Smt. B.C. Pratima, Mysore V. Income Tax Officer, Ward 1(3), Mysore

MA 170/BANG/2018

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6994 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 17-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 20-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R N SIDDAPPAJI IT AT BENGALURU
• Assessee Lawyers: DR B S N PRASAD
• Keywords: Opportunity of being heard; Period of limitation; Retrospective amendment; Right to appeal
• Section: 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI JASON P. BOAZ , ACCOUNTANT MEMBER M.P. NO.170/BANG/2018 [IN I TA NO. 1543/BANG/2014] ASSESSMENT YEAR : 2008 - 09 SMT. B.C. PRATHIMA, 2708, NEAR CITB CHOULTRY, HEBBAL II STAGE, MYSURU 570 016. PAN: AQGPP 4368L VS. THE INCOME TAX OFFICER, WARD 1(3), MYSORE. APPL IC ANT RESPONDENT APPL IC ANT BY : DR. B.S.N. PRASAD, ADVOCATE RE SPONDENT BY : SHRI R.N. SIDDAPPAJI, ADDL .CIT(DR)(IT AT), BENGALURU. DATE OF HEARING : 03 .0 8 .201 8 DATE OF PRONOUNCEMENT : 1 7 .08.2018 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS IS A MISCELLANEOUS PETITION FILED BY THE ASS ESSEE PRAYING FOR AN ORDER RECALLING THE ORDER DATED 08.05.2015 DISMISSI NG THE AFORESAID APPEAL FOR NON-PROSECUTION. 2. THE ASSESSEE HAD FILED THE AFORESAID APPEAL AGA INST THE ORDER OF CIT(APPEALS) DATED 06.06.2014 BEFORE THE TRIBUNAL O N 12.12.2014. THE ACKNOWLEDGEMENT PROVIDED BY THE REGISTRY AT THE TIM E OF FILING OF APPEAL BY THE ASSESSEE CLEARLY SPECIFIES THE DATE OF HEARING OF APPEAL AS 30.04.2015. M.P. NO.170/BANG/2018 PAGE 2 OF 6 ON 30.04.2015 NONE APPEARED ON BEHALF OF THE ASSESS EE AND THEREFORE THE TRIBUNAL DISMISSED THE APPEAL OF THE ASSESSEE FOR N ON-PROSECUTION. 3. THIS MISCELLANEOUS PETITION HAS BEEN FILED BY T HE ASSESSEE ON 20.06.2018. THE REGISTRY HAS RAISED AN OBJECTION S AYING THAT THE APPEAL IS TIME BARRED BY 937 DAYS. APPARENTLY, THE REGISTRY HAS GONE BY THE AMENDMENT TO THE PROVISIONS OF SECTION 254(2) OF TH E INCOME-TAX ACT, 1961 [THE ACT] BY THE FINANCE ACT, 2016 W.E.F. 1.6.201 6 WHICH LAYS DOWN THE PERIOD OF LIMITATION AS SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER WAS PASSED. SECTION 254(2) OF THE ACT OF 196 1 PRIOR TO THE AMENDMENT BY THE FINANCE ACT, 2016 W.E.F.1.6.2016 R EADS AS UNDER:- 254(2) THE APPELLATE TRIBUNAL MAY, AT ANY TIME WITHIN FOUR YEARS FROM THE DATE OF THE ORDER, WITH A VIEW TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD, AMEND ANY ORDER P ASSED BY IT UNDER SUB-SECTION (1), AND SHALL MAKE SUCH AMENDMEN T IF THE MISTAKE IS BROUGHT TO ITS NOTICE BY THE ASSESSEE OR THE ASSESSING OFFICER: PROVIDED THAT AN AMENDMENT WHICH HAS THE E FFECT OF ENHANCING AN ASSESSMENT OR REDUCING A REFUND OR OTH ERWISE 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 ALLO WED THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD AFTER THE AMENDMENT BY THE FINANCE ACT, 2016, W.E.F . 