Dy. Commissioner of Income Tax , Circle-16(2), Hyderabad V. M/s.MTAR Technologies Private Limited, Hyderabad

MA 101/Hyd/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9785 (ITAT-HYDERABAD)
• Duration Of Justice: 1 month(s) 13 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-A
• Assessment Year: 2013-2014
• Appeal Filed On: 07-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: H HARISH
• Keywords: Period of limitation; Tax effect; Time period of passing order; Set aside
• Section: 254(2); 11

Judgement Text

MA NO 101 OF 2019 MTAR TECHNOLOGIES LTD HYDERABAD. PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER M.A. NO.101/HYD/2019 (ARISING OUT OF ITA NO.621/HYD/2018) ASSESSMENT YEAR: 2013-14 DY. COMMISSIONER OF INCOME TAX, CIRCLE 16(2) HYDERABAD VS. M/S. MTAR TECHNOLOGIES PRIVATE LIMITED, HYDERABAD PAN:AACCM2021N (APPELLANT) (RESPONDENT) REVENUE BY: SRI SUNKU SRINIVAS, DR ASSESSEE BY : SRI H. HARISH DATE OF HEARING: 13/09/2019 DATE OF PRONOUNCEMENT: 20/09/2019 ORDER PER SMT. P. MADHAVI DEVI, J.M. THIS M.A. IS FILED BY THE REVENUE SEEKING RECALL OF THE ORDER OF THE TRIBUNAL DATED 10.08.2018 WHEREIN THE REVENUES APPEAL WAS DISMISSED ON ACCOUNT OF LOW TAX EFFECT W ITH THE LIBERTY TO THE REVENUE TO SEEK RECALL OF THE ORDER IF THE A PPEALS FALL IN ANY OF THE EXCEPTIONS REFERRED TO IN THE CBDT CIRCULAR NO.3/2018 DATED 11.07.2018. THE DEPARTMENT HAS MENTIONED THAT THIS CASE FALLS UNDER THE EXCEPTIONS CATEGORY SPECIFIED IN PA RA 10(C) OF CIRCULAR NO.3/2018 DATED 11.7.2018 AND THEREFORE, S EEKS RECALL OF THE ORDER OF THE TRIBUNAL. 2. THE LEARNED COUNSEL FOR THE ASSESSEE, HOWEVER, P OINTS OUT THAT THIS M.A IS FILED BY THE REVENUE AFTER THE DUE DATE AS MA NO 101 OF 2019 MTAR TECHNOLOGIES LTD HYDERABAD. PAGE 2 OF 5 PRESCRIBED U/S 254(2) OF THE ACT AND THEREFORE, IT IS BARRED BY LIMITATION AND HAS TO BE DISMISSED AS SUCH. 3. THE LEARNED DR, HOWEVER, SUBMITTED THAT SINCE TH E CASE FALLS IN THE EXCEPTIONS REFERRED TO IN THE ABO VE CBDT CIRCULAR, A LENIENT VIEW MAY BE TAKEN AND THE APPEA L MAY BE RECALLED FOR HEARING. 4. ON HEARING BOTH THE PARTIES, WE FIND THAT U/S 25 4(2) OF THE ACT, THE M.A HAS TO BE FILED WITHIN SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE TRIBUNAL HAS PASSED THE ORDE R. THE REVENUE HAS FILED THIS M.A ALMOST AFTER 12 MONTHS F ROM THE DATE OF PASSING OF THE ORDER. THIS TRIBUNAL, IN M.A. NO. 55/HYD/2018 DATED 18.07.2018 IN THE CASE OF ACIT VS. GAYATHRI I NFRA VENTURES LTD, HAS HELD THAT THE TRIBUNAL DOES NOT HAVE THE P OWER TO CONDONE THE DELAY IN FILING OF THE M.A AND THAT THE M.A FILED BEYOND THE PERIOD OF SIX MONTHS CANNOT BE ENTERTAIN ED. FOR THE SAKE OF READY REFERENCE, RELEVANT PARAGRAPHS ARE RE PRODUCED BELOW: 5. WE FIND THAT W.E.F 1.6.2016, THE STATUTE HAS PRO VIDED ONLY A PERIOD OF SIX MONTHS FROM THE END OF THE MON TH IN WHICH THE ORDER WAS PASSED FOR FILING OF M.A. U/S 2 54(2) OF THE ACT AND THE TRIBUNAL DOES NOT HAVE THE POWER TO CONDONE DELAY IN FILING OF THE M.A BEYOND THE SAID PERIOD. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF BHARAT PETROLEUM CORPN. LTD VS. ITAT (2013) 359 ITR 371, W HILE DEALING WITH AN IDENTICAL ISSUE I.E. PERIOD OF 4 YE ARS FOR FILING OF THE APPLICATION U/S 254(2) AS WAS AVAILAB LE PRIOR TO THE AMENDMENT, HAS HELD AS UNDER: 16) IT WAS NEXT CONTENDED ON BEHALF OF THE PETITIONE R THAT THE POWER OF THE TRIBUNAL UNDER SECTION 254(2) OF THE A CT IS ONLY TO RECTIFY AN ERROR APPARENT FROM THE RECORD. IT DOES N OT EMPOWER THE TRIBUNAL TO RECALL ITS EARLIER ORDER DATED 6 DECEMBE R 2007 FOR WHICH THE MISCELLANEOUS APPLICATION WAS FILED ON 6 AUGUST 20 12. IT WAS SUBMITTED ON BEHALF OF THE PETITIONER THAT THE APPLI CATION UNDER SECTION 254(1) OF THE ACT WOULD BE THE ONLY PROVISIO N UNDER WHICH AN APPLICATION COULD BE MADE FOR RECALL OF AN ORDER , AS UNDER SECTION 254(2) OF THE ACT ONLY THE ORDER CAN BE REC TIFIED BUT CANNOT MA NO 101 OF 2019 MTAR TECHNOLOGIES LTD HYDERABAD. PAGE 3 OF 5 BE RECALLED. WE FIND THAT THERE IS AN ERROR APPAREN T ON RECORD AND THE MISCELLANEOUS APPLICATION IS TO CORRECT THE ERRO R APPARENT FROM THE RECORD. THE CONSEQUENCE OF SUCH RECTIFICATION A PPLICATION BEING ALLOWED MAY LEAD TO A FRESH HEARING IN THE MATTER AF TER HAVING RECALLED THE ORIGINAL ORDER. HOWEVER, THE RECALL, I F ANY, IS ONLY AS A CONSEQUENCE OF RECTIFYING THE ORIGINAL ORDER. IT IS P ERTINENT TO NOTE THAT SECTION 254(2) OF THE ACT DOES NOT PROHIBIT TH E RECALL OF AN ORDER. IN FACT THE POWER/JURISDICTION OF THE TRIBUNA L TO RECALL AN ORDER ON RECTIFICATION APPLICATION MADE UNDER SECTI ON 254(2) OF THE ACT IS NO LONGER RESINTEGRA. THE ISSUE STANDS COVERED BY THE DECISION OF THE APEX COURT IN ASSISTANT COMMISSIONER OF I NCOME TAX VS. SAURTASHTRA KUTCH STOCK EXCHANGE LIMITED (2008) 3 05 ITR 227 WHICH HELD THAT THOUGH THE TRIBUNAL HAS NO POWER TO REVIEW ITS OWN ORDER, YET IT HAS JURISDICTION TO RECTIFY ANY MISTAKE APPARENT ON THE FACE OF THE RECORD AND AS A CONSEQUENCE THEREFORE, T RIBUNAL CAN EVEN RECALL ITS ORDER. IN THE ABOVE CASE BEFORE THE APEX COURT ON 27 OCTOBER 2000 THE TRIBUNAL DISMISSED THE APPEAL OF STO CK EXCHANGE HOLDING THAT IT WAS NOT ENTITLED TO EXEMPTION UNDER SECTION 11 READ WITH SECTION12 OF THE ACT. ON 13 NOVEMBER 2000 THE STOCK EXCHANGE FILED A RECTIFICATION APPLICATION UNDER SE CTION 254(2) OF THE ACT BEFORE THE TRIBUNAL. THE TRIBUNAL BY ITS OR DER DATED 5 SEPTEMBER 2001 ALLOWED THE APPLICATION AND HELD THA T THERE WAS MISTAKE APPARENT ON THE RECORD WHICH REQUIRED RECTI FICATION. ACCORDINGLY, THE TRIBUNAL RECALLED ITS ORDER DATED 2 7 OCTOBER 2000 FOR THE PURPOSE OF ENTERTAINING THE APPEAL AFRESH. T HE REVENUE FILED A WRIT PETITION IN THE GUJARAT HIGH COURT CHALLENGI NG THE ORDER DATED 5 SEPTEMBER 2001. THE ABOVE CHALLENGE BY THE REVENUE WAS TURNED DOWN BY THE GUJARAT HIGH COURT. THE REVENUE