Point of Law : Sub-section (2) of Section 254 of the Act says that the Appellate Tribunal may at any time within four years from the date of the order with a view to rectify 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 assessing officer within four years.

JUDGMENT :

Ujjal Bhuyan, J.

Heard Mr. Karthik Ramana Puttam Reddy, learned counsel for the appellant and Ms. K.Mamata Chowdary, learned Standing Counsel for Income Tax Department appearing for the respondent.

2. This appeal has been preferred by the assessee as the appellant under Section 260A of the Income Tax Act, 1961 (briefly, ‘the Act’ hereinafter) against the order dated 23.02.2001 passed by the Income Tax Appellate Tribunal, Hyderabad Bench ‘B’, Hyderabad (Tribunal) in M.P.No.2/Hyd/2001 in Interest Tax Appeal No.9/Hyd/1992 for the assessment year 1985-86.

3. The appeal was admitted on 20.09.2001 on the following substantial questions of law :

“1) Whether on the facts and in the circumstances of the case and having regard to the provisions of Section 254(2) of the Income Tax Act, the Tribunal was correct in holding that on the basis of subsequent Supreme Court Judgment the Tribunal cannot rectify its earlier appellate order as a mistake apparent from record?

2) Whether the amendment of earlier order passed by the Tribunal to bring it in conformity with the law propounded by the Supreme Court subsequently amounts to review and not rectification apparent from the record under the provisions of Section 254(2) of the Income Tax Act and Section 27 of the Interest Tax Act?”

4. Before adverting to the substantial questions of law so framed, it would be apposite to briefly dilate on the material facts. In the assessment proceeding for the aforesaid assessment year, appellant (assessee) did not declare any interest on the balance in the “protested bill account”. Therefore, assessing officer added a sum of Rs.2,65,51,147.00 as chargeable interest for the said assessment year.

5. Against the aforesaid order of assessment, assessee preferred an appeal before the Commissioner of Income Tax (Appeals). Taking the view that Section 43D of the Act, though introduced with effect from 01.04.1991, was retroactive in nature, appellate authority held that on that basis no interest could have been levied. Therefore, addition made by the assessing officer was deleted. This order of the Commissioner of Income Tax (Appeals) came to be challenged by the revenue before the Tribunal in further appeal.

6. Tribunal, following two decisions of the Supreme Court in State Bank of Travancore v. CIT, (1986) 158 ITR 102 and Kerala Financial Corporation v. CIT, (1994) 210 ITR 129, reversed the decision of the Commissioner of Income Tax (Appeals) and restored the matter to the file of the assessing officer for quantification of the interest to be chargeable vide the order dated 22.10.1997.

7. After the aforesaid decision was rendered by the Tribunal on 22.10.1997, assessee filed a miscellaneous petition before the Tribunal stating that the above two decisions of the Supreme Court in State Bank of Travancore (supra) and Kerala Financial Corporation (supra) have since been overruled by the Supreme Court in the case of UCO Bank v. CIT, (1999) 237 ITR 889. Therefore, Tribunal was requested to rectify the order dated 22.10.1997 under Section 254(2) of the Act.

8. By the order dated 23.02.2001, Tribunal held that decision rendered by the Supreme Court in UCO Bank (supra) was subsequent to the order of the Tribunal dated 22.10.1997. The said decision was not available at the time of decision rendered by the Tribunal. Therefore, there is no mistake apparent from the record in the order of the Tribunal, scope of rectification being very limited. If the prayer for rectification was allowed, it would amount to review of the decision of the Tribunal which is impermissible. Therefore the miscellaneous petition for rectification was dismissed. Hence this appeal.

9. At the threshold, we asked learned counsel for the appellant as to whether any appeal has been preferred assailing the order of the Tribunal dated 22.10.1997. He submitted that no such appeal has been preferred. The present appeal is confined only to the legality and validity of the order dated 23.02.2001 rejecting rectifi