1.6.2016, SEC.254(2) READ AS UNDER:- 254(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 FR OM THE RECORD, AMEND ANY ORDER PASSED BY IT UNDER SUB-SECT ION (1), AND SHALL MAKE SUCH AMENDMENT IF THE MISTAKE IS BROUGHT TO ITS NOTICE BY THE ASSESSEE OR THE ASSESSING OFFICER: IT CAN BE SEEN FROM THE AFORESAID AMENDMENT THAT TH E TIME LIMIT FOR FILING MISCELLANEOUS APPLICATION U/S.254(2) HAS BEEN CURTA ILED TO 6 MONTHS FROM M.P. NO.170/BANG/2018 PAGE 3 OF 6 THE DATE OF THE PASSING OF THE ORDER FROM A PERIOD OF 4 YEARS FROM THE DATE OF THE ORDER. 4. THE ADMITTED FACTS IN THE PRESENT M.A. ARE THAT THE ORDER AGAINST WHICH THE PRESENT M.A. IS BEING FILED WAS PASSED PR IOR TO 1.6.2016 I.E., ON 8.5.2015, AND THE APPLICATION U/S.254(2) IN RESPECT OF SUCH ORDER IS FILED AFTER 1.6.2016. THE QUESTION BEFORE US IS AS TO WH ETHER IN RESPECT OF ORDERS PASSED PRIOR TO 1.6.2016 AND WHERE M.A. U/S.254(2) IN RESPECT OF SUCH ORDERS IS FILED AFTER 1.6.2016, WHETHER THE TIME LI MIT PRESCRIBED U/S.254(2) PRIOR TO THE AMENDMENT BY FINANCE ACT, 2016 SHOULD APPLY OR THE TIME LIMIT PRESCRIBED AFTER THE AMENDMENT BY FINANCE ACT, 2016 SHOULD APPLY? 5. THE HONBLE MADHYA PRADESH COURT IN WRIT PETITI ON NO.4144/2017 IN THE CASE OF DISTRICT CENTRAL CO-OP. BANK LTD., R AISEN VS. UNION OF INDIA VIDE ITS JUDGMENT DATED 09TH OCTOBER, 2017 HAD TO D EAL WITH AN IDENTICAL CASE SUCH AS THE ASSESSEE. THE HONBLE COURT RELIE D ON THE DECISION OF THE APEX COURT IN THE CASE OF M. P. STEEL CORPORATION VS. COMMISSIONER OF CENTRAL EXCISE REPORTED IN (2015) 7 SCC 58 WHEREIN IT WAS HELD THAT THOUGH PERIODS OF LIMITATION, BEING PROCEDURAL LAW, ARE TO BE APPLIED RETROSPECTIVELY, YET IF A SHORTER PERIOD OF LIMITATION IS PROVIDED BY A LATER AMENDMENT TO A STATUTE, SUCH PERIOD WOULD RENDER THE VESTED RIGHT OF ACTION CONTAINED IN THE STATUTE NUGATORY AS SUCH RIGHT OF ACTION WOULD NOW BECOME TIME BARRED UNDER THE AMENDED PROVISION. THEREFORE A STATUTE W HICH WHILE PROCEDURAL IN ITS CHARACTER, IF IT AFFECTS VESTED RIGHTS ADVER SELY IT HAS TO BE CONSTRUED AS PROSPECTIVE. FOLLOWING THE AFORESAID VIEW, THE HONBLE M.P. HIGH COURT HELD AS FOLLOWS:- 08. KEEPING IN VIEW THE JUDGMENT REFERRED BY THEIR LORDSHIPS IN THE AFORESAID CASE AND THE JUDGMENT DELIVERED BY TH EIR LORDSHIPS IN THE M.P. STEEL CORPORATION (SUPRA), IN THE PRESE NT CASE ALSO THE NEW LAW OF LIMITATION PROVIDING A SHORTER PERIOD CA NNOT CERTAINLY EXTINGUISH A VESTED RIGHT OF ACTION. M.P. NO.170/BANG/2018 PAGE 4 OF 6 09. THE AMENDMENT HAS BEEN MADE EFFECTIVE VIRTUALLY IN CASE OF ASSESSEE WITH RETROSPECTIVE EFFECT THOUGH THE AMEND MENT DOES NOT SHOW THAT IT IS APPLICABLE WITH RETROSPECTIVE EFFEC T, HOWEVER, THE EXISTING RIGHT HAS BEEN EXTINGUISHED WITH RETROSPEC TIVE EFFECT IN CASE OF THE ASSESSEE. 10. IN THE CONSIDERED OPINION OF THIS COURT, THE LE GISLATURE SHOULD HAVE GRANTED SOME TIME TO THE ASSESSEES WHO COULD H AVE FILED AN APPEAL WITHIN A PERIOD OF FOUR YEARS AND THE SAME H AS NOT BEEN DONE TILL THE AMENDMENT CAME INTO FORCE EXTINGUISHI NG THE RIGHT TO FILE AN APPEAL. 11. IN THE CONSIDERED OPINION OF THIS COURT, APPLIC ATION PREFERRED BY THE ASSESSEE SHOULD NOT HAVE BEEN DISMISSED BY T HE TRIBUNAL ON ACCOUNT OF THE AMENDMENT WHICH HAS REDUCED THE P ERIOD OF LIMITATION OF FOUR YEARS TO SIX MONTHS. 