ITAT empowered to amend its own orders triggered on account of mistake of Counsel for Parties: Delhi HC [Read Order]

The Delhi High Court held that the Income Tax Appellate Tribunal (ITAT) empowered to amend its own orders triggered on account of mistake of counsel for parties.

The petitioner, Federal Mogul Goetze (India) Limited inadvertently, failed to bring to the notice of the Tribunal, that the issues raised in respect of AO, on facts and in law, has erred in disallowing the advances written off amounting to Rs. 52,53,000 under the provisions of Section 36(2) of the Act. In doing so, the AO has failed to appreciate that such advances were given during the normal course of business and their subsequent non-recovery and consequent write-off in the books of accounts by the Appellant constituted a valid business expenditure to be allowed to the Appellant.

The division bench of Justice Rajiv Shakdher and Justice Talwant Singh the power available to the Tribunal under sub- section (2) of Section 254 of the Act is not limited to a mistake committed by the Tribunal. The amendment to the order of the Tribunal can also be made, if it is triggered on account of a mistake of the counsel for the parties.

In other words, the court held that once a mistake/error is brought to the notice of the Tribunal, which is apparent on face of record, either by the assessee or the assessing officer, the Tribunal would have the necessary power to rectify/amend its order. This power will also extend to a situation, such as the one obtained in the present case, where the petitioner’s counsel withdrew the appeal, for the reason that the issue concerning transfer pricing adjustment in respect of the assessment year in issue i.e., AY 2011-12, stood resolved.

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