MULKRAJ G. CHARAYA, MUMBAI V. ITO 18(3)(3), MUMBAI

ITA 8813/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49012 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-05-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 16-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATBIR SINGH
• Assessee Lawyers: ARUN SATHE
• Keywords: Opportunity of being heard; Period of limitation; Set aside
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B MUMBAI BEFORE SHRI R V EASWAR, PRESIDENT & SHRI T R SOOD, AM ITA NO. 8813/MUM/2010 (ASST YEAR 2005-06) MULKRAJ G CHARYA A/202 HAMERSMITH INDL ESTATE SITLADEVI TEMPLE ROAD MAHIM (W) MUMBAI 400 016 VS THE INCOME TAX OFFICER WARD 18(3)(3), MUMBAI (APPELLANT) (RESPONDENT) PAN NO.AAAPC7621B APPELLANT BY: SHRI ARUN SATHE RESPONDENT BY: S HRI SATBIR SINGH/CIT-DR ORDER PER T R SOOD, AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER PASSED U/S 263 BY THE CIT-18, MUMBAI RELATING TO AY 2005-06. 2 IT SEEMS THAT ON EARLIER HEARING, IT WAS NOTICED BY THE BENCH THAT REVISIONARY ORDER PASSED U/S 263 HAD BEEN RECEIVED BY THE ASSESSEE ON 7.1.2010 AND THE APPEAL HAS BEEN FILED ON 16.12.2010 AND THE N WHY IT SHOULD NOT BE TREATED BARRED BY LIMITATION AND THE LD COUNSEL WAS DIRECTED TO EXPLAIN. 3. THE LD COUNSEL FOR THE ASSESSEE FILED CONDONATIO N PETITION ALONG WITH AFFIDAVIT. BEFORE REFERRING TO THE PETITION, HE MAI NLY ARGUED THAT REVISION ORDER WAS PASSED ON 5.1.2010 BUT IT MENTIONED THE ASSESSM ENT YEAR AS 2004-05 WHEREAS IN THE NOTICE THE YEAR UNDER CONSIDERATION WAS AY 2005-06. THEREFORE, THE ASSESSEE WAS UNDER THE IMPRESSION THAT IT IS NO T THE CORRECT ORDER AND THE ASSESSEE CANNOT BE SAID TO HAVE BEEN SERVED WITH TH E PROPER ORDER AND 2 THEREFORE, NO CONSTRUCTIVE NOTICE CAN BE SAID TO BE THERE. IN ANY CASE, THE ASSESSEE HAS FILED THE APPEAL WITHIN THE DUE TIME F ROM THE DATE OF ORDER OF THE CORRIGENDUM WHICH HAS BEEN PASSED ON 20.10.2010. R ELIANCE WAS PLACED ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF PETLAD BULAKHIDAS MILLS CO LTD VS RAJ SINGH REPORTED IN 37 ITR 264. 3.1 ON THE OTHER HAND, THE LD DR SUBMITTED THAT COR RIGENDUM ORDER WOULD RELATE BACK TO THE ORIGINAL ORDER; THEREFORE, LIMIT ATION WOULD START FROM THE ORIGINAL DATE OF SERVICE. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS CAREFULL Y, IN OUR OPINION, THERE IS NO DELAY IN FILING THE APPEAL. THE RULE THAT A CORRIGE NDUM CORRECTING THE MISTAKE IN TYPING THE CORRECT ASSESSMENT YEAR IN THE ORDER WOU LD RELATE BACK TO THE ORIGINAL ORDER IS NOT WITHOUT ITS LIMITS AND ONE SUCH LIMIT IS THAT THOUGH IT MAY RELATE BACK TO THE DATE OF THE ORDER, THE ASSESSEE GETS ACTUAL