D.K.seth J. - (1.) There was a search and seizure in the premises of the assessee. From the documents scrutinised, some expenditure was noticed to have been incurred by the assessee. But this expenditure does not find recorded in the books of account produced. Neither this amount was shown in the category of receipts. The Assessing Officer and the appellate authority had added the amount under Section 69C on account of failure of the assessee to satisfactorily explain the said expenditure. The learned Tribunal concurred with the finding of the appellate authority to the extent that no addition can be made if the same is negated by payment. But it is to be examined, since the amount has not been shown in the regular books of account, in the context of the construction work as to whether this amount was reasonably spent or not. Therefore, the matter was remanded for reassessment to the Assessing Officer. An application for review or rectification under Section 254(2) was filed on behalf of the assessee. This was allowed and the order of remand was recalled. In the circumstances, the Department had sought for the reference on the question, which is as follows : "Whether, on the facts and in the circumstances of the case, the learned Tribunal, Calcutta, was justified in allowing the miscellaneous petition and partially recalling the order of the Tribunal for the assessment years 1987-88 and 1988-89 ?"
(2.) Under Section 254(2), the Appellate Tribunal is clothed with the power to amend with a view to rectify any mistake apparent from the record either on its own motion or on an application by the assessee or the Assessing Officer concerned. The law by now is well settled. Section 254(2) does not confer a power on the Tribunal to review its earlier order in Niranjan and Co. Ltd. v. ITAT. It is only a mistake apparent from the record in its appellate order which can only be rectified in CIT v. Kelvin Jute Co. Ltd. Under the garb of rectification, it is not possible to seek something other than rectification. The mistake, as expressed in Master Construction Co. Pvt. Ltd. v. State of Orissa, means a mistake apparent from the record but not a mistake that depends for its discovery on elaborate argument on questions of fact and law. We may note the distinction between the provision of Section 254(2) of the Income-tax Act, and Order 47, rule 1 of the Code of Civil Procedure. In the former, rectification is of a mistake "apparent from the record", whereas in the latter, of an error "apparent on the face of the record". While the Income-tax Act uses the phrase "from the record", the Code of Civil Procedure uses the phrase "on the face of the record". Therefore, the scope of Section 254(2) of the Income-tax Act is much more limited than the width of Order 47 of the Code of Civil Procedure. This distinction was noted by the apex court in ITO v. Asok Textiles Ltd. [1961] 41 ITR 732 referring to Maharana Mills (Pvt.) Ltd. v. ITO. Mere complexity of the problem or necessity of genuine argument for discovery of mistake, by itself is not a sufficient reason to oust the jurisdiction of the Tribunal to rectify the mistake. If it could be discerned with some precision after a fair probe into the record and reasonable and probable conclusion can be arrived at and that the court's conscience has been shaken, then it would be an error from the record subject to rectification. But if two views are possible or detailed argument would be necessary for understanding the question, then that would not be a mistake within the meaning of this section. It is not sufficient that there is merely a mistake, it must be one apparent from the record in CTO v. Sri Venkateswara Oil Mills. A mistake apparent from the record must be an obvious and patent mistake and not something, which could be established by a long drawn process of reasoning on points on which there may be conceivably two opinions. A decision on a debatable point of law is not a mistake apparent from the record in Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Tirumale ; Balaram (T. S.), ITO v. Volkart Brothers. A mistake apparent from the record is one to point out for which no elaborate argument is required. It must be glaring, obvious or self-evidenced mistake. If it is a mistake, which requires to be established by complicated process of investigation, argument or proof, it cannot be regarded as mistake apparent from the record. A debatable issue does not come within the scope of this provision in Smt. Nita Taneja v. Asst. CED.
(3.) The question is very simple in the present case. Whether having regard to the finding of the learned Tribunal, it could be said that the finding recorded is a mistake apparent from the record or not. In order to appreciate the situation and understand the order in the context it is passed, we are to refer to Section 69A read with Section 69C of the Income-tax Act, 1961. Section 69A deals with unexplained money if found at the hands of the assessee unless satisfactorily explained is deemed to be an income at the hands of the assessee for such financial year when it was seized. Section 69A deals with receipt of income on the basis of existence of assets mentioned therein. Whereas Section 69C deals with unexplained, source of expenditure. If from documents it appears that there was an expenditure, unless its source is satisfactorily explained, the same would also be deemed to be the income of the assessee for such financial year. The question of addition depends on the satisfactory explanation of the source. It cannot be negated simply because the expenditure was actually incurred. On the failure to explain the source of the expenditure, it is liable to be added. While considering the same, the learned Tribunal in its order had observed that no addition can be made if negated by payment, as we find from page 161. In order to appreciate the situation, we may quote the relevant portion from the text of the order of the learned Tribunal as hereafter : "We have considered the rival submissions, facts and material on record. It is not disputed that the assessee was doing the business of construction and those expenses were incurred in the issue which was being constructed not as an investor and as the contractor. In these circumstances, even the expenses recorded in the seized papers are not debited in the books of account. No addition can be called for because the addition will be negated by the payments. This view had been taken by the Patna Bench of the Income-tax Appellate Tribunal in the case of Nishant Housing Development (P.) Ltd. v. Asst. CIT [1995] 52 ITD 103. However, it is to be seen whether the expenses claimed by the assessee in the regular books of account and expenses recorded in these seized papers are reasonable in the context of the construction work done by the assessee. This matter is, therefore, restored back to the file of the Assessing Officer to re-decide the matter.";