COMMISSIONER OF INCOME TAX Vs. AISHWARYA TRADING CO.

JUDGEMENT

(1.) THIS appeal is filed against the order issued by the Tribunal refusing to entertain a rectification application filed by the revenue under Section 254(2) of the Income Tax Act to rectify the order issued by the Tribunal in an earlier rectification application filed by the assessee to rectify the very same appellate order.

(2.) WE have heard Standing Counsel appearing for the appellant and Advocate Sri. A. Kumar appearing for the respondent assessee.

(3.) AFTER hearing both sides and after going through the appellate order, we are of the view that the second application on the very same issue is not maintainable before the Tribunal. In fact, merger applies only on issues decided in rectification proceedings and the Tribunal's order issued under Section 254(1) will remain unaffected on all matters other than those covered by the rectification order issued under Section 254(2). In other words, even after the Tribunal rectifies the appellate order under Section 254(2) on any issue raised, still the original order can be rectified on any other issue decided by the Tribunal. However, if the rectification application filed by one of the parties is allowed or rejected by the Tribunal, the very same issue cannot be agitated in another rectification application by the opposite party. If this is done and allowed to be entertained by the Tribunal, then what happens is that the Tribunal gets an opportunity to review its own order for which it has no powers under the statute. Therefore, once the rectification application filed by one of the parties is considered and decided by the Tribunal rightly or wrongly, another rectification application on same issue is not maintainable against the order issued by the Tribunal under Section 254(2) of the Act. In this case, the question of liability for interest payable by the assessee under Section 220(2) rightly or wrongly was decided by the Tribunal in the rectification application filed by the assessee in their favour and so much so, the Department cannot seek to rectify the very same order again under Section 254(2) by filing another application. As already held, the second rectification application by either party is maintainable only on issues not decided by the Tribunal in any other rectification application filed by either of the parties. We, therefore, clarify that the appellate order issued under Section 254(1) gets merged in rectification orders only on the issues raised in the rectification application and on all other issues decided by the Tribunal in the appeal, the appellate order under Section 254(1) survives and is available for rectification again on any other issue on an application filed by either of the parties. Consequently, we uphold the order of the Tribunal and dismiss the Department appeal.