KNOWLEDGE OF THE ORDER [WITH THE CORRECT ASSESSMENT YEAR MENTIONED THEREIN] ONLY WHEN THE CORRIGENDUM IS SERVED ON HIM AND THEREFORE FOR THE PURPOSE OF RECK ONING THE PERIOD OF LIMITATION FOR FILING THE APPEAL, IT IS THE DATE ON WHICH THE CORRIGENDUM IS SERVED ON THE ASSESSEE THAT SHOULD BE THE STARTING POINT. TO HOLD OTHERWISE THAT IS, TO HOLD THAT THE DATE OF SERVICE OF THE ORDER CONTAINING TH E MISTAKE [IN MENTIONING THE CORRECT ASSESSMENT YEAR] WOULD STILL BE THE STARTIN G POINT FOR THE PURPOSE OF COUNTING LIMITATION FOR FILING THE APPEAL WOULD BE UNFAIR TO THE ASSESSEE AND WOULD BE OPPOSED TO THE FUNDAMENTAL RULES OF NATURA L JUSTICE. IT IS ONLY WHEN THE CORRIGENDUM IS SERVED THAT THE ASSESSEE OBTAINS ACT UAL KNOWLEDGE THAT THE ORDER EARLIER SERVED ON HIM REALLY RELATES TO THE CORRECT ASSESSMENT YEAR AGAINST WHICH HE OUGHT TO FILE AN APPEAL. TO HOLD OTHERWISE WOULD ALSO GIVE RISE TO GRAVE CONSEQUENCES. THE RIGHT OF AN ASSESSEE TO FILE AN A PPEAL WITHIN TIME MAY BE 3 THWARTED BY DELIBERATELY TYPING THE WRONG ASSESSMEN T YEAR IN THE ORDER AND SERVING THE SAME ON THE ASSESSEE AND THEN SERVE A C ORRIGENDUM ON HIM AFTER A PERIOD OF 60 DAYS FROM THE DATE OF SERVICE OF THE E RRONEOUS ORDER, SO THAT THE APPELLANT WOULD BE PUT TO EXPLAIN THE DELAY AND RUN NING THE RISK OF THE APPEAL ITSELF NOT BEING ADMITTED FOR ADJUDICATION. THE JUD GMENT OF THE HON'BLE BOMBAY HIGH COURT CITED BY MR. SATHE APPLIES FULLY TO THE PRESENT CASE. THE OBSERVATIONS MADE BY THE HON'BLE CHIEF JUSTICE AT PAGE 265 OF TH E JUDGMENT THROW LIGHT ON THE GRAVE CONSEQUENCES THAT MAY FOLLOW IF ANY OTHER VIEW IS TAKEN. THE RATIO OF THE JUDGMENT, IN OUR HUMBLE UNDERSTANDING, IS THAT AN ORDER REFERRED TO IN SEC.253(1)(A) OF THE IT ACT MEANS AN ORDER OF WHICH THE ASSESSEE HAS ACTUAL OR CONSTRUCTIVE NOTICE. IN THE CASE BEFORE US, THERE I S NO QUESTION OF ANY CONSTRUCTIVE NOTICE SINCE THE CIT[A] DID NOT INFORM THE ASSESSEE THAT HE WOULD BE PRONOUNCING HIS ORDER ON ANY PARTICULAR DATE SO THAT IT CAN BE SAID THAT THE ASSESSEE OUGHT TO HAVE BEEN PRESENT ON THAT DATE. H E GOT ACTUAL NOTICE OF THE ORDER FOR ASSESSMENT YEAR 2005-06 ONLY WHEN THE COR RIGENDUM WAS SERVED ON HIM. THEREFORE THE ORDER AGAINST WHICH HE COULD H AVE APPEALED AGAINST WAS THE ONE ORIGINALLY PASSED [CONTAINING A MISTAKE] RE AD WITH THE CORRIGENDUM ISSUED LATER CORRECTING THE ERROR. 5. THE LEARNED COUNSEL FOR THE ASSESSEE HAS FILED A N APPLICATION FOR CONDONATION OF THE DELAY BY WAY OF ABUNDANT CAUTION . IN OUR VIEW, SINCE THERE IS NO DELAY IN THE FIRST PLACE THERE IS NO NEED TO EXA MINE WHETHER THERE EXISTS SUFFICIENT CAUSE FOR ANY DELAY. 