INCOME TAX OFFICER, WARD 2(4), THANE, THANE V. GHEVARCHAND M. SURANA, THANE

MA 58/MUM/2025

AI Insights

The case involves the Income Tax Department (revenue) filing a Miscellaneous Application (MA) under section 254(2) of the Income Tax Act, 1961, seeking rectification of a previous Tribunal order which had dismissed an earlier MA due to limitation issues. The revenue contended that the order was communicated later than recorded, thus extending the time limit for filing the MA. However, the Tribunal, referencing a precedent where it was established that an MA cannot be filed against an order passed on an earlier MA, dismissed the application. The Tribunal emphasized that the power under section 254(2) does not extend to rectifying orders passed under the same section.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 780365 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 29 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-10-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 07-03-2025
• Other Referred Cases: Mohini D. More vs. ITO, The PCIT vs. Smt. Alpana Bhartia, SHRI.PADMA PRAKASH v/s ITO
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHASHANK MEHTA
• Assessee Lawyers: KRISHNA KUMAR
• Keywords: Business income; Opportunity of being heard; Question of law; Rectification of order

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI ANIKESH BANERJEE, JM & MS PADMAVATHY S, AM M.A. No. 58/Mum/2025 (Arising out of MA No.197/Mum/2024) (Assessment Year: 2009-10) ITO, Ward-2(4), Room No. 25, B Wing, 6th Floor, Ashar IT Park, Wagle Industrial Estate,, Thane (W), Maharashtra-400604. Vs. Shri Ghevarchand. M. Surana, 203, B-3, Sector-4, Mira Road (E), Thane, Maharashtra-401107. PAN: AAJPS6676B Appellant) : Respondent) Revenue / Appellant by : Shri Krishna Kumar, Sr. DR Assessee / Respondent by : Shri Shashank Mehta, Adv. Date of Hearing : 19.09.2025 Date of Pronouncement : 06.10.2025 O R D E R Per Padmavathy S, AM: This Miscellaneous Application (MA) is filed under section 254(2) of the Income Tax Act, 1961 (the Act) by the revenue seeking rectification of the order of the Tribunal in MA No. 197/Mum/2024 dated 03.10.2024 for AY 2009-10. 2. The revenue had in earlier filed MA No. 197/Mum/2024 arising out of the order of the Tribunal in ITA No. 2641/Mum/2023. The Tribunal has dismissed the MA filed by the revenue on the ground that there was a delay in filing the MA by Printed from counselvise.com 2 M.A No.58/Mum/2025 Shri Ghevarchand. M. Surana the revenue. The Tribunal decided the issue based on the factual report of the ITAT Registry stating that the order was received by the revenue on 30.11.2023 and therefore the MA filed on 05.08.2024 was dismissed on the ground of limitation. 3. Now the revenue has once again has filed the present MA stating that the order of the Tribunal was communicated to the PCIT-1, Thane on 26.02.2024 and that the time limit for filing the MA would expire only on 31.08.2024. Accordingly, it is contended by the revenue that the earlier MA filed by the revenue on 05.08.2024 is well within the prescribed limit and that the decision of the Tribunal dismissing the MA on the ground of limitation is a mistake within the meaning of section 254(2) of the Act. 4. We heard the parties and perused the material on record. We notice that the present MA of the revenue is filed against the earlier MA passed by the Co- ordinate Bench dated 03.10.2024 i.e. the revenue has filed an MA against the earlier MA order of the Tribunal. In this regard, we notice that the Co-ordinate Bench in the case of Mohini D. More vs. ITO (MA No. 23/Mum/2020 dated 22.07.2022) has considered the issue of whether there can be an MA filed against an order of MA and held that “6. We heard the parties in respect of the present miscellaneous application. The Ld A.R submitted that the unaccounted cash deposits found in the bank accounts represent business receipts and hence the profit element involved therein should have been assessed. Accordingly, she submitted that the Tribunal has committed an error in confirming the addition made @ 100% of the deposits. The Ld D.R, on the contrary, submitted that the Tribunal has already expressed the view that miscellaneous application cannot lie upon the order passed against earlier miscellaneous application. The Tribunal has also held that the prayer of the assessee would result in review of the order passed by the Tribunal in the appeal, which is not permitted u/s 254(2) of the Act. Printed from counselvise.com 3 M.A No.58/Mum/2025 Shri Ghevarchand. M. Surana 7. We have earlier extracted the orders passed by the Tribunal against the first miscellaneous application (MA No.507/Mum/2019) and the second miscellaneous application (MA No.284/Mum/2020). In the order passed against the first M A, the Tribunal has expressed the view that the assessee is seeking review of the order passed by it. In the order passed against the second miscellaneous application, the Tribunal has also expressed the view that a miscellaneous application against another M A is not maintainable. 