12- RESULTA NTLY, THE IMPUGNED ORDER PASSED BY THE RESPONDENT ON 23/12/20 16 IS HEREBY QUASHED AND THE WRIT PETITION STANDS ALLOWED . THE INCOME TAX APPELLATE TRIBUNAL IS DIRECTED TO DECIDE THE AP PLICATION PREFERRED UNDER SECTION 254(2) ON MERITS WITHIN A P ERIOD OF THREE MONTHS FROM THE DATE OF RECEIPT OF CERTIFIED COPY O F THIS ORDER. THE PARTIES SHALL APPEAR BEFORE THE TRIBUNAL ON 30T H OF OCTOBER, 2017. 6. FOLLOWING THE AFORESAID DECISION, WE HAVE TO HO LD THAT THE PRESENT MA THOUGH FILED AFTER 1.6.2016 WILL CONTINUE TO BE GOVERNED BY THE LAW OF LIMITATION LAID DOWN U/S.254(2) ON THE DATE WHEN TH E ORDER AGAINST WHICH THE MA IS SOUGHT TO BE FILED WAS PASSED AND NOT LAW AS PER THE LAW AS AMENDED BY THE AMENDMENT W.E.F. 1.6.2016. THE MA TH EREFORE HAS TO BE CONSTRUED AS ONE FILED WITHIN THE PERIOD OF LIMITAT ION AND HAS TO BE ACCEPTED AS VALIDLY PRESENTED WITHIN THE PERIOD OF LIMITATIO N. THE OBJECTION OF THE REGISTRY IS THEREFORE HELD TO BE NOT IN ACCORDANCE WITH LAW. 7. AS FAR AS THE MERITS OF THE MA IS CONCERNED, IT HAS BEEN STATED BY THE ASSESSEE IN AN AFFIDAVIT FILED BEFORE US THAT S HE HAD APPOINTED SHRI K.S. SESHADRI, CA BASED IN MYSORE AS THE AR. ON HIS ADV ICE, ONE SHRI P.C. M.P. NO.170/BANG/2018 PAGE 5 OF 6 CHADAGA, PRACTICING IN BANGALORE AS AN ITP WAS ENGA GED TO FILE THE APPEAL. MR. CHADAGA DID NOT INFORM THE ASSESSEE AB OUT THE HEARING DATES NOR DID HE APPEAR BEFORE THE TRIBUNAL ON THE GIVEN DATE. IT WAS ONLY WHEN THE AO ISSUED A NOTICE FOR IMPOSING PENALTY U/S. 27 1(1)(C) OF THE ACT DATED 11.09.2017 THAT THE ASSESSEE ON VERIFICATION FROM M R. CHADAGA CAME TO KNOW ABOUT THE DISMISSAL OF THE APPEAL OF ASSESSEE. THE ASSESSEE HAS SUBMITTED THAT THERE WERE NO MALAFIDES ON HER PART IN NOT ATTENDING THE HEARING BEFORE THE TRIBUNAL. IT HAS ALSO BEEN SUBM ITTED THAT SHRI CHADAGA PLEADED OLD AGE AND ILL-HEALTH AS REASONS FOR NOT A TTENDING THE PROCEEDINGS BEFORE THE TRIBUNAL AND SHRI K.S. SESHADRI, CA, WHO ORIGINALLY REPRESENTED THE ASSESSEES CASE HAD MIGRATED TO USA. 8. WE HAVE PERUSED THE REASONS GIVEN FOR THE FAIL URE OF THE ASSESSEE TO APPEAR ON THE DATE OF HEARING AND ARE SATISFIED THAT THERE WAS A REASONABLE AND SUFFICIENT CAUSE FOR THE ASSESSEES FAILURE TO APPEAR ON THE DATE WHEN THE APPEAL WAS FIXED FOR HEARING. WE, TH EREFORE, RECALL THE ORDER DATED 08.05.2015 AND FIX THE APPEAL FOR HEARING ON MERITS ON 28.08.2018. THE DATE OF HEARING WAS ANNOUNCED IN THE OPEN COURT AND IT WAS MADE CLEAR TO THE PARTIES THAT NO FRESH NOTICE OF HEARIN G WOULD BE ISSUED. 9. IN THE RESULT, THE MISCELLANEOUS PETITION FILED BY THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 17 TH DAY OF AUGUST, 2018. SD/- SD/- ( JASON P. BOAZ ) ( N.V. VASUDEVAN ) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED, THE 17 TH AUGUST, 2018. / D ESAI S MURTHY / M.P. NO.170/BANG/2018 PAGE 6 OF 6 COPY TO: 1. THE APP LIC ANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6 . GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.