M/S. CHITRADURGA NIRMITHI KENDRA,CHITRADURGA V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2(1), DAVANGERE

MA 63/BANG/2024

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M/s. Chitradurga Nirmithi Kendra filed a miscellaneous petition under section 254(2) of the Income Tax Act, 1961, seeking rectification of the Tribunal's order dated 20.06.2024, which dismissed their appeal due to a significant delay in filing. The Tribunal had previously heard the appeal and decided it on merits, but the appeal was dismissed at the outset due to the delay. The petitioner argued that the Tribunal did not consider crucial documents submitted that could have justified the delay and supported their case. However, the Tribunal, referencing a Supreme Court judgment, clarified that its powers under section 254(2) are limited to rectifying mistakes apparent from the record and do not extend to reviewing the merits of the case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314617 (ITAT-BANGALORE)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-05-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Other Referred Cases: Reliance Telecom Limited (2021) 133 taxmann.com 41 (SC) / (2022) 284 taxmann.com 517 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V. PARITHIVEL
• Assessee Lawyers: T. SRINIVASA
• Keywords: Condonation of delay; Reasonable cause; Competent authority
• Section: 11

Judgement Text

"MP No.63/Bang/2024 M/s. Chitradurga Nirmithi Kendra, Chitradurga IN THE INCOME TAX APPELLATE TRIBUNAL “C’’ BENCH: BANGALORE BEFORE SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER MP No.63/Bang/2024 (Arising out of ITA No.1018/Bang/2023) Assessment Year: 2012-13 M/s. Chitradurga Nirmithi Kendra Megalahalli Medehalli Post Chitradurga 577 502 PAN NO : AAALN0568J Vs. ACIT Circle-2(1) Davangere APPELLANT RESPONDENT Assessee by : Sri T. Srinivasa, A.R. Revenue by : Sri V. Parithivel, D.R. Date of Hearing : 25.04.2025 Date of Pronouncement : 07.05.2025 O R D E R PER KESHAV DUBEY, JUDICIAL MEMBER: This miscellaneous petition u/s 254(2) of the Income Tax Act, 1961 (in short “The Act”) is filed by the assessee seeking rectification of the order of Tribunal dated 20.6.2024 in ITA No.1018/Bang/2023 for the assessment year 2012-13 on the following lines: 1. The Appellant had filed the subject appeal against the order dated 23.03.2018 passed by the learned Commissioner of Income Tax (Appeals) Davanagere and the same had been listed for hearing on various dates and was finally heard on 1 1.06.2024. 2. While the subject Appeal had been initially heard on 30.01.2024 wherein the Hon'ble Bench, had made its oral observations as under: (a) That considering the facts and circumstances of the case and the contents of the Affidavit read with the contents of the special audit report (paper book page no's (55-84 to 287-288) and other documents submitted MP No.63/Bang/2024 M/s. Chitradurga Nirmithi Kendra, Chitradurga Page 2 of 6 by the Appellant there were reasonable causes for the delay in filing the Appeal: (b) That as part of the merits of the case the issue of whether the Explanation 3 to section 11 of the Income Tax Act 1961 introduced w.e.f 01.04.2019 (A.Y.2019-20) is retrospective in application requires to be addressed during the next date of hearing; (c) The Hon'ble Bench had also directed the Appellant to submit certain additional documents in support of the Appellant's claim being a society registered under the Societies Registration Act 1960 and the registration certificate issued by the competent authority etc. which the Appellant had submitted vide its submissions dated 06.02.2024 and a copy of the same is enclosed to this Application as Annexure \"A\" 3. Subsequently the subject Appeal came to be heard finally on 16.06.2024 which was duly represented by the Appellant's authorized representative and after a brief submissions, the Hon'ble was pleased to observe that due to paucity of time the case will be decided on merits, without detailed arguments from either side leading to the impression that the Appeal will be decided on merits. 4. To the surprise and disappointment of the Appellant, the Hon'ble Bench was pleased to dismiss the Appeal on the issue of delay, without referring to the documents submitted in the paper books submitted on 25.01.2024 and 06.02.2024 respectively and also the decisions relied upon by the appellant thus causing serious injustice to the Appellant necessitating filing of this Application for the kind consideration of the Hon'ble Bench to restore the subject Appeal for fresh disposal on merits in the interest of justice. 5. In the facts and circumstances, as stated above and the accompanying affidavit, the appellant most humbly pray and submit that the Hon'ble Tribunal may kindly be pleased to recall its order dated 20.06.2()24 and restore the same for fresh hearing on merits in the interest of justice. 2. Before us, ld. A.R. vehemently submitted that the Tribunal while dismissing the appeal on the issue of limitation, had not taken into consideration the documents submitted by way of paper books on 25/01/2024 and 06/02/2024 which amongst others included a copy of the special audit report and a copy of the audited annual accounts for the FY 2011-12 as well as several decisions in support MP No.63/Bang/2024 M/s. Chitradurga Nirmithi Kendra, Chitradurga Page 3 of 6 of the assessee on merits of the case as well as on condonation of delay & on account of non consideration of above stated documents the bench could not appreciate the professional negligence suffered by the assessee & accordingly prayed to recall the order dated 20/06/2024 & retore the appeal to be heard & decided on merits. 3. The ld. D.R. on the other hand strongly contended that the issue under consideration is already considered and decided by this Tribunal by not condoning the delay in filing the appeal as the assessee was not able to establish “sufficient cause” for filing the appeal belatedly before the NFAC and since the Tribunal has already dismissed the appeal by not condoning the delay, hence, the Tribunal has no jurisdiction to review its earlier order and go into the details and merits of the case already decided and further submitted that through this MA, the ld. A.R. is seeking to review the impugned order passed by the Tribunal dated 20.6.2024 after due application of mind. 4. We have heard the rival submissions and perused the materials available on record. On going through the record, we find that it is not a case that this Tribunal has not considered the documents submitted by the assessee by way of paper books on 25.01.2024 & 06.02.2024 which includes copy of the special audit report and a copy of the audited annual accounts for the FY 2011-12 as well as several decisions in support of the assessee on merits of the case as well as on condonation of delay. We are of the considered opinion that this Tribunal after taking into consideration all the submission of the assessee along with all the documents/records as well as case laws relied upon by the assessee came to the conclusion that there was no proper reasons advanced by the assessee & also the reasons advanced by the assessee is also not free from doubt as it is not supported by any positive materials to support the case of MP No.63/Bang/2024 M/s. Chitradurga Nirmithi Kendra, Chitradurga Page 4 of 6 the assessee. The Tribunal even observed that “Thus, in the present case on viewing the reasons advanced by the assessee, in our opinion, there is no proper explanation from the assessee’s side for filing the appeals belatedly before NFAC. Leave alone “sufficient cause” the fact is that no cause has been advanced by the assessee for the delay, the appeals deserves to be dismissed in limine, being barred by limitation. In our opinion, it was only negligence on the part of assessee for the above inordinate delay…” 4.1 We find that the Tribunal dismissed the appeal of the assessee in its order dated 20.06.2024 due to inordinate delay of 2006 days in filing the appeal before the NFAC as the assessee was not able to establish “sufficient cause” for filing the appeals belatedly before the NFAC after considering all the relevant facts by relying on various judgements of Hon’ble Supreme Court, Hon’ble High Courts and various decisions of the Coordinate benches of this Tribunal. Hence, we find no apparent error in the order of the Tribunal warranting any rectification on this ground. 4.2 Further, reliance is also placed on the judgement of Hon’ble Supreme Court in the case of Reliance Telecom Limited (2021) 133 taxmann.com 41 (SC) / (2022) 284 taxmann.com 517 (SC), wherein the Hon’ble Apex Cout held as follows:- \"3.1 We have considered the order dated 18-11-2016 passed by the ITAT allowing the miscellaneous application in exercise of powers under section 254(2) of the Act and recalling its earlier order dated 6-9-2013 as well as the original order passed by the ITAT dated 6- 92013. 3.2 Having gone through both the orders passed by the ITAT we are of the opinion that the order passed by the ITAT dated 18-11-2016 recalling its earlier order dated 6-9-2013 is beyond the scope and ambit of the powers under section 254(2) of the Act. While allowing the application under section 254(2) of the Act and recalling its earlier order dated 6-9-2013, it appears that the ITAT has re-heard the entire appeal on merits as if the ITAT was deciding the appeal MP No.63/Bang/2024 M/s. Chitradurga Nirmithi Kendra, Chitradurga Page 5 of 6 against the order passed by the C.I.T. In exercise of powers under section 254(2) of the Act, the Appellate Tribunal may amend any order passed by it under sub-section (1) of section 254 of the Act with a view to rectifying any mistake apparent from the record only. Therefore, the powers under section 254(2) of the Act are akin to Order XLVII Rule 1 CPC. While considering the application under section 254(2) of the Act, the Appellate Tribunal is not required to revisit its earlier order and to go into detail on merits. The powers under section 254(2) of the Act are only to rectify/correct any mistake apparent from the record. 6. None of the aforesaid grounds are tenable in law. Merely because the Revenue might have in detail gone into the merits of the case before the ITAT and merely because the parties might have filed detailed submissions, it does not confer jurisdiction upon the ITAT to pass the order de hors section 254(2) of the Act. As observed hereinabove, the powers under section 254(2) of the Act are only to correct and/or rectify the mistake apparent from the record and not beyond that.\" Even the observations that the merits might have been decided erroneously and the ITAT had jurisdiction and within its powers it may pass an order recalling its earlier order which is an erroneous order, cannot be accepted. As observed hereinabove, if the order passed by the ITAT was erroneous on merits, in that case, the remedy available to the Assessee was to prefer an appeal before the High Court, which in fact was filed by the Assessee before the High Court, but later on the Assessee withdrew the same in the instant case.” 4.3 Thus, we are of the firm opinion that section 254(2) of the Act can be invoked only with a view to rectifying any mistake apparent from record. The assessee cannot seek a review of the order passed by the Tribunal through a miscellaneous application u/s.254(2) of the Act, as held by the Hon’ble Supreme Court in the case of Reliance Telecom Limited (supra). We further clarify that if the assessee is of the opinion that the order passed by the Tribunal is erroneous either on facts or in law, in that case the only remedy available to the assessee is to prefer an appeal before the Hon’ble High Court. MP No.63/Bang/2024 M/s. Chitradurga Nirmithi Kendra, Chitradurga Page 6 of 6 5. Under the above-mentioned facts and circumstances, we do not find any error/mistake apparent on the face of record and therefore, we dismiss the miscellaneous petition filed by the assessee. 6. In the result, miscellaneous petition filed by the assessee is dismissed. Order pronounced in the open court on 7th May, 2025 Sd/- (Laxmi Prasad Sahu) Accountant Member Sd/- (Keshav Dubey) Judicial Member Bangalore, Dated 7th May, 2025. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order Asst. Registrar, ITAT, Bangalore. "