B.P. Jeevan Reddy, C.J. - (1.) THESE applications under Section 256(2) of the Income-tax Act, 1961, are filed by the assessee regarding assessment years 1980-81 and 1981-82, respectively. The following questions are sought to be referred : "1. Whether the Tribunal was legally correct in recalling its entire order ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was legally competent to review the matter instead of correcting only the apparent mistakes ? 3. Whether the Tribunal was legally justified in observing that the question raised and its non-determination is a mistake apparent from the record which deserves to be rectified in spite of the legal position that any point raised which has not been specially dealt with is presumed to have been decided against the concerned party ?"
(2.) ORDERS of assessment relating to the assessment years 1980-81 and 1981-82 were revised by the Commissioner under Section 263. The Commissioner's orders were appealed against by the assessee before the Tribunal. A preliminary objection was raised before the Tribunal by the Revenue claiming that the appeals preferred by the assessee were barred by time. The assessee, in turn, argued that the orders of the Commissioner under Section 263 were barred by time. By its order dated February 29, 1988, the appeals were disposed of by the Tribunal. Both the Revenue and the assessee, thereupon filed applications for reopening appeals and their rehearing. The Revenue's case was that it had raised a preliminary objection as to the maintainability of the appeal on the ground of limitation, which the Tribunal failed to deal with in its judgment. The assessee submitted that it had raised several contentions, but the Tribunal dealt with only one of his contentions, namely, whether the Commissioner's orders were barred by time, and did not deal with the other contentions. After hearing both the parties, the Tribunal found that the Revenue had indeed raised a preliminary objection, as contended by it, which was not noticed in its judgment. Accordingly, it reopened the appeals, heard the parties and dismissed the appeals as barred by time. In that view of the matter, it did not go into the merits of the contentions urged by the assessee. Thereupon, the assessee applied for reference under Section 256(1) which was declined. Hence, these applications. The contention of Sri Mandhyan, learned counsel for the assessee, is that the Tribunal had no jurisdiction under Section 254(2) to reopen and rehear the appeals on the ground aforesaid. He relied upon the proposition that where a contention is urged by a party but is not dealt with by the Tribunal, the contention must be deemed to have been negatived. He submitted that, in such a situation, the Tribunal has no jurisdiction to reopen the appeals since it cannot be said that its order suffers from any error apparent on the face of the record. It is not possible to agree. It may be that a contention urged but not dealt with by the Tribunal can be taken as having been negatived. This proposition is, however, not inconsistent with the power of the Tribunal to reopen the appeal where it is brought to its notice that an important contention raised by the party was not dealt with by the Tribunal in its order. By way of illustration, take a case where an assessee files an appeal raising four grounds, which he urges at the hearing of the appeal. The Tribunal, however, dismisses the appeal only on ground No. 4. Would it not be open to the assessee in such a case to as,k for reopening and rehearing of the appeal on the ground that the first three contentions urged by him have not been noticed or discussed by the Tribunal ? We think that such power must be held to be inherent in the Tribunal, since it would be a case where the party has suffered prejudice for no fault of his but on account of a mistake or error on the part of the Tribunal. It is a well-settled proposition that an act of court (which, in the context, means and includes a Tribunal of the nature of the Income-tax Appellate Tribunal) should not prejudice a party. In such a case, it would not be just to drive the party to a reference under Section 256. It must be left to the Tribunal to reopen the appeal if it finds that it has omitted to deal with an important ground urged by the party. We are not persuaded to agree that the expression "record" in the phrase "mistake apparent from the record" in Section 254(2) means only the judgment. The record means the record before the Tribunal. Failure to deal with a preliminary objection of the nature concerned herein certainly amounts to a mistake apparent from the record. We must hasten to make it clear that the expression "error apparent on the face of the record" is not easy to define ; see the decision of the Supreme Court in Hari Vishnu Kamath v. Ahmed Ishaque, AIR 1955 SC 233. Suffice it to say that failure to deal with a preliminary objection relating to maintainability of the appeal on the ground of limitation does amount to an error apparent on the face of the record. It is neither possible nor desirable to try to define the said expression or to lay down the several situations attracting, the same. We must state that no question is raised with respect to the correctness of the finding that the appeals were barred by time. All the three questions sought to be raised relate to the power of the Tribunal to reopen the appeals.
(3.) WE agree with learned counsel for the assessee that the Tribunal has no power to review. Its only power is one of rectification conferred by Sub-section (2) of Section 254. This is what was said by the Patna High Court in CIT v. Dr. Mrs. Krishna Rana [1987] 167 ITR 652 and we agree with it. Learned counsel for the assessee relied upon the decision of the Supreme Court in CIT v. Scindia Steam Navigation Co. Ltd. [1961] 42 ITR 589. In this decision, the Supreme Court enunciated the situations in which questions of law can be said to arise from the order of the Tribunal. One of the situations" mentioned by the Supreme Court is where a point was urged before the Tribunal, but not dealt with by it. Even in such a situation, it was held that a question of law to that effect must be deemed to arise from the order of the Tribunal. We do not see the proposition in this decision militating against the power of the Tribunal to rectify its mistakes. As stated hereinbefore, where the Tribunal fails or omits to deal with an important contention affecting the maintainability/merits of the appeal, it must be deemed to be a mistake apparent from the record which empowers the Tribunal to reopen the appeal and rectify the same if it is so satisfied ; see ITO v. ITAT [1966] 58 ITR 634, a decision of a learned single judge of this court and ITO v. S.B. Singer Singh and Sons, 1970 75 ITR 646 and CIT v. ITAT [1988] 172 ITR 158 (MP).;