ORDER
H.L. Karwa, J.M.
1. This miscellaneous application arises out of the order of the Tribunal dt. 31st Oct., 1997, passed in Misc. Appln. No. 23/Asr/1996 relating to the asst. yr. 1992-93. The assessee vide its application dt. 6th March, 2000, has submitted as under :
“(1) Penalty of Rs. 1,00,000 was levied by AO by his order under Section 271B, dt. 30th Aug., 1993. Appeal against that order was dismissed by CIT(A), Amritsar, by his order dt. 30th Nov., 1994, and Tribunal had also dismissed assessee’s appeal by its order dt. 7th Sept., 1995 (ITA No. 259/Asr/1995).
(2) One Misc. Appln. No. 50/Asr/1995 and another Misc. Appln. No. 23/Asr/1996 arising out of ITA No. 259/Asr/1995 were also rejected by Hon’ble Tribunal vide its orders dt. 12th Jan., 1996, and 31st Oct., 1997, respectively.
(3) Misc. Appln. No. 23/Asr/1996 has not sufficiently and effectively dealt with the objection of the applicant regarding jurisdiction of SMC ITA No. 259/Asr/1995 was filed on 13th March, 1995, whereas the assessment was completed by the Asstt. CIT on 23rd March, 1995. The assessment was made at Rs. 4,42,53,898. At the time of filing the appeal the assessment was pending and, therefore, the applicant was not in a position to give the figure of assessed income nor he could file the copy of the assessment order along with the appeal as required by r. 9(2) of Income-tax Appellate Tribunal Rules, 1963.
(4) No Single Member had the jurisdiction to decide an appeal as SMC where the total income as computed by the AO exceeded 1,00,000 rupees. The defect in the appeal form of inaction of the Asstt. Registrar in not pointing out the defect in the appeal could not give any jurisdiction to the Hon’ble Bench if that jurisdiction was not available under the Act. The jurisdiction could not be assumed by the Hon’ble Bench merely on the basis of any defect in the appeal form or any wrong information furnished in the appeal form.
(5) Again penalty is levied under Section 271B for default in getting accounts audited under Section 44AB. The appeal filed against the assessment order was set aside by the Hon’ble Bench by order dt. 26th Feb., 1997, and reassessment was made by the AO at Rs. 35,42,620. There was no proof of any actual receipt or actual payment of commission, etc. and, therefore, income was estimated at Rs. 35,42,620 @ 8 per cent of the deemed commission. Statutory audit under Section 44AB was required only if there was actual receipt of more than Rs. 40 lacs. Otherwise no compulsory audit was required. This aspect has also not been looked into by the Hon’ble Bench.
It is, therefore, humbly requested that the above mistakes being apparent from the record may kindly be rectified and suitable order be kindly passed in this respect.”
2. Briefly stated, the facts of the case are that the AO, Ward-I(i), Amritsar, vide his order dt. 30th Aug., 1993, imposed a penalty of Rs. 1,00,000 under Section 271B of the IT Act, 1961, for the default of not getting the books of accounts audited as per the provisions of Section 44AB of the Act. Against the order of the AO the assessee preferred an appeal before the CIT(A). The learned CIT(A) vide his order dt. 30th Nov., 1994, dismissed the appeal of the assessee.
2.1. The assessee came in second appeal before the Tribunal. The Tribunal, Amritsar Bench ‘SMC’, vide his order dt. 7th Sept., 1995, passed in ITA No. 259/Asr/1995, dismissed the appeal, observing as under:
“3. At the time of hearing the assessee and his counsel remained absent despite notice served by regd. post. I have heard the learned Departmental Representative and gone through the material available on record. I do not find any material on record to take a different view in the matter. Further, it will be pertinent to mention that the appeal is defective as the grounds of appeal taken are against Rule 8 of the ITAT Rules, 1963, since these are argumentative. In the result, the appeal filed by the assessee is dismissed.”
2.2. The assessee moved a Misc. Appln. No. 50/Asr/1995 under Section 254(2) of the Act, praying for setting aside the ex parte order dt. 7th Sept., 1995, on the ground that the assessee had not received the notice of hearing, and therefore, it could not appear before the Tribunal on the date of hearing. However, the Tribunal, Amritsar Bench ‘SMC’, did not find any merit in the application and the same was rejected vide its order dt, 12th Jan., 1996.
2.3. On 8th Feb., 1996, the assessee moved yet another Misc. Appln. No. 23/Asr/1996 under Rule 254(2) of the Act seeking rectification of the order passed in ITA No. 259/Asr/1995. Paras 1 to 8 of this application are reproduced here under:
“(1) ITA No. 259/Asr/1995 was filed by the appellant company, on 13th March, 1995, in prescribed Form No. 36, along with grounds of appeal, copy of CIT’s order and receipt of Rs. 250 as payment of appeal fee. This appeal was filed against CIT’s order dt. 30th Nov., 1994, confirming penalty levied under s, 271B. Since the assessment was pending at the time of filing the appeal, copy of assessment order was not attracted.
(2) Column No. 3-A and 3-B of Form No. 36 were filled in by the appellant as under :
3-A Total income declared Rs. 29,640
3-B Total income as computed by the AO Rs. 29,640
(not disputed)
The assessment was completed by the Asstt. CIT Circle 1(3), Amritsar, by assessment order, dt. 22nd March, 1995, at Rs. 4,42,53,898.
(3) The Asstt. Registrar had not pointed out the defect in the memo of appeal and had not asked the appellant to rectify the defect within any reasonable time. No enquiry was made about the assessed income and the appeal was heard ex parte.
(4) A further defect was also found in the Tribunal’s order dt. 7th Sept., 1995, to the effect that the appeal was defective as the grounds of appeal were against Rule 8 of ITAT Rules. This defect was also not pointed out to the appellant earlier.
(5) It is noted by the appellant that Col. 3-B of Form No. 36 (Memo of appeal) should have shown the figure of assessed income of Rs. 4,42,53,898 and a revised memo of appeal should have been field.
(6) It is further felt that the appeal fee should have been deposited at Rs. 1,500 instead of Rs. 250 deposited earlier.
(7) As the assessed income stood at Rs. 4,42,53,895 the appellate jurisdiction was of the Division Bench and not of the Single Member Bench. Appeal was wrongly fixed and decided as ‘SMC’.
(8) It is further noted that the grounds of appeal should have been in accordance with Rule 8 of the ITAT Rules.
It is, therefore, humbly requested that the mistakes being apparent from record, may very kindly be rectified and the appeal be kindly heard afresh on merits.”
2.4. The Division Bench of this Tribunal after considering the submissions made by the learned representatives of the parties and after going through the various documents held that the appeal was rightly placed for disposal before the ‘SMC’ Bench and there was no mistake apparent from records. Misc. Appln. No. 23/Asr/1996 was dismissed by the Division Bench of the Tribunal on 12th Jan., 1996.
3. We have heard the learned representatives of both the parties, and have also carefully gone through the contents of the application as well as the order of the Tribunal. The main contention of the assessee is that while disposing of the Misc. Appln. No. 23/Asr/1996, the Tribunal has not properly considered and adjudicated upon the issue regarding jurisdiction of SMC. According to the learned counsel for the assessee, in this case, the AO has completed the assessment on 23rd March, 1995, determining the total income at Rs. 4,42,53,898 and, therefore, under the provisions of IT Act, the appeal No. 259/Asr/1995 should have been placed before the Division Bench of the Tribunal and Single Member of the Bench had no jurisdiction to decide the appeal. It is relevant to note that the assessee had moved Misc. Appln. No. 50/Asr/1995 before the Tribunal and the learned Hon’ble Member rejected the same on 12th Jan., 1996. In the said application, the assessee has not raised the issue regarding the jurisdiction of the SMC. However, in the second miscellaneous application i.e., Misc. Appln. No. 23/Asr/1996, the assessee vide para 7 of the application had questioned the jurisdiction of the SMC in disposing of the appeal. The Division Bench of this Tribunal in its order passed in Misc. Appln. No. 23/Asr/1996 has duly considered the objections of the assessee regarding jurisdiction of Single Member in deciding the appeal of the assessee and the Tribunal passed a detailed order, wherein it was held that the appeal was rightly placed for disposal before the SMC Bench. The Tribunal found that there was no error in the order dt. 7th Sept., 1995, and rejected the application, vide order dt. 31st Oct., 1997. On a perusal of the order of the Tribunal dt. 31st Oct., 1997, it would be clear that the Tribunal has duly considered the objections of the assessee stated in Misc. Appln. No. 23/Asr/1996. Now, by means of present application, the assessee has raised the same objections which were taken in Misc. Appln. No. 23/Asr/1996. In our view, on this score alone, the present miscellaneous application is liable to be dismissed. It would be relevant to state that the objections taken in this application had already been considered by the Tribunal while deciding Misc. Appln. No. 23/Asr/1996. It is well established law that under the garb of rectification under Section 254(2) of the IT Act, the Tribunal cannot rewrite the order. Secondly, under the law, the Tribunal has no power to rectify its order dt. 31st Oct., 1997, passed under Section 254(2) of the Act. Section 254 provides as under :
254. (1) The Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit.
(2) The Tribunal may, at any time within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under Sub-section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the AO.”
From the above, it is clear that time allowed for rectification under the provisions of law is four years from the date of order passed under Section 254(1) of the Act. In this case, the order under Section 254(1) was passed on 30th Nov., 1994, and the assessee has moved the present application on 6th/7th March, 2000, i.e., after the expiry of period of four years. Section 254(2) specifically empowers the Tribunal to rectify any order passed under Section 254(1) of the Act. Therefore, it is clear that the Tribunal has no power to rectify its order passed in Misc. Appln. No. 23/Asr/1996 passed under Section 254(2) of the Act. While taking such a view, we are also fortified by the decision of the Hon’ble Orissa High Court in CIT v. ITAT and Ors. (1992) 196 ITR 838 (Ori). While deciding a similar issue the Hon’ble Orissa High Court has held (p. 840) as under:
“Section 254(2) empowers the Tribunal to amend any order passed by it under Sub-section (1) with a view to rectify any mistake apparent from the record at any time within four years from the date of the order. Therefore, to attract the applicability of Section 254(2), the mistake which is sought to be rectified must be apparent from the record, and the same must be in any order passed under Sub-section (1) of Section 254. The order referred to in Section 254(1) is the one relating to an appeal filed by either the assessee or the Revenue. Section 254(1) reads as follows :
The Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit.’
The ‘appeal’ referred to in the provisions is one filed under Section 253. Therefore, the order which can be rectified must be one which has been passed by the Tribunal in an appeal filed under Section 253. In our view, an order rejecting an application for rectification under Section 254(2) is not available to be rectified under Section 254(2). The same may relate to an appeal, but it is not an order passed by the Tribunal under Sub-section (1) of Section 254. As indicated above, the assessee’s application for rectification under Section 254(2) was rejected by the Tribunal. The second application was for rectification of some alleged mistakes in the said order of rejection. Section 254(2) had no application to such an order. The Tribunal was not justified in purporting to act under Section 254(2) and passing the impugned order.”
3.1. In the case of CIT v. Smt. Gunwanti Bai (1996) 219 ITR 632 (MP), the Hon’ble Madhya Pradesh High Court has held that second application for rectification is not maintainable. In the said case, an application under Section 254(2) of the Act for rectification was moved before the Tribunal which was rejected on 16th Aug., 1982, on the ground that there was no error and all the material was taken into consideration and, therefore, there was no occasion to recall the earlier order dt. 12th Feb., 1982. Thereafter, the second application for rectification was moved on 2nd Feb., 1983, before the Tribunal and this application was allowed by the Tribunal vide its order dt. 23rd Dec., 1983. On reference, the Hon’ble High Court has held (pp. 635-636) as under:
“Normally, rectification only means to correct an error which is apparent on the face of the record and not to decide the matter over again on the merits. In the present case, in the second application which has been allowed by the Tribunal, the Tribunal has acted on merit part which was considered by all the three authorities, i.e., the ITO, the AAC and the Tribunal and recorded their findings. Such findings of fact cannot be rectified in a rectification application under Section 254(2) of the Act. Moreso, in the present case, the first rectification application was rejected. Notwithstanding that, a second application was entertained and this act of the Tribunal, in our opinion, was absolutely not warranted and the Tribunal had no jurisdiction to interfere, under the garb of rectification, a decision on the merits could not be given. Hence, we are of the opinion that the view taken by the Tribunal in its order dt. 23rd Dec., 1983, was beyond the scope of rectification under Section 254(2) of the Act.”
In our view, the decision of the Hon’ble Madhya Pradesh High Court, referred to above, is also fully applicable to the facts of the present case.
4. In view of the above discussion, we do not find any merit in the application and accordingly the same is dismissed.
5. In the result, the Miscellaneous Application, is dismissed.