THE DCIT, 1(1), Indore V. SMT. RENUDEVI NACHANI, Indore

MA 27/Ind/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 0569 (ITAT-INDORE)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 06-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S S DESHPANDE
• Keywords: Rectification of order; Question of law; Tax effect; Condonation of delay
• Section: 153A; 254(2)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER MA NO.27/IND/2020 ASSESSMENT YEAR 2007-08 DCIT 1(1), INDORE / VS. SM T. RENUDEVI NACHANI, 614, USHA NAGAR EXTENSION, NARENDRA TIWARI MARG, INDORE ( REVENUE ) ( APPELLANT ) P.A. NO. AAZPN2263P APPELLANT BY SHRI S.S. DESHPANDE, C.A REVENUE BY S HRI HARSHIT BARI , SR. DR DATE OF HEARING: 11.12.2020 DATE OF PRONOUNCEMENT: .01.2021 / O R D E R PER KUL BHARAT, J.M: THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE PRAYING RECALLING OF THE ORDER DATED 21.08.2019 IN IT(SS)A NO.76/IND/2016 PERTAINING TO ASSESSMENT YEAR 2007-08. 2. LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT T HE APPEAL OF THE REVENUE WAS DISMISSED ON THE GROUND OF LOW TAX EFFECT. HOWEVER THE APPEAL FALLS IN THE EXEMPTION CLAUSE. SMT. RENUDEVI NACHANI M.A.NO.27/IND/2020 2 3. LD. COUNSEL FOR THE ASSESSEE HAS FILED WRITTEN S YNOPSIS DATED 05.11.2020. THE CONTENTS OF THE SAME ARE REPRODUCE D BELOW:- THE ABOVE MISCELLANEOUS APPLICATION HAS BEEN FILED BY THE DEPARTMENT SEEKING RECOURSE FROM CLAUSE 10(G) OF THE CIRCULAR WHICH CREATES EXCEPTION STATING 'CASES WHERE ORGANIZED TAX EVASIO N SEAM IS NOTICED THROUGH BOGUS L TCG ON PENNY STOCK. THE DEPARTMENT HAS RAISED THE GROUND 3 ABOUT PENNY STOCK COMPANY. THE LD. CIT(A) HAS NOT DECIDED THIS GROUND ON MERITS BUT HAS ALLOWED THE ASSESSEE' S APPEAL ON THE GROUND THAT THERE IS NO INCRIMINATING MATERIAL FOUN D DURING THE COURSE OF SEARCH AND THERE IS NO REFERENCE TO ANY DOCUMENT/MA TERIAL FOUND AS A RESULT OF SEARCH ACTION. IN VIEW OF THIS THE ASSESS MENT U/S 153A CANNOT BE UPHELD. THUS, THERE IS NO DECISION ON THE POINT OF L TCG ON PENNY STOCK. IN VIEW OF THIS THE CLAUSE 10(G) OF THE CIRCULAR CANNOT BE INVOKED. THEREFORE, THERE IS NO MISTAKE IN THE ORDER OF THE HON'BLE TRIBUNAL. THE PETITION THEREFORE DESERVES TO BE DISMISSED. WITHOUT PREJUDICE TO THE ABOVE CONTENTIONS, IT IS S UBMITTED THAT THE PETITION IS BARRED BY LIMITATION. THE ORDER WAS PAS SED BY THE HON'BLE TRIBUNAL ON 21/08/2019 AND THE SAME WAS RECEIVED ON 30/12/2019. THUS, THERE IS A DELAY IN FILING THE MISCELLANEOUS PETITI ON. THE SAME HAS BEEN FILED BEYOND 6 MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER IS PRONOUNCED. THERE IS NO PROVISION FOR CONDONATION O F DELAY IN FILING THE MISCELLANEOUS APPLICATION. IN THIS CONNECTION, ATTE NTION IS DRAWN TO THE DECISION OF THE HON'BLE PUNE BENCH IN MA NO. 67/PUN /20 18 IN THE CASE OF DC IT VS. VEENA INDUSTRIES LTD. PRONOUNCED ON 04 .02.2019. 