Jagannath Construction V. Union of India and others

WP(C)/18745/2022

AI Insights

M/s. Jagannath Construction filed a writ petition challenging the order dated 24.06.2022 by the Income Tax Appellate Tribunal, Cuttack, which recalled and restored the order dated 25.04.2017 for re-adjudication concerning Section 40(a)(ia) of the Income Tax Act. The petitioner argued that the Tribunal had become functus officio after the final disposal of the matter in 2017. However, the respondent, represented by the IT Department, contended that the Tribunal retained jurisdiction to rectify mistakes under Section 254(2) of the Act, especially after the withdrawal of an appeal by the Department due to the low tax effect as per CBDT Circular No. 3/2018. The High Court found no merit in the petitioner's arguments and dismissed the writ petition, allowing the Tribunal's order to stand.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 800316 (HC-CUTTACK)
• Appeal Type: Others
• Pronouncement Date: 24-06-2024
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax v. Reliance Telecom Ltd., 2021 SCC OnLine SC 1170
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: J M PATTANAIK
• Keywords: Functus Officio; Income tax appellate tribunal; Rectification of mistake; Section 254(2); Section 40(a)(ia)
• Section: 254(2); 40(a)(ia)

Judgement Text

" Page 1 of 4 IN THE HIGH COURT OF ORISSA, AT CUTTACK W.P.(C) No.18745 of 2022 M/s. Jagannath Construction ….. Petitioner Mr. J. M. Pattanaik, Advocate Vs. Union of India and others ….. Opposite Parties Mr. S.C. Mohanty, Sr. Standing Counsel, I.T. CORAM: DR. JUSTICE B.R. SARANGI MR. JUSTICE G. SATAPATHY ORDER 24.06.2024 Order No. 06. This matter is taken up through hybrid mode. 2. Heard Mr. J.M. Pattanaik, learned counsel for the petitioner and Mr. S.C. Mohanty, learned Sr. Standing Counsel, I.T. Department. 3. The petitioner has filed this writ petition seeking to quash the order dated 24.06.2022 passed by the Income Tax Appellate Tribunal, Cuttack Bench, Cuttack in M.A. No. 34/CTK/2017, by which the Tribunal observed that there is a mistake apparent on record in the order on the issue of Section 40 (a)(ia) of the Act and accordingly recalled and restored the same to its file for re- adjudication. 4. Mr. J.M. Pattaniak, learned counsel for the petitioner contended that after final disposal of the matter on 25.04.2017 in ITA No. 147/CTK/2016, the Tribunal has become functuous officio and, therefore, the order impugned dated 24.06.2022 passed in M.A. No. 34/CTK/2017 cannot be sustained in the eye of law and accordingly, seeks for quashing of the same. 5. Mr. S.C. Mohanty, learned Sr. Standing Counsel, I.T. Page 2 of 4 Department vehemently contended that the order dated 25.04.2017 passed by the Tribunal in ITA No. 147/CTK/2016 was challenged by the Department in ITA No. 24 of 2017. While the matter was so pending before this Court for adjudication, finding some mistake in the said order the authorities filed a Misc. Case bearing M.A. No. 34/CTK/2017 before the said Tribunal for recalling of the order dated 25.04.2017 passed in ITA No. 147/CTK/2016. Accordingly, the ITA No. 24 of 2017 filed before this Court was dismissed as withdrawn on the ground that the appeal involves less tax effect than the prescribed limit as per Circular No. 3/2018 issued by the CBDT, New Delhi dated 11.07.2018. After disposal of the ITA, the MA which was filed by the Department bearing MA No. 34/CTK/2017 for rectification of the mistake was heard by the Tribunal and order impugned was passed on 24.06.2022 by recalling the original order dated 25.04.2017 and posted the matter for final hearing. Thereby, no illegality or irregularity has been committed by the Tribunal while passing the order, which does not require any interference by this Court. 6. Having heard learned counsel for the parties and after going through the record, this Court finds that there is no dispute before this Court that after due adjudication, ITA No. 147/CTK/2016 was disposed of on 25.04.2017 by the Tribunal, which was challenged by the Department in ITA No. 24 of 2017 before this Court. When the matter was pending before this Court finding the mistake, which can be corrected in view of Section 254 (2) of the IT Act, 1961, an application was filed by the Department, registered as M.A. No. 34/CTK/2017, requesting the Tribunal to exercise the jurisdiction under Section 254 (2) of the Act by giving opportunity of hearing to all the parties. Thereafter ITA No. 24 of 2017 which was filed by the Page 3 of 4 department before this Court was dismissed as withdrawn on the prayer of the Department that the demand in question is less than the prescribed limit as per the CBDT Circular No. 3/2018 dated 11.07.2018. After the ITA No. 24 of 2017 was withdrawn, the MA which had been filed by the Department before the Tribunal was pursued and the impugned order dated 24.06.2022 was passed, wherein it has been specifically observed by the Tribunal that there is a mistake apparent on record in the order on the issue of Section 40 (a)(ia) of the Act and consequentially the same was recalled and restored to file for re-adjudication by the Tribunal and the matter was posted for regular hearing by affording opportunity to all the parties. 7. The contention of learned counsel for the petitioner that though he has relied on the judgment of the apex Court in the case of Commissioner of Income Tax v. Reliance Telecom Ltd., 2021 SCC OnLine SC 1170, but without considering the same, the order impugned has been passed by the Tribunal. But fact remains when the mistake pointed out by the Department was considered and the matter was restored to its file and the appeal is to be considered afresh by giving due opportunity of hearing, therefore, the judgment relied on by the petitioner has also to be taken note of by the Tribunal. Therefore, no prejudice is caused to the petitioner if appeal is heard afresh. The further contention was raised that after the final order was passed on 25.04.2017, which was subject matter of challenge before this Court in ITA No. 24 of 2017, the Tribunal is functuous officio, but fact remains Section 254 (2) of the IT Act permits the parties to file application for rectification. If such rectification application is allowed, the question of the Tribunal becoming fuctuous officio does not arise. 8. In that view of the matter when the appeal is restored to its file Page 4 of 4 after considering the application filed under Section 254 (2) of the Act itself, which empowers the court to pass an order for rectification of the mistake, in that case no prejudice is caused to the petitioner, rather the petitioner has to cooperate before the appellate Tribunal for early disposal of the matter. 9. In view of the above, this Court is not inclined to interfere with the order impugned. Accordingly, the writ petition merits no consideration and stands dismissed. Arun (DR. B.R. SARANGI) JUDGE (G. SATAPATHY) JUDGE Digitally Signed Signed by: ARUN KUMAR MISHRA Designation: ADR-cum-Addl. Principal Secretary Reason: Authentication Location: High Court of Orissa Date: 27-Jun-2024 15:47:46 Signature Not Verified "