the present one. In that case, the decision was not even placed for consideration, while in the present case, the decision of the Tribunal for earlier assessment year was for rectifying its order under Section 254(2), which was made on October 29, 1984.
10. Next reliance is placed on ITO v. ITAT [1987] 168 ITR 809 (Raj). In this case, the Tribunal dismissed an appeal filed by respondent No. 2. The said respondent moved an application under Section 254(2). The Tribunal, thereafter by order allowed the application on the ground, the original order did contain mistake and thereby conclusion drawn was wrong. It was further observed that since the other member was not a party to the original order, the order was recalled and the matter was ordered to be disposed of afresh. It is on these facts it is held that Section 254(2) does not empower the Tribunal to review its own order under the garb of rectification. Again the facts of this case are also different from the facts of the present case.
11. In Narain Chemical Industries v. STO [1970] UPTC 605 (All), while dealing with Section 22 of the U. P. Sales Tax Act, which is also for rectification of the mistake, it was held that the declaration of law made by this court if it comes into existence after the original assessment order has been passed, then error in the levy of tax, which was subsequently held to be inoperative and ineffective could be rectified on the ground that there was a mistake apparent on the face of the record.
12. In this case for the assessment years 1964-65, 1965-66 and 1966-67, the petitioner was assessed to tax on its turnover of sodium silicate at two per cent. Later three notices under Section 21 of the Sales Tax Act were issued to which replies were filed. On it the said notices were cancelled. Later notice under Section 22 of the Act was issued for rectification of mistake and applying rate of tax. On these facts, it was held :
"It is true that the declaration of law made by this court came into existence after the original assessment order had been passed but that is of a consequence. In Walchand Nagar Industries Ltd. v. V.S. Gaitonde, ITO. [1962] 44 ITR 260, the Maharashtra High Court held that the levy of tax under a statutory provision which was subsequently held to be inoperative and ineffective could be rectified on the ground that there was a mistake apparent on the face of the record."
13. In Ram Singh and Sons Engineering Works v. State of U. P. [1977] UPTC 74 (All), which was again a case under Section 22 of the U. P. Sales Tax Act, In this case assessment orders were passed treating the transaction as a works contract. Subsequently, similar transactions of the assessee in the earlier order were declared by the High Court as sales liable to tax. This led to rectification proceedings on the basis of this later judgment of the High Court. It was held that it is a mistake apparent on the face of the record and such rectification could be made under this section. This case, in fact, relied on the aforesaid case of Narain Chemical Industries [1970] UPTC 605 (All).
14. The facts of the present case are not only based on declaration of law which came into existence later, but, in fact it is for the same assessee for the same piece of land. For the earlier assessment years, namely, 1977-78 to 1979-80, the rate of land was rectified under this very section, namely, Section 254(2), by the Tribunal by rectifying from Rs. 12 per sq. yard to Rs. 17, which the petitioner is seeking in this year, namely, 1982-83, which has been rejected. The contention for the Department first that as no appeal was filed against the original assessment order, namely, order dated January 28, 1984, hence, no rectification could he made, is devoid of any merit. A rectification order would not depend on an order passed which has become final, if it is an error apparent on the face of the record and if it is a case within the sphere which is a mistake apparent on the face of the record, then the finality of the order would not restrict the exercise of this power of rectification. If there is a mistake apparent on the face of the record that could always be corrected, exercising the powers given to an authority for rectification under a statute. It is further significant that the order which stood rectified for earlier assessment order was passed by the Tribunal on October 29, 1984, which admittedly is subsequent to the order of assessment and thereafter when the petitioner applied for rectification, refusal to rectify such a mistake, which is apparent on the face of the record, cannot be justified. The rate of the very land, which is rectified for earlier assessment years held to be Rs. 17 per sq. yard, but for the subsequent year 1982-83 in question if it is not rectified it would mean that the rate of value of the land for 1982-83 is to be less and more for 1977-78 to 1981-82. Of course, this would be a mistake apparent on the face of the record.
15. Accordingly, the writ petition succeeds and is allowed with costs. The impugned order dated June 23, 1994 (annexures SA-2 to the supplementary affidavit), passed on the petitioner's application dated September 24, 1990, under Section 254(2) of the Income-tax Act is hereby set aside. The Tribunal is directed to pass a fresh order in the light of the observations made above on the said application of the petitioner.