ACIT, LTU, CIRCLE-1, NEW DELHI V. WHIRLPOOL OF INDIA LTD., GURGAON

MA 188/DEL/2020

AI Insights

The case involves the Department of Income Tax filing Miscellaneous Applications against Whirlpool of India Ltd., seeking rectification/clarification of an earlier Tribunal order dated 18/01/2019. The applications were filed with a significant delay of 365 days, for which the Department sought condonation. The Tribunal, referencing the decision of the Hon'ble Bombay High Court in Bharat Petroleum Corpn. Ltd. v. ITAT, found the applications to be beyond the period of limitation and thus not maintainable. Furthermore, the Tribunal noted that the substantive issues had been addressed in a subsequent order following the Supreme Court's decision, rendering the applications moot.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 42111 (ITAT-DELHI)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-03-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2013-2014
• Other Referred Cases: Bharat Petroleum Corpn. Ltd. v. ITAT, Asstt. CIT v. Saurashtra Kutch Stock Exchange Ltd., Commissioner of Income Tax (LTU) Vs. Whirlpool of India Limited
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: HARPREET KAUR HANSRA
• Keywords: Condonation of delay; Set aside; Period of limitation
• Section: 254(2); 11; 12

Judgement Text

" 1 M.A Nos. 187/Del/2020 and 188/Del/2020 DCIT vs. Whirlpool of India IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘I’ NEW DELHI BEFORE S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER M. A NO. 187/Del/2020 (A.Y 2010-11) in (ITA No. 1972/Del/2015, 1787/Del/2016 and 7085/Del/2017 ) DCIT Large Tax Payer Unit, New Delhi PAN:AAACW1336L (APPLICANT) vs M/s Whirlpool of India Ltd. Plot No. 40, Sector-44, Gurgaon-1100002 PAN:AAACW1336L (RESPONDENT) M. A NO. 188/Del/2020 (A.Y 2013-14 & 2014-15) in (ITA No. 8272 & 8273/Del/2018 A.Y 2013-14 & 2014-15 ) ACIT Large Tax Payer Unit, New Delhi PAN:AAACW1336L (APPLICANT) vs M/s Whirlpool of India Ltd. Plot No. 40, Sector-44, Gurgaon-1100002 PAN:AAACW1336L (RESPONDENT) Applicant by Sh. Neeraj Jain, Adv Respondent by Ms. Harpreet Kaur Hansra, Sr. DR ORDER PER YOGESH KUMAR U.S., JUDICIAL MEMBER: Both the above Miscellaneous Applications are filed by the Departmentseeking for rectification/clarification in the order dated Date of Hearing 31.01.2025 Date of Pronouncement 21.03.2025 2 M.A Nos. 187/Del/2020 and 188/Del/2020 DCIT vs. Whirlpool of India 25/02/2019 in paragraph 7.2 and 8.4 and sought for correcting the directions issued in the final order passed by this Tribunal. 2. The above captioned MAs are filed with a delay of 365 days as per the Department of Revenue itself. An application for condonation of delay has been filed by the Department with a prayer to condone the delay of 365 days in filing the present Miscellaneous Application. As could be seen from the order of the Tribunal both the Assessee as well as the Department have been heard before passing the final order dated 18/01/2019 by the Tribunal. The miscellaneous petition filed by the Assessee is beyond the period of 6 months from 18/01/2019 and therefore the same is barred by limitation and the Tribunal has no power to condone the delay. 3. The Hon'ble Bombay High Court in the case of Bharat Petroleum Corpn. Ltd. v. ITAT [2013] 359 ITR 371/[2014] 42 taxmann.com 25, while dealing with an identical issue has held in paras 16 to 18 as under: \"16. It was next contended on behalf of the petitioner that the power of the Tribunal under section 254(2) of the Act is only to rectify an error apparent from the record. It does not empower the Tribunal to recall its earlier order dated December 6, 2007, for which the miscellaneous application was filed on August 6, 2012. It was submitted on behalf of the petitioner that the application under section 254(1) of the Act would be the only provision under which an application could be made for recall of an order, as under section 254(2) of the Act only the order can be rectified but cannot be recalled. We find that there is an error apparent on record and the miscellaneous application is to correct the error apparent from the record. 3 M.A Nos. 187/Del/2020 and 188/Del/2020 DCIT vs. Whirlpool of India The consequence of such rectification application being allowed may lead to a fresh hearing in the matter after having recalled the original order. However, the recall, if any, is only as a consequence of rectifying the original order. It is pertinent to note that section 254(2) of the Act does not prohibit the recall of an order. In fact the power/jurisdiction of the Tribunal to recall an order on rectification application made under section 254(2) of the Act is no longer res integra. The issue stands covered by the decision of the apex court in Asstt. CIT v. Saurashtra Kutch Stock Exchange Ltd. [2008] 305 ITR 227 which held that though the Tribunal has no power to review its own order, yet it has jurisdiction to rectify any mistake apparent on the face of the record and as a consequence, therefore, the Tribunal can even recall its order. In the above case, before the apex court on October 27, 2000, the Tribunal dismissed the appeal of stock exchange holding that it was not entitled to exemption under section 11 read with section 12 of the Act. On November 13, 2000, the stock exchange filed a rectification application under section 254(2) of the Act before the Tribunal. The Tribunal by its order dated September 5, 2001, allowed the application and held that there was a mistake apparent on the record which required rectification. Accordingly, the Tribunal recalled its order dated October 27, 2000, for the purpose of entertaining the appeal afresh. The Revenue filed a writ petition in the Gujarat High Court challenging the order dated September 5, 2001. The above challenge by the Revenue was turned