CARRIED THE MATTER IN APPEAL TO THE APEX COURT WHICH ALSO DISMIS SED THE APPEAL OF THE REVENUE. THE APEX COURT OBSERVED THAT THE TR IBUNAL IN ITS ORIGINAL ORDER WHILE DISMISSING THE STOCK EXCHANGE ( ASSESSEE'S) APPEAL OVERLOOKED BINDING DECISIONS OF THE JURISDICTIO NAL HIGH COURT. THIS MISTAKE WAS CORRECTED BY THE TRIBUNAL UNDE R SECTION 254(2) OF THE ACT. THE SUPREME COURT HELD THAT THE RECTIFICATION OF AN ORDER STANDS ON THE FUNDAMENTAL PRINCIPLE THAT JUST ICE IS ABOVE ALL AND UPHELD THE EXERCISE OF POWER UNDER SECTION 254(2) OF THE ACT BY THE TRIBUNAL IN RECALLING ITS EARLIER ORDER D ATED 27 OCTOBER 2000. THUS RECALL OF AN ORDER IS NOT BARRED ON RECTIF ICATION APPLICATION BEING MADE BY ONE OF THE PARTIES. IN THE SE CIRCUMSTANCES, THE APPLICATION WOULD BE AN APPLICATI ON FOR RECTIFICATION OF THE ORDER DATED 6 DECEMBER 2007 AN D WOULD STAND GOVERNED BY SECTION 254(2) OF THE ACT. 17) IN THE FACTS OF THE PRESENT CASE THERE CAN BE NO DENIAL THAT THE ORDER DATED 6 DECEMBER 2007 SUFFERS FROM AN ERROR APP ARENT FROM THE RECORD. THE ERROR IS IN HAVING IGNORED THE MANDA TE OF RULE 24 OF THE TRIBUNAL RULES WHICH REQUIRED THE TRIBUNAL TO DI SPOSE OF THE MATTER ON MERITS AFTER HEARING THE RESPONDENTS. IN TH ESE CIRCUMSTANCES, AN APPLICATION FOR RECTIFICATION WOUL D LIE UNDER SECTION 254(2) OF THE ACT. THE RECALL OF AN ORDER W OULD WELL BE A CONSEQUENCE OF RECTIFYING AN ORDER UNDER SECTION 254 (2) OF THE ACT. IN THESE CIRCUMSTANCES, WE FIND NO REASON TO INTERFERE WITH THE MA NO 101 OF 2019 MTAR TECHNOLOGIES LTD HYDERABAD. PAGE 4 OF 5 ORDER OF THE TRIBUNAL HOLDING THAT MISCELLANEOUS APP LICATION FILED BY THE APPELLANT IS BARRED BY LIMITATION UNDER SECT ION 254(2) OF THE ACT AS IT WAS FILED BEYOND A PERIOD OF FOUR YEARS FRO M THE ORDER SOUGHT TO BE RECTIFIED. 18) BEFORE CONCLUDING, WE WOULD LIKE TO MAKE IT CLE AR THAT AN ORDER PASSED IN REACH OF RULE 24 OF THE TRIBUNAL RULES, IS AN IRREGULAR ORDER AND NOT A VOID ORDER. HOWEVER, EVEN IF IT IS ASSUMED THAT THE ORDER IN BREACH OF RULE 24 OF THE TRIBUNAL RULES IS AN VOID ORDER, YET THE SAME WOULD CONTINUE TO BE BINDING TILL IT IS SET ASIDE BY A COMPETENT TRIBUNAL. IN FACT, THE APEX COURT IN THE SULTAN SADIK V/S. SANJAY RAJ SUBBA REPORTED IN 2004(2) SCC 277 HAS OBS ERVED AS UNDER: ' PATENT AND LATENT INVALIDITY IN A WELL KNO WN PASSAGE LORD RADCLIFFE SAID : ' AN ORDER, EVEN IF NOT MADE IN GOO D FAITH, IS STILL AN ACT CAPABLE OF LEGAL CONSEQUENCES. IT BEARS NO BRAND O F INVALIDITY UPON ITS FOREHEAD. UNLESS THE NECESSARY PROCEEDINGS ARE TAKEN AT LAW TO ESTABLISH THE CAUSE OF INVALIDITY AND TO GET I T QUASHED OR OTHERWISE UPSET, IT WILL REMAIN AS EFFECTIVE FOR ITS OSTENSIBLE PURPOSE AS THE MOST IMPECCABLE OF ORDERS.' THIS MUST BE EQUALLY TRUE EVEN WHERE THE BRAND OF INVALIDITY IS PLAINLY V ISIBLE, FOR THERE ALSO THE ORDER CAN EFFECTIVELY BE RESISTED IN LAW ONLY BY OBTAINING A DECISION OF COURT.' FURTHER THE