4. LD. DEPARTMENTAL REPRESENTATIVE OPPOSED THE SUBM ISSION. 5. WE HAVE HEARD RIVAL SUBMISSIONS OF BOTH THE PART IES. LD. COUNSEL FOR THE ASSESSEE HAS TAKEN AN OBJECTION REG ARDING LIMITATION IT IS STATED THAT THE PRESENT MISC. APPLICATION IS BARRED BY TIME AS THE ORDER SOUGHT TO BE RECTIFIED WAS PASSED ON 21 ST AUGUST 2019 AND THE SAME WAS RECEIVED ON 30.12.2019. THE PRESEN T MISC. APPLICATION IS FILED ON 5 TH JULY 2020. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE MISC. APPLICATION IS FILED BEYON D SIX MONTH FROM THE END OF THE MONTH IN WHICH THE ORDER WAS PRONOUN CED. HE SMT. RENUDEVI NACHANI M.A.NO.27/IND/2020 3 CONTENDED THAT THERE IS NO PROVISION OF CONDONATION OF DELAY IN FILING MISC. APPLICATION. LD. COUNSEL FOR THE ASSESSEE HA S PLACED RELIANCE ON THE DECISION OF THE COORDINATE BENCH OF THIS TRI BUNAL RENDERED IN MISC. APPLICATION 67/PUN/2018 IN THE CASE OF DCI T VS. VEENA INDUSTRIES LTD. THE TRIBUNAL HAS HELD AS UNDER: 8. IT IS A TRITE LAW THAT TRIBUNAL HAS NO JURISDICT ION TO CONDONE DELAY IN FILING OF MISCELLANEOUS APPLICATION U/S. 2 54(2) OF THE ACT. IN THIS CONTEXT IT WOULD BE RELEVANT TO MENTIO N THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF RAJA MALWINDER SINGH VS. UNION OF INDIA & ANR. REPORTED AS 278 ITR 568 AND THE DECISION OF DELHI BENCH OF TRIBUNAL IN THE MA NO. 67/PUN/2018, A.Y. 2010-11 CASE OF RAHUL JEE & CO. ( P) LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX REPORTED A S 120 ITD 481. SIMILAR VIEW HAS BEEN TAKEN BY THE CO-ORDINATE BENCH OF TRIBUNAL IN THE CASE OF SHRI KASTURILAL SARDARILAL LUTHRA VS. DY. COMMISSIONER OF INCOME TAX IN MA NO. 38/PUN/2017 AR ISING OUT OF ITA NO. 923/PUN/2011 FOR ASSESSMENT YEAR 200 3-04 DECIDED ON 04-04-2018. THUS, IN VIEW OF THE FACTS A ND THE CASE LAWS DISCUSSED ABOVE, THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE IS DISMISSED IN LIMINE, BEING BARRED BY LIMITATION. 6. RELIANCE IS ALSO PLACED ON THE DECISION OF CO-OR DINATE BENCH IN THE CASE OF RAHUL JEE & CO. (P.) LTD. VS. ACIT 120 ITD 481, THE RELEVANT CONTENTS ARE REPRODUCED AS UNDER: 10. NOW LET US EXAMINE WHETHER THE DELAY IN FILING APPLICATION SEEKING RECTIFICATION CAN BE CONDONED UNDER THE PRO VISIONS OF THE LIMITATION ACT, 1963. SECTION 5 OF THE LIMITATI ON ACT PROVIDES FOR THE EXTENSION OF THE PRESCRIBED PERIOD IN CASE OF ANY APPEAL OR ANY APPLICATION