Vaibhav Maruti Dombale v. Assistant Registrar, ITAT

Case snapshot

Sections / provisions: 254(2)

Questions before the Court / Tribunal

• Rectification based on subsequent Supreme Court decision: The reported High Court decision addresses the narrow scope of section 254(2) and whether a later judicial development can be used to recall or rectify a concluded Tribunal order.

Material facts and background

therein, there are two observations of a general character which I wish to make; and one is to repeat what I have very often said before- that every judgement must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but are governed and qualified by the particular facts of the case in which such Page 10 of 30 Mohite

expressions are to be found. The other is that a case is only an authority for what it actually decides. I entirely deny that it can be quoted for a proposition that may seem to follow logically from it. Such a mode of reasoning assumes that the law is necessarily a logical Code, whereas every lawyer must acknowledge that the law is not always logical at all." (emphasis supplied) We entirely agree with the above observations.

In Ambica Quarry Works vs. State of Gujarat & others

(vide SCC p.211, para18 ) this Court observed: "18. The ratio of any decision must be understood in the background of the facts of that case. It has been said a long time ago that a case is only an authority for what it actually decides, and not what logically follows from it." 16.

In Bhavnagar University vs. Palitana Sugar Mills Pvt.

Ltd.(vide SCC p. 130, para 59) this Court observed: "59. ...It is well settled that a little difference in facts or additional facts may make a lot of difference in the precedential value of a decision." (emphasis supplied) 17.

disclosing the factual situation. In the same judgement this Court also observed:(SCC pp. 584-85, paras 9-12)

Appellant / assessee submissions

The judgment copy does not separately set out this component in a distinct section; refer to the full order and the reasoning section below.

Revenue / respondent submissions

The judgment copy does not separately set out this component in a distinct section; refer to the full order and the reasoning section below.

Court / Tribunal analysis and reasoning

Megarry, J. in Sherpherd Homes Ltd.v Sandham (No. 2) , observed:(AII ER p.1274d) ‘One must not, of course, construe even a reserved judgement of Russell L. J. as if it were an Act of Parliament.;’ And, in British Railways Board v. Herrington Lord Morris said: (AII ER p.761c) ‘There is always peril in treating the words of a speech or judgement as though they are words in a legislative enactment, and it is to be remembered that judicial utterances are made in the setting of the facts of a particular case.’ 11. Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper. 12. The following words of Lord Hidayatullah,J. in the matter of applying precedents have become locus classicus:(Abdul Kayoom v. CIT, AIR p.688, para 19 ) ‘19. ...Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect, in deciding such cases, one should avoid the temptation to decide cases (as said by Cardozo) by matching the colour of one case against the colour...

“3.2 Having gone through both the orders passed by the ITAT, we are of the opinion that the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013 is beyond the scope and ambit of the powers under Section 254(2) of the Act. While allowing the application under Section 254(2) of the Act and recalling its earlier order dated 06.09.2013, it appears that the ITAT has re-heard the entire appeal on merits as if the ITAT was deciding the appeal against the order passed by the C.I.T. In exercise of powers under Section 254(2) of the Act, the Appellate Tribunal may amend any order passed by it under subsection (1) of Section 254(2) of the Act with a view to rectifying any mistake apparent from the record only. Therefore, the powers under Section 254(2) of the Act are akin to Order XLVII Rule 1 CPC. While considering the application under Section 254(2) of the Act, the Appellate Tribunal is not required to revisit its earlier order and to go into detail on merits. The powers under Section 254(2) of the Act are only to rectify/correct any mistake apparent from the record.” (emphasis supplied)

Exchange case is also not applicable in the instant case for the reason that when Pune Municipal Corpn. was decided there was no judgement of Indore Development Authority. The decision of the Larger Bench in Indore Development Authority is not prior to but subsequent to the judgement in Pune Municipal Corpn. The judgement and decision in Pune Municipal Corpn. dated 08.02.2018 held the field till the judgement in Indore Development Authority which was pronounced on 06.03.2020. Therefore, the judgement in Indore Development Authority being a subsequent decision cannot give rise to review and recall of the decision in Pune Municipal Corpn. as well as other judgements following the aforesaid case, on the basis that judgement in Pune Municipal Corpn. has been overruled in the subsequent case, namely, Indore Development Authority.” (emphasis supplied) Page 19 of 30 Mohite

Hon’ble Supreme Court has not laid down the principle that after the passing of the Order of the Tribunal which has attained finality between the parties, a subsequent judgement is rendered by a superior court, then the order of the Tribunal should be recalled within the scope of Section 254(2) of the IT Act. Paragraphs 20 to 22 of the said judgement are relevant and are set out hereunder: “20. We are aware that many of the Co-ordinate Benches have recalled the order of the Tribunal on this issue on the principle of the Hon'ble Supreme Court in the case of Asstt. CIT v. Saurashtra Kutch Stock Exchange Ltd. [2008]173 Taxman 322/305 ITR 227. In the aforesaid case the issue was that the Tribunal has passed an order on 27/10/2000 upholding the decision of CIT that assessee was not entitled for exemption u/s.11. Thereafter, the Miscellaneous Application was filed u/s. 254(2) to rectify the error committed by the Tribunal in the decision rendered by any appeal as it has not followed the judgement of the Hon'ble Jurisdictional High Court in the case of Hiralal Bhagwati vs. CIT reported in [2000] 246 ITR 188(Guj.) ; Suhrid Geigy Ltd vs. Commissioner of Surtax [1999] [1999] 107 Taxman...

Operative decision and relief

Petition is also disposed of in terms thereof. However, there shall be no order as to costs.

Authorities and precedents appearing in the judgment

• Checkmate Services P. Ltd. vs. CIT
• Rajkot vs. Saurashtra Kutch Stock Exchange Ltd. (2008) 173 Taxman 322 (SC) and a
• Mumbai Bench of the ITAT in DCIT vs. ANI Integrated Services Ltd
• Sarva Shramik Sanghatana vs. State of Maharashtra (2008) 1 SCC 494
• Quinn v. Leathem
• Before discussing Allen v. Flood and
• In Ambica Quarry Works vs. State of Gujarat & others
• In Bhavnagar University vs. Palitana Sugar Mills Pvt
• As held in Bharat Petroleum Corpn. Ltd. v. N.R.Vairamani
• In London Graving Dock Co. Ltd. v. Horton ( AC at p. 761)
• In Home Office vs Dorset Yacht Co. Ltd. Lord Reid
• British Railways Board v. Herrington Lord Morris said

This list is machine-assisted from the judgment text and is not a substitute for checking the full citation chain in the PDF.

Ratio and legal principle

The decision turns on Rectification based on subsequent Supreme Court decision. The operative result is classified as Disposed. Read the rule only with the statutory version, factual findings and precedent chain recorded in the full judgment.

Why this judgment matters

The case is relevant to taxpayers, advisers and litigators dealing with Rectification based on subsequent Supreme Court decision. Its practical value lies in the interaction between the statutory text, the evidentiary record and the procedural route followed in this case.

Practitioner action points

• Maintain a date-and-payment matrix for transfer, agreement, possession, investment and construction; capital-gains exemptions commonly turn on this chronology.
• For litigation, attach the full judgment/order to the working paper and cite the paragraph/page supporting the proposition rather than relying on a headnote alone.

Full judgment and source trail

Read / download the clean local judgment copy

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