ITO, WARD -5(2), PATNA V. M/S MAHENDRA PRASAD(HUF), PATNA

MA 14/PAT/2019

AI Insights

The case involves a miscellaneous application filed by the revenue to rectify an earlier order concerning block assessment for the assessment years 1991-92 to 2001-02 against M/s Mahendra Prasad (HUF). The revenue sought rectification on the grounds that the original decision was contrary to the provisions of Section 158BB(1) of the Income Tax Act, 1961, and that the ITAT had dismissed the department's appeal without considering the exceptional provisions under Part 8 of the Circular. However, the application was filed beyond the statutory six-month period, leading to its dismissal due to lack of jurisdiction to condone the delay.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 633354 (ITAT-PATNA)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-06-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: misc
• Other Referred Cases: Rambaburao Salve vs. 162 taxmann.com 354 (Bombay), Arvindbhai H. Shah vs. 91 ITD 101 (Ahmedabad ITAT (SB)), Bhillai Engg. Corpn. Ltd. v. Dy. CIT [2002] 81 ITD 282, Boota Mal v. Union of India AIR 1962 SC 1716
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Reasonable cause; Period of limitation; Block assessment; Time period of passing order

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “DB” BENCH: PATNA VIRTUAL HEARING AT KOLKATA Įी Ĥदȣप क ुमार चौबे, ÛयाǓयक सदèय एवं Įी संजय अवèथी, लेखा सटèय क े सम¢ [Before Shri Pradip Kumar Choubey, Judicial Member &Shri Sanjay Awasthi,Accountant Member] M. A. No. 14/PAT/2019 (Arising out of I.T.(S.S).A. No. 32/PAT/2016) Assessment Year: 1991-92 to 2001-02 ITO, Ward-5(2), Patna Vs. M/s Mahendra Prasad (HUF) (PAN: AABHM 6772 N) Appellant / ) अपीलाथȸ ( Respondent / Ĥ×यथȸ Date of Hearing / सुनवाई कȧ Ǔतͬथ 16.05.2025 Date of Pronouncement/ आदेश उɮघोषणा कȧ Ǔतͬथ 10.06.2025 For the assessee / Ǔनधा[ǐरती कȧ ओर से Shri Sudipta Sannigrahi, CA For the revenue / राजèव कȧ ओर से Sh. Ashwani Kr. Singal, JCIT ORDER / आदेश Per Pradip Kumar Choubey, JM: The present miscellaneous application has been filed by the revenue to rectify the order dated 08.08.2018 passed in IT(S.S) A No. 32/PAT/2016 (wrongly mentioned 33/Pat) on the following grounds. The decision is against the expressed provision of the Act has laid down in Section 158BB(1) which provides that such other materials or 2 MA No. 14/PAT/2019 (Arising out of I.T.(S.S).A. No. 32/PAT/2016 Assessment Year: 1991-92 to 2001-02 Mahendra Prasad (HUF) information as available with AO and relatable to such evidence can be the basis of block assessment. The further ground is that Hon’ble ITAT dismissed the appeal of the department just relying upon the monetary limit and not considering the appellate order on the ground of exceptional provision under Part 8 of the Circular regarding challenging the validity of provision of I.T. Act, 1961. 2. At the very outset, it has come to the knowledge of the bench that miscellaneous application has been filed after the statutory limit prescribed in the Section 254(2) of the Act. The Ld. Counsel in its petition has stated as under: “Due to increased work load of ward and other work load of DDO side, slight delay in filing the M.A took place which is deeply regretted and it is further requested that in future I shall be more vigilant and will not allow any delay to take place. In the above background, your kindself is requested to condone the delay and admit the MA for rectification.” 3. Right at the outset, it needs to be decided whether the ITAT has the powers to condone the delay in cases were a Miscellaneous Application (hereafter “MA”) has been filed beyond the limitation period of six months from the date of order (which is the subject of the said MA). To appreciate the legal position in this regard, we need to refer to the section as under: “254 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. (1A) [***] (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 of the mistake is brought to its notice by the assessee or the Assessing Officer: 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 sub-section on or after the 1st day of October. 1998, shall be accompanied by a fee of fifty rupees]………………….” 4. It is clear that the time frame for filing an MA was reduced from four years to six years by the Finance Act, 2016 and thereby in this case since the ITAT’s order is 3 MA No. 14/PAT/2019 (Arising out of I.T.(S.S).A. No. 32/PAT/2016 Assessment Year: 1991-92 to 2001-02 Mahendra Prasad (HUF) dated 08.08.2018, an MA has been filed on 011.03.2019. Thus, a plain reading of the section itself reveals that not only is the present MA time barred but, more importantly, the Tribunal has no discretion for condoning any delay in the matter. A review of judicial precedents on the subject reveals as under: (a) In the case of Rambaburao Salve reported in 162 taxmann.com 354 (Bombay), it has been categorically held that the Tribunal had no power to condone the delay in filing of the MA. (b) In the case of Arvindbhai H. Shah reported in 91 ITD 101 (Ahmedabad ITAT (SB), the Special Bench of ITAT has dwelt at length on this issue. Some extracts from the said order deserve to be mentioned: “The object of providing limitation in a statute is to expect litigants to be diligent in seeking remedies in Courts of law or from statutory authorities. It is to secure the quiet and repose of the community that litigation should not be in a state of constant uncertainty, doubt and suspense. ‘Interest reipublicae ut sit finis litium’. The interests of the State requires that a period should be put to terminate all litigations. Yet another consideration is that a party who is insensible to the value of civil remedies and who does not assert his own claim with promptitude has little or no right to require the aid of the State in enforcing it ‘Vigilantibus - non dormientibus jura subveniunt’. The law assists the vigilant and not those who sleep over their rights. These principles are not mere technical rules of procedure but based on principles of public policy aiming at justice, the principles of repose and peace. Long dormant claims have often more of cruelty than of justice in them. The scope of the principles of justice beyond limitation of time cannot be enlarged. It should be restricted to the claim made within statutory period as otherwise it may amount to cruelty rather than justice to violate the statutory period and attempting granting relief beyond statutory period itself would be contrary to rendering justice rather doing injustice. [Para 31] Section 254(2) envisages two situations under which the Tribunal is to rectify its order through amendment, namely, the Tribunal (a) may, at any time within four years from the date of the order, with a view of rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1); and (b) shall make such amendment if the mistake is brought to its notice by the assessee or the Assessing Officer. Thus, the Tribunal is required to carry out activity of rectification through amendment of order under section 254(1) if besides limitation, the other condition of there being a mistake apparent from record is satisfied. In both the situations mentioned above, the activity of rectification is required to be carried within a period of four years. No order, after four years can be amended through, rectification. The argument that no period of limitation is provided where order of amendment is passed in situation (b) is erroneous and is based on misreading of a clear statutory provision. [Paras 10 and 11] 4 MA No. 14/PAT/2019 (Arising out of I.T.(S.S).A. No. 32/PAT/2016 Assessment Year: 1991-92 to 2001-02 Mahendra Prasad (HUF) The Nagpur Bench in Bhillai Engg. Corpn. Ltd. v. Dy. CIT [2002] 81 ITD 282 had taken into consideration four aspects of the matter - (1) that the use of the word ‘may’ after the words ‘the Appellate Tribunal’ indicates that the power to rectify on its own is implied; (2) that, therefore, the time-limit of 4 years is for suo motu rectification and not when prayed for by either of the party, (3) that the delay of the counsel in making application for rectification is a reasonable cause and the Tribunal can condone the same; and (4) that justice should be done even if the heaven falls and the cause of justice should not be subservient to the rules of procedure. The Nagpur Bench was influenced by the zeal of doing justice which they thought should be done even if the heaven falls and by the fact that the delay in making application was on account of the counsel of the assessee which was also thought fit to be condoned. This was contrary to the verdict of the Supreme Court in Boota Mal v. Union of India AIR 1962 SC 1716, wherein it was held that though the fixation of period of limitation may sometimes result in hardship but on that account there should be no resort to a consideration of equitable principles. Strict grammatical meaning of the words of the provisions appear to be the only safeguard. As per Maxwell in Interpretation of Statutes, 17th edn., page 9 ‘it is the primary rule of interpretation of statutes that where the language is plain and admits of but one meaning, the task of interpretation can hardly be said to arise’. Interpretation of statutes is not to be collected from any notions which may be entertained by the Court as to what is just and expedient. Words are not to be construed as embracing or excluding cases merely because no good reason appears as to why they should not be embraced or excluded. Thus, the provisions of limitation like any other provisions must receive a construction which the language on its plain meaning imports. [Paras 15, 27 and 28] If the view of the Nagpur Bench was taken as correct, there would be flood gate of miscellaneous applications and the orders passed even by the First President of the Tribunal given in 1940 could be rectified today or in the years to come or for time immemorial on the application of either party. No order could ever be final if that view is upheld. Such a view would lead to chaos. That could never be the intention of the Legislature. [Para 17] In the said circumstances, when a period of limitation of four years is provided under section 254(2) for rectifying an order, no rectification can be made after that period on the principle of equity and justice or on the basis of theory that justice should be done, even if heaven falls, as even period of limitation is part of the jurisprudence and cannot be brushed aside or ignored to grant relief on the prayer of the assessee or revenue after the expiry of said period of four years. [Para 25]” The Hon’ble Special Bench has unhesitatingly arrived at the conclusion that there is no power to condone any delay when it is a matter to be dealt with u/s 254(2) of the Act. 5. Considering the discussion above, and an admitted fact that present Miscellaneous application has been filed not within stipulated time, tribunal has no power to condone the delay, the miscellaneous application filed by the revenue is dismissed on account of limitation. 5 MA No. 14/PAT/2019 (Arising out of I.T.(S.S).A. No. 32/PAT/2016 Assessment Year: 1991-92 to 2001-02 Mahendra Prasad (HUF) In the result, the miscellaneous application filed by the revenue is dismissed. Order is pronounced in the open court on 10th June, 2025 Sd/- Sd/- (Sanjoy Awasthi/संजय अवèथी) (Pradip Kumar Choubey /Ĥदȣप क ुमार चौबे) Accountant Member/लेखा सदèय Judicial Member/ÛयाǓयक सदèय Dated: 10th June, 2025 SM, Sr. PS Copy of the order forwarded to: 1. Appellant- ITO, Ward-5(2), Patna 2. Respondent – M/s Mahendra Prasad (HUF), Karta of M/s Mahendra PD (HUF), IAS Colony, Bailley Road, Danapur, Patna. 3. Ld. CIT(A)- 3, Patna 4. Ld. PCIT- , Patna 5. DR, Patna Bench, Patna True Copy By Order Assistant Registrar/Sr. Private Secretary ITAT, Kolkata Benches, Kolkata "