OTHER THAN AN APPLICATION UNDER ANY OF THE PROVISIONS OF ORDER XXI OF THE CODE OF CIVIL PROCED URE, 1908 IF THE APPELLANT OR THE APPLICANT SATISFIES THE COURT THAT HE HAD SUFFICIENT CAUSE FOR NOT PREFERRING THE APPEAL OR M AKING THE APPLICATION WITHIN SUCH PERIOD. IT IS A SETTLED LAW THAT THE WORD COURT IN SECTION 5 OF THE LIMITATION ACT SIGNIFIES A COURT IN STRICT SENSE. IN SAKURU V. TANAJI AIR 1985 HON'BLE SUPREME SMT. RENUDEVI NACHANI M.A.NO.27/IND/2020 4 COURT 1279, IT IS HELD THAT THE PROVISION OF THE LI MITATION ACT 1963 APPLY ONLY TO PROCEEDINGS IN COURTS AND NOT T O APPEAL OR APPLICATIONS BEFORE BODIES OTHER THAN COURTS SUCH A S QUASI- JUDICIAL TRIBUNALS OR EXECUTIVE AUTHORITIES NOTWITH STANDING THE FACTS SUCH BODIES OR AUTHORITIES MAY BE VESTED WITH CERTAIN SPECIFIED POWERS CONFERRED ON COURTS UNDER THE CODE OF CIVIL PROCEDURE. IN SUKHDEO V. STATE OF UP AIR 1992 ALL. ACQUISITION ACT BEFORE COLLECTOR ARE NOT PROCEEDINGS IN COURTS AND HENCE THE PROVISIONS OF SECTION 5 OF LIMITATION ACT DO NO T APPLY. THEREFORE THE PROVISIONS OF SECTION 5 OF LIMITATION ACT CANNOT BE APPLIED TO THE ORDER PASSED BY THE TRIBUNAL, A QUAS I-JUDICIAL AUTHORITY. 11. LD. AR OF THE ASSESSEE HAS PLACED RELIANCE ON S EVERAL DECISIONS REFERRED TO ABOVE IN SUPPORT OF HIS CONTE NTION THAT DELAY IN FILING OF APPLICATION FOR RECTIFICATION DA TED 15.10.2006 SHOULD BE CONDONED. WE HAVE GONE THROUGH THE RATIOS OF THE DECISIONS REFERRED BY THE LD. AR OF THE ASSESSEE CA REFULLY. IT IS NOT CLEAR UNDER WHAT CONTEXT THESE DECISIONS WERE R ENDERED. IT IS ALSO NOT CLEAR WHETHER RELEVANT STATUTE UNDER W HICH THE SAID DECISIONS WERE RENDERED CONTAINED PROVISIONS RELATI NG TO LIMITATION OR WERE GOVERNED BY THE PROVISION OF THE LIMITATION ACT 1963. NO SUCH INFORMATION HAS BEEN PROVIDED IN THIS REGARD BY THE LD. COUNSEL OF THE ASSESSEE. MOREOVER AS POINTE D OUT BY THE LD. SR. DR THAT THE RATIO OF A DECISION CANNOT BE A PPLIED WITHOUT REFERENCE TO THE CONTEXT UNDER WHICH THE SAME WAS R ENDERED. WE ARE INCLINED TO AGREE WITH HER IN THIS REGARD. H ON'BLE SUPREME COURT IN THE CASE OF SUN ENGINEERING WORKS( P.) LTD. (SUPRA) AT PAGE 320 OBSERVED AS UNDER: IT IS NEITHER DESIRABLE NOR PERMISSIBLE TO PICK OUT A WORD OR A SENTENCE FROM THE JUDGMENT OF THIS COURT, DIVORCED FROM THE CONTEXT O F THE QUESTION UNDER CONSIDERATION AND TREAT IT TO BE THE COMPLETE 'LAW' DECLARED BY T HIS COURT. THE JUDGMENT MUST BE READ AS A WHOLE AND THE OBSERVATIONS FROM THE JUDGM ENT HAVE TO BE CONSIDERED IN THE LIGHT OF THE QUESTIONS WHICH WERE BEFORE THIS COURT . A DECISION OF THIS COURT TAKES ITS COLOUR FROM THE