down by the Gujarat High Court. The Revenue carried the matter in appeal to the apex court which also dismissed the appeal of the Revenue. The apex court observed that the Tribunal in its original order while dismissing the stock exchange (assessee's) appeal overlooked the binding decisions of the jurisdictional High Court. This mistake was corrected by the Tribunal under section 254(2) of the Act. The Supreme Court held that the rectification of an order stands on the fundamental principle that justice is above all and upheld the exercise of power under section 254(2) of the Act by the Tribunal in recalling its earlier order dated October 27, 2000. Thus, recall of an order is not barred on rectification application being made by one of the parties. In these circumstances, the application would be an application for rectification of the order dated December 6, 2007, and would stand governed by section 254(2) of the Act. 17. In the facts of the present case there can be no denial that the order dated December 6, 2007, suffers from an error apparent from the record. The error is in having ignored the mandate of rule 24 of the Tribunal Rules which required the Tribunal to dispose of the matter on the merits after hearing the respondents. In these circumstances, an application for rectification would be under section 254(2) of the Act. The recall of an order would well be a consequence of rectifying an order under section 254(2) of the Act. In these circumstances, we find no reason to interfere with the order of the Tribunal holding that the miscellaneous application filed by the 4 M.A Nos. 187/Del/2020 and 188/Del/2020 DCIT vs. Whirlpool of India appellant is barred by limitation under section 254(2) of the Act as it was filed beyond a period of four years from the order sought to be rectified. 18. Before concluding, we would like to make it clear that an order passed in breach of rule 24 of the Tribunal Rules, is an irregular order and not a void order. However, even if it is assumed that the order in breach of rule 24 of the Tribunal Rules is an void order, yet the same would continue to be binding till it is set aside by a competent tribunal. In fact, the apex court in the Sultan Sadik v. Sanjay Raj Subba reported in [2004] 2 SCC 377 observed as under: \"Patent and latent invalidity In a well known passage Lord Radcliffe said: 'An order, even if not made in good faith, is still an act capable at legal consequences. It bears no brand of invalidity upon its forehead. Unless the necessary proceedings are taken at law to establish the cause of invalidity and to get it quashed or otherwise upset, it will remain as effective for its ostensible purpose as the most impeccable of orders.' This must be equally true even where the 'brand of invalidity' is plainly visible: for there also the order can effectively be resisted in law only by obtaining a decision of the court.\" Further, the Supreme Court in Sneh Gupta v. Devi Sarup [2009] 16 SCC 194 has observed. \"We are concerned herein with the question of limitation. The compromise decree, as indicated herein before, even if void was required to be set aside. A consent decree as is well known, is as good as a contested decree. Such a decree must be set aside if it has been passed in violation of law. For the said purpose, the provisions contained in the Limitation Act, 1963, would be applicable. It is not the law that where the decree is void, no period of limitation shall be attracted at all.\" Therefore, in this case also the period of four years from the date of order sought to be rectified/recalled will apply as provided in section 254(2) of the Act. This is so even if it is assumed that the order dated December 6, 2006, is a void order. 19 We shall now answer the questions arising in this case as raised by us in paragraph 4 above as under : Question (a) : No. The Tribunal has no power in terms of rule 24 of the Tribunal Rules to dismiss an appeal before it for non-prosecution. Question (b) : The miscellaneous application for recall of an order falls under section 254(2) of the Act and not under section 254(1) of the Act. Question (c) : Does not arise in view of our response to query (b) above. 20. In view of the reasons given hereinabove, we find the Tribunal was correct in dismissing the miscellaneous application by its order dated April 10, 2013, as being beyond the period of four years as provided under section 254(2) of the Act. 21. Accordingly, the petition is dismissed with no order as to costs.\" 5 M.A Nos. 187/Del/2020 and 188/Del/2020 DCIT vs. Whirlpool of India 4. In view of the facts and circumstances of the case as well as the decision of the Hon'ble Bombay High Court in the case of Bharat Petroleum Corpn. Ltd. (supra), we hold that the miscellaneous applications filed by the Department are beyond the period of limitation as provided under section 254(2) and are not maintainable. Accordingly the same are deserves to be dismissed being barred by limitation. 5. Apart from the same, the Tribunal vide its final order dated 18/01/2019 has only remanded the matter to the file of the A.O./TPO to pass fresh order considering the decision of Hon'ble Supreme Court. As informed by the parties since the SLP in the case of Commissioner of Income Tax (LTU) Vs. Whirlpool of India Limited has been decided and reported in 169 taxmann.com 95 (SC). In view of the same, the present MAs are deserves to be dismissed on merits. 6. In view of the above circumstances, M.A No. 187/Del/2020 and 188/Del/2020 filed by the Department are dismissed. Order pronounced in the open court on 21st March, 2025 Sd/- Sd/- (S RIFAUR RAHMAN) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 21/03/ 2025 R.N, Sr. PS 6 M.A Nos. 187/Del/2020 and 188/Del/2020 DCIT vs. Whirlpool of India Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi "