Law:

Section:

Section 254 of the Income-tax Act, 1961 - Appellate Tribunal - Powers of - Assessment year 1973-74 - Whether in absence of any specific power conferred by statute or inferred by implication, Tribunal constituted under Act cannot exercise any power of review - Held, yes - Whether, however, if facts of a particular case have been recorded incorrectly or some error has crept in, which does not require any debate and is apparent on record, such a mistake can be corrected in exercise of powers conferred under section 254(2) - Held, yes FACTS The assessee-firm claimed certain revenue expenses incurred during the assessment year 1973-74. The ITO, however, treated the same as capital expenditure on the ground that the facts were exactly similar to those pertaining to its earlier assessment year and the Tribunal had upheld the addition made by the department in that year. On appeal, before the first appellate authority (AAC), the assessee contended that the system fol- lowed by it was such that whatever purchases were made were claimed as revenue expenses although they might not be utilized in the same year; however, as and when, required, they were taken out from the stores and used and that the unconsumed stocks were not shown in the closing stock, even if they were not used. The AAC, however, following the finding of the Tribunal in earlier years, sustained the addition. On second appeal, the Tribunal also upheld the impugned addition. On miscellaneous application filed by the assessee, the Tribunal recalled its aforesaid order, and after hearing the parties, corrected certain factual inaccuracy in respect of a particular addition. On reference : HELD It is now well-settled that in the absence of any specific power conferred by the statute or inferred by implication, the Tribunal which has been constituted under the Act cannot exercise any power of review. No such power can be inferred by implication nor there is any specific provision in the Act providing for review. However, if an error falls within the provisions of section 254(2), then surely the Tribunal can exercise the power conferred under the said Act and rectify its mistake. It is further well-settled that,…

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