8. The Hon’ble Karnataka High Court had the occasion to consider the question whether a miscellaneous petition u/s 254(2) of the Act could be filed against the order passed u/s 254(2) of the Act on an earlier miscellaneous petition in the case of The PCIT vs. Smt. Alpana Bhartia (ITA No.847 of 2018 dated 25.03.2019. The decision rendered by Hon’ble jurisdictional High Court are extracted below:- “5. On hearing the learned counsel for the appellants Revenue and on perusal of the appeal papers including the detailed order passed by the Tribunal, we are of the view that no substantial question of law would arise to entertain the appeal. The assessee as well as her husband had filed ITA Nos.855 and 856 of 2016 before the Tribunal against the addition of Rs.5,98,40,617/- to their individual assessment. Addition of the said amount could not have been made to both assessee and assessee’s husband for the purpose of taxation. But, the Tribunal had dismissed the appeals of both assessee and her husband confirming the order passed by the CIT (A). The assessee filed Misc. petition 178 of 2016 under Section 254(2) of the Act to rectify the mistake apparent on record in respect of the assessee on the ground that addition of income has been made to both assessee as well as her husband, which would amount to double addition. The Tribunal, in exercise of its power under Section 254(2) of the Act rectified the mistake and deleted the addition of income of Rs.5,98,40,617/- made to the assessee. The Revenue filed Misc.Petition 35 of 2018 under Section 254(2) against the order passed under Section 254(2) in Misc. Petition No.178 of 2017, contending that there is a mistake apparent on record and sought to rectify the same. The Tribunal rightly dismissed the Misc. petition holding that the Misc. petition to rectify the mistake in Misc. Petition would not be maintainable. While rejecting, the Tribunal relied on the decision of the Special Bench of the Tribunal in SHRI.PADMA PRAKASH v/s ITO. 6. Section 254 (1) and (2) of the Act reads as follows: 254(1) The Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. Printed from counselvise.com 4 M.A No.58/Mum/2025 Shri Ghevarchand. M. Surana 254(2) The Appellate Tribunal may, at any time within six months from the end of the month in which the order was passed, 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. Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub-section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard. Provided further that any application filed by the assessee in this subsection on or after the 1st day of October 1998, shall be accompanied by a fee of fifty rupees.” 7. Section 253 of the Act provides an appeal to the Appellate Tribunal, which would be considered under Section 254 of the Act. Section 254(1) contemplates hearing of the appeal by the Appellate Tribunal and passing of the order thereon. Sub-section (2) of Section 254 of the Act would empower the Tribunal to rectify any mistake apparent from the record, amend any order passed under sub-section (1), if the mistake is brought to its notice by the parties to the proceedings, within six months from the end of the month in which the order was passed. From a reading of sub-section (2) of Section 254, it would be clear that the Tribunal possesses the power to rectify any mistake apparent on the record in the order passed by it under sub Section (1). If the order under sub-section (2) of Section 254 is passed, the said order would not be available for rectification of mistake again under Section 254 (2) of the Act. The order passed under Section 254(2) cannot be rectified nor amended by invoking sub-section (2) of Section 254 once again. Repetitive applications under Section 254 (2) of the Act are not permissible. In the case on hand also, the Tribunal in exercise of its power under sub-section (2) of Section 254 has rectified the mistake apparent on the record and deleted the double addition of income in respect of the assessee. Thereafter, the Revenue again files an application under subsection (2) of Section 254 seeking rectification of the order passed under subsection (2) of Section 254 which is not maintainable. The Tribunal has rightly dismissed the Misc. petition filed by the Revenue. There is no error or omission in the order passed by the Tribunal.” 9. The present miscellaneous application has been filed by the assessee seeking recall of the order passed against the earlier miscellaneous application, which, in turn, had been filed seeking recall of the order passed against the first miscellaneous application. The power granted to the Tribunal u/s 254(2) would Printed from counselvise.com 5 M.A No.58/Mum/2025 Shri Ghevarchand. M. Surana be to correct mistake apparent from record in the order passed u/s 254(1) of the Act. It does not extend to rectify the order passed u/s 254(2) of the Act. Hence the present miscellaneous application filed against the order passed against an earlier miscellaneous application is liable to be rejected. In any case, the Tribunal has already expressed the view in the order passed against the first miscellaneous application that the relief sought by the assessee results in review of the order, which is not permitted u/s 254(2) of the Act. 10. For the detailed reasons discussed above, we reject the present miscellaneous application filed by the assessee. 5. The facts in the present appeal being identical to the above facts, respectfully following the above decision of the Co-ordinate Bench we hold that the review of MA order is not permitted under section 254(2) of the Act and accordingly the present MA is dismissed. 6. In result the MA filed by the revenue is dismissed. Order pronounced in the open court on 06-10-2025. Sd/- Sd/- (ANIKESH BANERJEE) (PADMAVATHY S) Judicial Member Accountant Member *SK, Sr. PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. 5. Guard File CIT BY ORDER, (Dy./Asstt. Registrar) ITAT, Mumbai Printed from counselvise.com "