6. THE FIRST ISSUE RAISED BEFORE US IS THAT THE ORD ER IS BARRED BY LIMITATION. NO DOUBT, SECTION 263 (2) PROVIDES FOR LIMITATION O F TWO YEARS FROM THE END OF FINANCIAL YEAR IN WHICH THE ORDER IS SOUGHT TO BE R EVISED WAS PASSED. IN THIS CASE 4 THE ASSESSMENT ORDER WAS PASSED ON 10.9.2007 WHICH WOULD MEAN THAT LIMITATION FOR PASSING ORDER U/S 263 WOULD EXPIRE O N 31.3.2010. THE ORIGINAL ORDER U/S 263 HAS BEEN PASSED ON 5.1.2010 BUT IN TH E SAME THE ASSESSMENT YEAR MENTIONED AS AY 2004-05. THE MAIN SUBMISSION OF THE LD COUNSEL FOR THE ASSESSEE IS THAT SINCE THE YEAR IS MENTIONED AS AY 2004-05; THEREFORE, IT IS NOT A VALID ORDER. ACCORDING TO HIM, THE CORRIGENDUM ORD ER WHEREIN THE CORRECT ASSESSMENT YEAR HAS BEEN MENTIONED AS AY 2005-06 AN D WAS PASSED ON 20,.10.2010 WHICH IS BEYOND THE TIME ALLOWED U/S 26 3(2) AND THEREFORE, THAT LIMIT SHOULD BE RECKONED. 7. THE LD DR MAINLY ARGUED THAT THE CORRECT ORDER W OULD ALWAYS RELATE BACK TO THE ORIGINAL ORDER AND IT IS PURELY BECAUSE OF M ISTAKE THAT THE AY WAS ORIGINALLY MENTIONED AS AY 2004-05 AND THEREFORE, D ATE OF ORDER U/S 263 IS REQUIRED TO BE RECKONED AS 5.1.2010. 8. WE AGREE WITH THE SUBMISSION OF THE LD DR THAT I T IS BECAUSE BY PURE MISTAKE THAT THE AY HAS BEEN ORIGINALLY MENTIONED A S AY 2004-05 INSTEAD OF AY 2005-06 FOR WHICH NOTICE WAS ISSUED; THEREFORE, THE DATE OF THE ORDER U/S 263 HAS TO BE RECKONED FOR LIMITATION PURPOSE AS 5.1.20 10 WHICH IS WELL WITHIN THE LIMIT PRESCRIBED U/S 263(2) AND THEREFORE, THIS GRO UND IS REJECTED. 9. THE ORDER U/S 263 HAS BEEN PASSED WITHOUT GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN FACT THE AFFIDA VIT OF SHRI DINSH GADA HAS BEEN FILED IN WHICH IT IS STATED THAT HEARING IN THE PRO CEEDINGS U/S 263 WAS ADJOURNED AT HIS REQUEST TO 30.12.2009 AT 11 AM AND BECAUSE T HE REPRESENTATIVE WAS BUSY IN APPEARING IN TIME BARRING MATTERS AND COULD NOT ATTEND THE OFFICE AT 11 AM AND ATTENDED AT 2 PM AND IT WAS INFORMED THAT THE O RDER HAS ALREADY BEEN PASSED. 5 10. BOTH THE PARTIES MADE DETAILED ARGUMENTS ON MER ITS AND EVEN SOME CASE LAWS WERE ALSO CITED. HOWEVER, WE ARE OF THE OPINIO N THAT NO PROPER OPPORTUNITY HAS BEEN GIVEN BY THE LD CIT. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED U/S 263 AND REMIT THE MATTER BACK TO HIS FILE FOR RE-AD JUDICATION OF THE ISSUE AFTER CONSIDERING THE REPRESENTATION WHICH MAY BE MADE BE FORE HIM. NEEDLESS TO SAY THAT LD CIT SHALL GIVE ADEQUATE OPPORTUNITY OF BEIN G HEARD TO THE ASSESSEE FOR PRESENTING HIS CASE. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 20/5/2011. SD/- ( R V EASWAR ) SD/- ( T R OOD ) PRESIDENT ACCOUNTANT MEMBER PLACE: MUMBAI: DATED: 20/5/MAY 2011 P/-*