IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:22.12.2011 CORAM THE HON'BLE MR.JUSTICE ELIPE DHARMA RAO & THE HON'BLE MR.JUSTICE R.SUBBIAH T.C.(A) NOS.1138 & 1139 OF 2010 The Commissioner of Income Tax-III Coimbatore ..Appellant in both Tax Cases Vs. M/s.Park Trust 36, KPN Colony, First Street Tirupur  641 604 ..Respondent in both Tax Cases Prayer: Tax Case Appeals against the order dated 12.03.2010 passed by the Income Tax Appellate Tribunal, "D" Bench, Chennai in M.P.No.20/Mds/2010 in I.T.A.No.1343/Mds/2008 and C.O.No.158/Mds/2008 in I.T.A.No.1343/Mds/2008 respectively. For Appellant : Mr.T.Ravikumar For Respondent : Mr.A.Thiagarajan COMMON JUDGMENT (Judgment of the court was delivered by Justice Elipe Dharma Rao) These Tax Case Appeals have been filed against the order dated 12.03.2010 passed by the Income Tax Appellate Tribunal, "D" Bench, Chennai in M.P.No.20/Mds/2010 in I.T.A.No.1343/Mds/2008 and C.O.No.158/Mds/2008 in I.T.A.No.1343/Mds/2008 respectively. 2. The assessee is a charitable trust created vide Registered Trust Deed dated 10.09.1991. The trust is engaged in the activity of running educational institutions and it has been granted registration under section 12AA of the Income Tax Act by the Commissioner of Income Tax. For the assessment year 2003-04, the assessee trust filed its return of income on 15.12.2003 admitting "NIL" income, after availing income exemptions under section 10(23C) of the Act. The case was taken up for scrutiny and a notice under section 143(2) of the Act was issued to the assessee. The assessee was represented by an authorised Chartered Accountant. During the course of assessment proceedings, the Assessing Officer found that the assessee had advanced a sum of Rs.25 lakhs to the Shri.P.V.Ravi, who is the Managing Trustee of the assessee trust. Since this amounted to violation of section 13 of the Act, the assessee was asked to explain as to why the exemption claimed under section 11 of the Act should not be denied. It was explained that advance was made by the assessee for the purpose of purchase of property for the trust and hence, there was no violation of the provisions of section 13 of the Act. However, the Assessing Officer, was not persuaded with the explanation offered. Therefore, he denied the exemption under section 11 of the Act to the assessee and thus completed the assessment on 31.03.2006. Challenging the said assessment order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) in I.T.A.No.45/06-07 and the Commissioner, by order dated 31.03.2008, allowed the appeal filed by the assessee and directed the Assessing Officer to grant exemption under section 11 of the Act to the assessee. As against the same, the Revenue filed an appeal before the Income Tax Appellate Tribunal in I.T.A.No.1343/Mds/2008 and the assessee filed Cross Objection in C.O.No.158/Mds/2008. The Tribunal, by order dated 19.06.2009, allowed the appeal filed by the Revenue and dismissed the Cross Objection filed by the assessee. Therefore, the assessee filed M.P.No.20/Mds/2010 in I.T.A.No.1343/Mds/2008 and C.O.No.158/Mds/2008, to rectify the error in the order dated 19.06.2009 passed by the Tribunal. The Tribunal, while dismissing the appeal filed by the Revenue and modifying the order dated 19.06.2009 passed by it earlier, allowed the miscellaneous petition filed by the assessee. Aggrieved by the same, the Revenue has filed the present Tax Case Appeals. 3. At the time of admitting the tax case appeals, the following substantial questions of law were framed by this court: "(a) Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in holding that there was a mistake apparent from the records warranting rectification of its order under section 254(2) of the Act? (b) Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in holding that there was a mistake apparent from the record inasmuch as the decision of the Hon'ble Supreme Court in the case of Adithanar Educational Institution Vs. Additional CIT reported in 224 ITR 310, which deals with exemption under section 10(22) of the Act, was not considered while deciding the appeal filed by the Revenue, when in fact the later decision of the Supreme Court in the case of Director of Income Tax Vs. Bharat Diamonds Bourse reported in 259 ITR 280 relied upon by the Tribunal in the original order was very much on the issue raised? (c ) Whether on the facts and circumstances of the case, the Tribunal was right in holding that there was no violation of the provisions of section 13(1)(c)(ii) of the Act by the assessee trust?" 4. We have heard the learned counsel appearing on either side and perused the entire materials available on record. 