1. Heard Dr. R.S. Pande, learned counsel for appellant and Sri Alok Mathur, learned counsel for respondent.
2. This appeal under Section 260-A of Income Tax Act, 1961 (hereinafter referred to as "Act 1961") has arisen from judgment and order dated 24.05.2005 passed by Income Tax Appellate Tribunal, Lucknow Bench ''B' Lucknow (hereinafter referred to as ''Tribunal") in Income Tax Appeal no. 355/Luc/2000 for Assessment Year 1992-93. It was admitted on following substantial questions of law:-
"1. Whether in the event of defective return filed by the assessee it shall be obligatory on the part of Assessing Authority to issue a notice to the assessee inviting attention towards defect in the return under Section 139 (9) of the Income Tax Act?
2. Whether application moved under Section 154 of the Income Tax Act for rectification of the Assessment Year 1992-93 being allowed by the appellate authority could not have been set aside by the Tribunal on the ground that he does not fall within the domain of appellate authority?
3. After hearing learned counsel for parties, we find that first question with regard to Section 139(9) of Act 1961, does not arise, for the reason that Assessing Authority has not rejected Return for any defect therein and in fact the revised Return filed by Assessee on 21.01.1993 was taken and thereafter Returning Authority proceeded to make assessment by means of order dated 13.12.1994. Hence Section 139(9) has no application. Therefore, as agreed by learned counsel for both parties, we find that question 1 does not arise from impugned judgment.
4. Now coming to question 2, it is not in dispute that against Assessment Order dated 13.12.1994, Assessee preferred appeal before Commissioner which was dismissed vide order dated 22.05.1996. Thereafter Assessee filed an application under Section 154 raising large number of grounds and stating that Commissioner Income Tax (Appeal) (hereinafter referred to as ''CIT(A)) had ignored the provisions of Section 139(9) and Section 32 of Act 1961 and therefore, the findings recorded by appellate authority are not correct and in the garb of rectification, appellate authority has passed virtually a fresh order which amounts review of earlier judgment.
5. CIT(A) in fact, considering various submissions advanced by Assessee on merits, has virtually changed earlier order and now allowed appeal and directed Assessing Officer to allow assessed loss and unabsorbed depreciation to be carried forward and treat return as a valid return in absence of Section 139(9) of Act 1961 and thereby has virtually reviewed earlier assessment. This approach of CIT(A) in passing order dated 21.09.2000 under Section 154 is found patently illegal and without jurisdiction. Since in the garb of rectification of mistake, CIT(A) could not have reviewed its earlier order. Therefore, in the appeal preferred by Revenue, Tribunal has rightly allowed appeal and set aside order passed by CIT(A).
6. Scope of Section 154 has been considered in Honda Siel Power Products Ltd. Vs Commissioner of Income Tax, Delhi, (2007) 12 SCC 596 and therein Court has said and observed as under:-
"As stated above, in this case we are concerned with the application under Section 254 (2) of the 1961 Act. As state above, the expression "rectification of mistake from the record" occurs in section 154. It also finds place in section 254(2). The purpose behind enactment of section 254(2) is based on the fundamental principle that no party appearing before the Tribunal, be it an assessee or the Department, should suffer on account of any mistake committed by the Tribunal. This fundamental principle has nothing to do with the inherent powers of the Tribunal. In the present case, the Tribunal in its Order dated 10.09.2003 allowing the Rectification Application has given a finding that Samtel Color Ltd. (supra) was cited before it by the assessee but through oversight it had missed out the said judgment while dismissing the appeal filed by the assessee on the question of admissibility/allowability of the claim of the assessee for enhanced depreciation under section 43A. One of the important reasons for giving the power of rectification to the Tribunal is to see that no prejudice is caused to either of the parties appearing before it by its decision based on a mistake apparent from the record."
7. In the light of aforesaid exposition of law, it cannot be doubted that in the garb of rectification of mistake, no authority has jurisdiction to review an earlier order and pass fresh order having effect of changing order in its result and on various other aspects. This cannot be said to be a mistake apparent on the face of record. We therefore, answer question 2 against appellant-Assessee and in favour of Revenue.
8. Appeal lacks merit. It is accordingly dismissed.