SUPREME COURT IN SNEH GUPTA V/S. DEV SA RUP (2009) 6 SCC 194 HAS OBSERVED 'WE ARE CONCERNED HEREIN WITH THE QUESTION OF LIMIT ATION. THE COMPROMISE DECREE, AS INDICATED HEREIN BEFORE, EVEN IF VOID WAS REQUIRED TO BE SET ASIDE. A CONSENT DECREE AS IS WE LL KNOWN, IS AS GOOD AS A CONTESTED DECREE. SUCH A DECREE MUST BE SET ASIDE IF IT HAS BEEN PASSED IN VIOLATION OF LAW. FOR THE SAID PURPOSE, THE PROV ISIONS CONTAINED IN LIMITATION ACT 1963 WOULD BE APPLICABLE. IT IS NOT THE LAW THAT WHERE THE DECREE IS VOID, NO PERIOD OF LIMITATION SHALL BE AT TRACTED AT ALL.' THEREFORE, IN THIS CASE ALSO THE PERIOD OF FOUR YEAR S FROM THE DATE OF ORDER SOUGHT TO BE RECTIFIED/RECALLED WILL APPLY AS PROVIDED IN SECTION 254(2) OF THE ACT. THIS IS SO EVEN IF IT IS A SSUMED THAT THE ORDER DATED 6 DECEMBER 2006 IS A VOID ORDER. 19) WE SHALL NOW ANSWER THE QUESTIONS ARISING IN THIS C ASE AS RAISED BY US IN PARAGRAPH 4 ABOVE AS UNDER: QUESTION(A): NO. THE TRIBUNAL HAS NO POWER IN TERMS O F RULE 24 OF THE TRIBUNAL RULES TO DISMISS AN APPEAL BEFORE IT FOR NON PROSECUTION. QUESTION(B): THE MISCELLANEOUS APPLICATIO N FOR RECALL OF AN ORDER FALLS UNDER SECTION 254(2) OF THE ACT AN D NOT UNDER SECTION 254(1) OF THE ACT. QUESTION(C): DOES NOT ARISE IN VIEW OF OUR RESPONSE TO QUERY (B) ABOVE. 20) IN VIEW OF THE REASONS GIVEN HEREIN ABOVE, WE FI ND THE TRIBUNAL WAS CORRECT IN DISMISSING THE MISCELLANEOUS APPLICATION BY ITS ORDER MA NO 101 OF 2019 MTAR TECHNOLOGIES LTD HYDERABAD. PAGE 5 OF 5 DATED 10 APRIL 2013 AS BEING BEYOND THE PERIOD OF F OUR YEARS AS PROVIDED UNDER SECTION 254(2) OF THE ACT. 21) ACCORDINGLY, THE PETITION IS DISMISSED WITH NO ORD ER AS TO COSTS. THIS DECISION WAS FOLLOWED BY THE COORDINATE BENCH OF THE TRIBUNAL AT JAIPUR IN THE CASE OF VINOD SINGH, JAIPUR VS. ITO, JAIPUR DATED 6.2.2018 IN MA NO.12/JP/2018 IN ITA NO.454/JP/2015, WHEREIN UNDER SIMILAR CIRCUMSTANCES AS IN THE CASE BEFORE US, THE M.A FI LED BEYOND THE LIMITATION PERIOD OF SIX MONTHS WAS DISMISSED. IN VIEW OF THE SAME, WE ARE CONSTRAINED TO DISMISS THE MISCELLANEOUS APPLICATION AS BARRED BY LIMITATION. 5. FURTHER, THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF SHRI MUNI NAGA REDDY VS. ACIT IN WRIT PETITION N O.25553 OF 2018 DATED 12.07.2018 ALSO HAS HELD THAT THE TRIBUN AL CANNOT CONDONE THE DELAY IN FILING OF THE MISCELLANEOUS AP PLICATION U/S 254(2) OF THE ACT. 6. RESPECTFULLY FOLLOWING THE SAME, THE MISCELLANEO US APPLICATION FILED BY THE REVENUE IS DISMISSED. 7. IN THE RESULT, M.A. FILED BY THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH SEPTEMBER, 2019. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED SEPTEMBER, 2019. VINODAN/SPS COPY TO: 1 DY. CIT, CIRCLE 16(2) HYDERABAD 2 M/S. MTAR TECHNOLOGIES (P) LTD NO.18 TECHNOCRAT I NDUSTRIAL ESTATE, BALANAGAR, HYDERABAD 500037 3 CIT (A)-4 HYDERABAD 4 PR. CIT 4 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER