The Dy. Commissioner of Income Tax, Bathinda V. The M/s Surja Ram & Sons, Malout

MA 15/ASR/2017

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4469 (ITAT-AMRITSAR)
• Duration Of Justice: 5 year(s) 3 month(s) 20 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-05-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 15-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER M. A. No. 15/Asr/2017 (Arising out of MA No. 05/Asr/2015) (Arising out of ITA No. 08/Asr/2010) Assessment Year: 2006-07 Dy. Commissioner of Income Tax, Circle-II, Bathinda Vs. M/s Surja Ram & Sons, Kairon Road, Malout [PAN: AACFS 7229N] (Appellant) (Respondent) Appellant by : Sh. S. M. Surendranath, Sr. DR Respondent by: P. N. Arora, Adv. Date of Hearing: 22.04.2022 Date of Pronouncement: 06.05.2022 ORDER Per Dr. M. L. Meena, AM: This miscellaneous application was filed by the Revenue against the order of the Tribunal dated 20.05.2016 passed in M.A. No. 05/Asr/2015 arising out of ITA No. 08/Asr/2010 for assessment year 2006-07. 2. The Ld DR for the Department submitted that the Hon’ble ITAT, Amritsar Bench, Amritsar condoned the delay in filing the appeal against the order of Commissioner of Income Tax (Appeals), Bathinda vide its order in M.A. No. 05(ASR)/2015 and accordingly recalled the case, vide order dated 20/05/2016. He further submitted that the Hon’ble ITAT, MA No. 15/Asr/2017 DCIT v. Surja Ram & Sons 2 Amritsar Bench, Amritsar remitted the matter back to the Commissioner of Income Tax (Appeals), Bathinda to decide the issue afresh vide order dated 22/08/2016 in ITA No. 08(ASR)/2010. He contended that the Hon’ble Bench had no power to condone the delay by passing order u/s 254(2), in M.A. No. 05(ASR)/2015 dated 20.05.2016 stating that since the time limit of four years from the order of this Hon’ble Bench in ITA No. 08(ASR)/2010 dated 24.06.2010 had expired on 24.06.2014. He prayed that the order of the Tribunal u/s 254(2), in M.A. No. 05(ASR)/2015 dated 20.05.2016 is bad in law and be cancelled. 3. Per Contra, the Ld. Counsel submitted that no order for rectifying any mistake in the order u/s 254(2) can be passed u/s 254(2) and only the mistake in the order passed u/s 254(1) can be rectified u/s 254(2). He pleaded that the M.A. is liable to rejected with the support of a brief synopsis which reads as under:- 1. That according to the provision of section 254(2) the Hon’ble Bench can rectify any mistake apparent from record, amend any order passed by the Hon’ble Bench under sub-section (1) but the department in its M.A. has made a request to the Hon’ble Bench to rectify the alleged mistake in the order passed in M.A. No.05(ASR)/2015 u/s 254(2) of the IT Act, 1961. 1.1 The provisions of section 254(1) and 254(2) reads as under:- 254. (1) 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. (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 if the mistake is brought to its notice by the assessee or the [Assessing] Officer: Provided than an amendment which has the effect of enhancing an MA No. 15/Asr/2017 DCIT v. Surja Ram & Sons 3 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 1 st day of October 1998, shall be accompanied by a fee of fifty rupees.] 1.1 It is settled principle of law that no order for rectifying any mistake in the order u/s 254(2) can be passed u/s 254(2) and only the mistake in the order passed u/s 254(1) can be rectified u/s 254(2). The reliance is placed on the judgment of the Hon’ble Kerela High Court in the case of CIT vs. Aishwarya Trading Co. reported in 331 ITR 521 [Refer Page No.17 to 19 of the paper-bookl in which their Lordships observed as under:- “Tribunal was justified in refusing to entertain an application filed by the Revenue under s. 254(2) to rectify the order passed by the Tribunal in an earlier application filed by the assessee, as the second application on the very same issue is not maintainable before the Tribunal. ” Further, reliance is also placed on the Judgment of Orissa High Court in the case of Commissioner of Income Tax & ANR vs. President, Income Tax Appellate Tribunal & ORS. (Orissa) (1992) 196 ITR 83 [Refer Page No. 14 to 16 of the paper-bookl and the relevant part of the judgment on Page No.16 reads as under:- “4. Sec. 254(2) empowers the Tribunal to amend any order passed by it under subsection (1) with a view of rectifying any mistake apparent from record at any time within four years from the date of the order. Therefore, to attract applicability of section 254(2) the mistake which is sought to be rectified must be apparent from the record and the same must be in any order passed under sub-section (1) of section 254. The order referred to in S. 254(1) is one relating to an appeal filed by either assessee or Revenue. Sec. 254(1) reads as follows:- The appellate Tribunal may after giving both the parties to the appeal an opportunity of being heard pass such order thereon as it thinks fit. The appeal referred to in the provisions is one filed under s. 253. Therefore, the order which can be rectified must be one which has been passed by the Tribunal in an appeal filed under s. 253. In our view, an order rejecting an application for MA No. 15/Asr/2017 DCIT v. Surja Ram & Sons 4 rectification under s. 254(2) is not available to be rectified under s. 254(2), The same may relate to an appeal, but is not an order passed by the Tribunal under sub section (1) of s.254. As indicated above, the assessee’s application for rectification under s. 254(2) was rejected by the Tribunal. The second application was for rectification of some alleged mistakes in the said order of rejection. Section 254(2) had no application to such an order. The Tribunal was not justified in purporting to act under section 254(2) and passing the impugned order (Emphasis Supplied). In view of this we do not think it necessary to deal with the submissions relating to the dispute whether there was any rectifiable mistake apparent from the record or not.” Again, the kind attention of this Hon’ble Bench is drawn to the decision of Madras High Court in the case of Dr. S. Panneerselvam vs. ACIT reported in (2009) 319 ITR 135 in which it was held as under:- [Refer Page No.20 to 21 of the paper- book] “Any order passed under section 254(2) either allowing amendment or refusing to amend gets merged with the original order passed. The order as amended or remaining unamended is the effective order for all practical purposes. The same continues to be an order under Section254(1). That is the final order in the appeal. Successive application for rectification of the original order cannot be maintained as it will defeat the object of section 254(2). Section 254(2) provides for rectification of any mistake apparent from the order passed by it under section 254(1). Once this has been done, no further application is maintainable. Thus, where a second petition was filed for rectification of mistake after two years stating that the order of the Commissioner (Appeals) was not properly considered by the Appellate Tribunal and, therefore, rectification of the order was sought for, the rectification application was rightly dismissed by the Tribunal. ” The above said judgments have also been followed by the Special Bench of the ITAT Delhi Bench 'E' in the case of Shri Padam Parkash HUF vs. ITO [2011] 9 taxmann.com 178 in which it was held as under while following the judgments of Delhi High Court that the Tribunal has no power to adjudicate upon subsequent application filed u/s 254(2) (i) Mentha & Allied Products Co. (P.) Ltd. v. ITAT [2000] 244 ITR 470 (ii) CIT v. Kabir Das Investment Ltd. [1995] 124 CTR (Delhi) 259 MA No. 15/Asr/2017 DCIT v. Surja Ram & Sons 5 2. Alternatively since the amended law is applicable w.e.f 01-06-2016, the order u/s 254(2), could only be passed by the Hon’ble Bench upto 30.11.2016 i.e. within six months from the end of the month i.e. May 2016 in which the order u/s 254(2) in M.A. No. 05(ASR)/2015 was passed. The provisions of section 254(2) are reproduced as under: Provisions of section 254(2) as amended w.e.f. 01-06-2016 by Finance Act 2016 254. (1) The Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such order thereon as it thinks fit. (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 its under sub-section (1) and shall make such amendment if the mistake is brought to its notice by the assessee or the [Assessing] Officer: Substituted for “four years from the date of the order” by Finance Act 2016 w.e.f. 01-06-2016. In the present case, it is an admitted fact that the department submitted the M.A. on 10.01.2017 which is subsequent to the amendment u/s 254 applicable w.ef. 01/06/2016, which provides the outer limit of six months from the end of the month in which the order was passed by the appellate Tribunal and since the order in M.A. No. 05(ASR)/2015 was passed on 20/05/2016 the order u/s 254(2) if any, could be passed upto 30/11/2016 only. In view of the above stated facts and binding judicial precedents the M.A. filed by the department may kindly be dismissed.” 4. Admittedly, the department submitted this M.A. on 10.01.2017 which is subsequent to the amendment u/s 254 applicable w.ef. 01/06/2016, which provides the outer limit of six months from the end of the month in which the order was passed by the appellate Tribunal. Since, the order in M.A. No. 05(ASR)/2015 was passed dated 20/05/2016, u/s 254(2), the Tribunal could rectify the same up to 30/11/2016 only as per amended provisions of law u/s 254(2) w.e.f. 01-06-2016 by Finance Act 2016. MA No. 15/Asr/2017 DCIT v. Surja Ram & Sons 6 5. Following the Special Bench order of the ITAT Delhi Bench 'E' in the case of “Shri Padam Parkash HUF vs. ITO”, [2011] 9 taxmann.com 178 wherein following the judgments of Hon’ble Delhi High Court in the case of “CIT v. Kabir Das Investment Ltd”, (Supra) it was held that the Tribunal has no power to adjudicate upon subsequent miscellaneous application filed u/s 254(2). 6. Respectfully following the special Bench decision in “Shri Padam Parkash HUF vs. ITO”, we reject the miscellaneous application of the Revenue. 7. In the result, the miscellaneous application filed by the Revenue is dismissed. Order pronounced in the open court on 06.05.2022 Sd/- Sd/- (Anikesh Banerjee) (Dr. M. L. Meena) Judicial Member Accountant Member Date: 06.05.2022 *GP/Sr. PS* Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT(A), (4) The CIT concerned (5) The Sr. DR, I.T.A.T (6) The Guard File True Copy By Order