5. It is not in dispute that the assessee filed its return of income for the assessment year 2003-04 admitting "NIL" income, after availing exemptions under section 10(23C) of the Act. However, during the assessment proceedings, the Assessing Officer found that the assessee had advanced a sum of Rs.25 lakhs to Shri.P.V.Ravi, the Managing Trustee of the assessee trust, which was in violation of section 13 of the Act. Therefore, the assessee was asked to explain as to why the exemption claimed under section 11 of the Act should not be denied to the assessee. The assessee explained that in the current year no funds were given by the trust to Shri.P.V.Ravi; the transaction related to the previous year; Shri.P.V.Ravi gave a sum of Rs.25 lakhs to Shri.S,K.Senthilkumar from his individual account during the financial year ending 31.03.2002 for purchasing a property for the trust; since property could not be purchased before the end of that year, a journal entry was made in the books of the trust by showing it as a debit balance and by crediting the account of Shri.P.V.Ravi on 31.03.2002; due to litigation in the property, it could not be purchased and the amount of advance was returned back by Shri.S.K.Senthilkumar to Shri.P.V.Ravi during the year 2003-04; as Shri.P.V.Ravi received back his money during the current year from Shri.S.K.Senthilkumar, a reverse entry was made in the books of accounts of the trust on 31.03.2003 and therefore, there was no outflow of cash from the trust. On the basis of the above materials available on record, the Commissioner of Income Tax (Appeals) found that, during the current year, undisputably no funds were given by the trust to Shri.P.V.Ravi and thus, there was no allegation of application of funds for the benefit of any person referred to in sub section (3) during the current year. Therefore, the Commissioner held that, since during the current year no part of the income of trust was used or applied directly or indirectly for the benefit of any specified person, the exemption claimed under section 11 of the Act for the current year could not be denied to the assessee. 6. It was contended by the Revenue before the Tribunal that when the assessee had paid huge amount as interest on its borrowings and had given interest free advance to Shri.P.V.Ravi, who was the Managing Trustee of the assessee trust, it is clear that the property of the trust had been applied directly or indirectly for the benefit of the person mentioned in section 13(3) of the Act during the year in question and therefore, it was in violation of the provisions contained in section 13(1)(c)(ii) of the Act. However, according to the assessee, during the year 2003-04, there was no outflow of cash from the assessee trust and therefore there was no question of applying the provisions of section 13(1)(c)(ii) of the Act to the case of the assessee. The Tribunal, on the basis of the above material and also on the basis of the other materials available on record, found that, when money was given to the persons referred to in section 13(3) of the Act, then, in the absence of any agreement, it has to be held that it was in violation of the said section, since no interest was charged and no security was obtained from the Managing Trustee, to whom the money was given for the so-called purchase of the property. The Tribunal also found that, even assuming for a moment that such transaction was genuine, the money was given without any agreement between the Trust and the Managing Trustee and so-called sellers and no interest was charged from the Managing Trustee. But, on the other hand, the assessee trust was paying heavy interest on its borrowings. On the basis of the above findings, the Tribunal, in its order dated 19.06.2009, while holding that the assessee had violated the provisions of section 13(1)(c)(ii) of the Act, set aside the order passed by the Commissioner of Income Tax (Appeals). 7. The assessee trust filed a petition before the Tribunal under section 254(2) of the Act to rectify the mistake committed by the Tribunal in passing the order dated 19.06.2009 on the ground that, the Tribunal, while deciding the appeal filed by the Revenue, did not consider the decision of the Hon'ble Supreme Court of India in the case reported in Aditanar Educational Institution Vs. Additional CIT (224 ITR 310) for adjudicating the issue regarding violation of section 13 of the Act. According to the learned counsel appearing for the Revenue, the Tribunal ought not to have reviewed the original order passed by it that the assessee had violated the provisions of section 13(1)(c)(ii) of the Act and as per the provisions of section 254(2) of the Act, the conclusion arrived at by the Tribunal cannot be reviewed, especially when the Assessing Officer had found that though the transaction took place in the previous year relevant to the assessment year 2002-03, the advance amount of Rs.25 lakhs was shown as outstanding vide Schedule 14 to the balance sheet in the name of the trustee as on 31.03.2003 and as per section 13(2)(a) of the Act, if any part of the income or property is or continues to be lent to any person referred to in sub-section (3) for any period during the previous year without either adequate security or adequate interest or both, then, it is deemed to have been used or applied for the benefit of the person referred to in sub-section (3) of section 13 of the Act and therefore, it is in violation of section 13(2)(a) of the Act during the assessment year under consideration. 8. In the light of the said arguments, we perused section 254(2) of the Act. The said section reads as follows: "The Appellate 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 Assessing Officer." It is clear from the said section that at any time within a period of four years from the date of passing the earlier order, the Tribunal, with a view to rectify any mistake apparent from the record, amend any order passed by it under sub-section (1) and such amendment shall be made as and when the mistake is pointed out by the assessee or the Assessing Officer within the said period. In this case the original order was passed by the Tribunal on 19.06.2009 and the rectification petition in M.P.No.20/Mds/2010 was filed in the year 2010. Therefore, it is clear that the petition was filed in time. As already stated, the said petition was filed on the ground that the Tribunal did not consider the decision of the Hon'ble Supreme Court of India in the case reported in Aditanar Educational Institution Vs. Additional CIT (224 ITR 310) for adjudicating the issue regarding violation of section 13 of the Act. Whether non-consideration of the decision of the Hon'ble Supreme Court of India would constitute a rectifiable mistake, has been decided by the Supreme Court in the case reported in ACIT Vs. Saurashtra Kutch Stock Exchange Ltd.( (2008) 305 ITR 227). In that case, the Supreme Court has held as follows: "The core issue, therefore, is whether non-consideration of a decision of jurisdictional court (in this case a decision of the High Court of Gujarat) or of the Supreme Court can be said to be a "mistake apparent from the record"? In our opinion, both  the Tribunal and the High court  were right in holding that such a mistake can be said to be a "mistake apparent from the record", which could be rectified under section 254(2)." 9. From the above, it is clear that if there is a mistake apparent on record, the Tribunal has the power to rectify the said mistake in the petition filed under section 254(2) of the Act. In this case, admittedly while passing the earlier order, the Tribunal did not consider the decision of the Hon'ble Supreme Court of India in the case reported in Aditanar Educational Institution Vs. Additional CIT (224 ITR 310) for adjudicating the issue regarding violation of section 13 of the Act. Therefore, in the petition filed by the assessee for rectification of the said mistake, the Tribunal, after taking into account the fact that the claim of the assessee was on the basis that during the current year no part of income of the trust was utilised or applied either directly or indirectly for the benefit of any specific person; the earlier order was passed on the basis that advance of Rs.25 lakhs was given during the period 01.04.2001 to 31.03.2002, which was not the previous year relevant to the assessment year in question and also taking into account the decision of the Hon'ble Supreme Court of India in the case reported in Aditanar Educational Institution Vs. Additional CIT referred to supra, held that there is a mistake apparent on record in the earlier order passed by the Tribunal. . On the basis of the above finding, the Tribunal held that the assessee had not violated the provisions of section 13(1)(c)(ii) of the Act during the previous year relevant to the assessment year in question and on that basis, rectified the order passed by it earlier. 10. At this stage, it is brought to the notice of this court by the learned counsel appearing for the assessee that, pursuant to the order of the Tribunal, a notice dated 09.11.2011 was issued to the assessee by the Income Tax Officer on the ground that the assessee trust had advanced a sum of Rs.25 lakhs without interest to the Chairman & Managing Trustee Shri.P.V.Ravi for purchasing a property during the assessment year 2002-2003; accordingly the violation of section 13(1)(c) of the Act is attracted; the assessee had submitted before the Commissioner of Income Tax (Appeals) vide para 5 of the grounds of appeal with regard to assessment year 2003-2004 that the referred transaction did not relate to the assessment year 2003-2004 but it related to the assessment year 2002-2003 and hence, the assessee had confirmed the violation under section 13(1)(c) of the Act for the assessment year 2002-03 as per the grounds of appeal in regard to the assessment year 2003-04. By the said notice, the assessee had also been directed to furnish the details of evidences, if any, to withstand in respect of the violation under section 13(1)(c) of the Act and the case was posted for hearing on 17.11.2011. It is submitted by the learned counsel appearing for the Revenue that the order passed by the Tribunal in the rectification petition amounts to re-opening the case once again and the miscellaneous petition itself is not maintainable and if at all the assessee is aggrieved, it should have filed an appeal before the High Court, instead of filing the miscellaneous petition under section 254(2) of the Act. In support of the said submission, learned counsel appearing for the Revenue relied upon the decision reported in Express Newspapers Limited Vs. Deputy Commissioner of Income Tax ((2010) 320 ITR 12). In that judgment, a Division Bench of this court, following the decision of the Hon'ble Supreme Court of India in the case reported in ACIT Vs. Saurashtra Kutch Stock Exchange Ltd.( (2008) 305 ITR 227) as well as various other decisions of the Supreme Court and other courts, has held as follows: "The scope and amplitude of section 254(2) and the analogous provision of section 154 of the Act have been considered by a catena of decisions of the Apex Court and other High Courts. The uniform opinion of the courts of superior jurisdiction is that a patent, manifest and self-evident error which does not require elaborate discussion of evidence or argument to establish it, can be said to be an error apparent on the face of the record and can be corrected under section 254(2). An error cannot be said to be apparent on the face of the record if one has to travel beyond the record to see whether the judgment is correct or not. An error apparent on the record means an error which strikes one on mere looking and does not need a long drawn out process of reasoning on points on which there may be conceivably two opinions. The rror should not require any extraneous matter to show its incorrectness. To put it differently, it should be so manifest and clear that no court would permit it to remain on record. If the view accepted by the court in the original judgment is one of possible views, the case cannot be said to be covered by an error apparent on the face of the record. Section 254(2) specifically empowers the Tribunal to amend at any time within four years from the date of an order, any order passed by it under section 254(1) with a view to rectify any mistake apparent from the record either suo motu or on an application. In order to attract the application of section 254(2), the mistake must exist and the same must be apparent from the record. The expression "mistake apparent from the record" contained in sections 154 and 254(2) has wider content than the expression "error apparent on the face of the record" occurring in Order 47 Rule 1 of the Code of Civil Procedure. The restrictions on the power of review under Order 47 Rule 1 of the Code of Civil Procedure do not hold good in the cases of sections 254(2) and 154 of the Act. Section 254(2) does not confer power on the Tribunal to review its earlier order. Under the garb of rectification of mistake, it is not possible for a party to take further chance of re-arguing the appeal already decided. What can be rectified under section 254(2) is a mistake which is apparent and patent. The mistake has to be such for which no elaborate reasons or enquiry is necessary. Where two opinions are possible, then it cannot be said to be a mistake apparent on the record. When prejudice resulting from an order is attributable to the Tribunal's mistake, error or omission, it is its bounden duty to set it right. The purpose behind the enactment of section 254(2) of the Act to amend any order passed under sub-section (1), if any mistake apparent from the record is brought to the notice of the Tribunal, is based on the fundamental principle that no party appearing before the Tribunal, be it an assessee or the Department, should suffer on account of any mistake committed by the Tribunal. This fundamental principle has nothing to do with the inherent power of the Tribunal. If prejudice has resulted to the party, which prejudice is attributable to the Tribunal's mistake, error or omission and which error is a manifest error, then the Tribunal would be justified in rectifying its mistake. Rectification can be made only when a glaring mistake of fact or law committed by the officer passing the order becomes apparent from the record. The rectification is not possible if the question is debatable. A point which was not examined on facts or in law cannot be dealt with as a mistake apparent from the record. No error can be said to be apparent on the face of the record if it is not manifest or self-evident and requires an examination or argument to establish it. Where without any elaborate argument one could point to the error and say here is a substantial point of law which stares one in the face, and there could reasonably be no two opinions entertained about it, is a clear case of error apparent on the face of the record." 11. In view of the said submissions made by the learned counsel appearing on either side, once again, we perused the entire materials available on record, in the light of the decisions of the Hon'ble Supreme Court of India referred to above and also the other decisions of the Hon'ble Supreme Court and referred to by the Division Bench of this Court in the case reported in Express Newspapers Limited Vs. Deputy Commissioner of Income Tax ((2010) 320 ITR 12), to find out whether the Tribunal has committed any error in rectifying the earlier order passed by it on the ground that there was an error apparent on the face of the record and we found none. Section 254(2) of the Act has been enacted not only to safeguard the interest of the assessee but also to enable the Tribunal to rectify the error apparent on the face of the record. Therefore, we see no reason to interfere with the order under challenge. Consequently, the substantial questions of law framed by this court in the above tax case appeals are answered against the Revenue and in favour of the assessee. No costs. Connected miscellaneous petitions are closed. vsl