QUESTIONS INVOLVED IN THE CASE IN W HICH IT IS RENDERED AND WHILE APPLYING THE DECISION TO A LATER CASE, THE COURTS M UST CAREFULLY TRY TO ASCERTAIN THE TRUE PRINCIPLE LAID DOWN BY THE DECISION OF THIS CO URT AND NOT TO PICK OUT WORDS OR SENTENCES FROM THE JUDGMENT, DIVORCED FROM THE CONT EXT OF THE QUESTIONS UNDER CONSIDERATION BY THIS COURT, TO SUPPORT THEIR REASO NINGS. IN MADHAV RAO JIWAJI RAO SCINDIA BAHADUR AND ORS. V. UNION OF INDIA THIS COURT CAUTIONED: SMT. RENUDEVI NACHANI M.A.NO.27/IND/2020 5 IT IS NOT PROPER TO REGARD A WORD, A CLAUSE OR A SE NTENCE OCCURRING IN A JUDGMENT OF THE SUPREME COURT, DIVORCED FROM ITS CONTEXT, AS CO NTAINING A FULL EXPOSITION OF THE LAW ON A QUESTION WHEN THE QUESTION DID NOT EVEN FA LL TO BE ANSWERED IN THAT JUDGMENT. THE LD. AR OF THE ASSESSEE HAS NOT REFERRED TO THE QUESTIONS WHILE CITING THE RATIOS OF VARIOUS DECISION WHICH WERE ANSWERED BY THE HON'BLE COURTS. THE LD. AR OF THE ASSESSEE HAS NOT ALSO DEMO NSTRATED AS TO HOW THE DECISIONS RELIED UPON BY HIM WERE RELEVANT I N THE CONTEXT OF CONDONATION OF DELAY PARTICULARLY WHEN THERE IS NO P ROVISION UNDER SECTION 254(2) OF THE ACT EMPOWERING THE TRIBUNAL T O CONDONE THE DELAY. 12. WE MAY ALSO LIKE TO DISCUSS THE CIRCUMSTANCES U NDER WHICH THE DECISION IN THE CASE OF MRT. KATIJI (SUPRA) RELIED UP ON BY THE ASSESSEE WAS RENDERED. IN THIS CASE THE APPEAL WAS PREFERRED B Y THE STATE OF JAMMU & KASHMIR BEFORE THE HON'BLE JAMMU & KASHMIR HIGH COURT. THE APPEAL WAS DISMISSED REJECTING AN APPLICATION OF CONDONATION OF DELAY AS TIME BARRED BEING FOUR DAYS BEYONG TIME. HON 'BLE SUPREME COURT CONDONED THE DELAY ON THE GROUND THAT WHEN SUBSTA NTIAL JUSTICE AND TECHNICAL CONSIDERATIONS WERE PITTED AGAIN ST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVED TO BE PREFE RRED. HON'BLE SUPREME COURT CONDONED THE DELAY AND REMITTED THE MATTER TO THE HIGH COURT TO DISPOSE OF THE APPEAL ON MERITS. IN T HIS CASE SECTION 5 OF LIMITATION ACT WAS HELD TO BE APPLICABLE AS THE MATTER RELATED TO THE APPEAL BEFORE HON'BLE J&K HIGH COURT. THE MATTE R BEFORE US DOES NOT RELATE TO AN APPEAL WHERE TRIBUNAL IS EMPOWERED TO CONDONE THE DELAY UNDER SECTION 253(5) OF THE ACT. THUS, THE DEC ISION IN THE CASE OF MST. KATIJI (SUPRA) RELIED UPON BY THE ASSESSEE I S NOT RELEVANT TO MISCELLANEOUS APPLICATION SEEKING CONDONATION OF DEL AY AS THIS TRIBUNAL HAS NO POWER TO CONDONE THE DELAY UNDER SECT ION 254(2) OF THE ACT. OTHER DECISIONS RELIED UPON BY THE LD. AR OF THE ASSESSEE REFERRED TO ABOVE ARE NOT RELEVANT TO ALL AS THE FAC TS OF THE CASE AND THE CONTEXT IN WHICH THEY HAVE BEEN RENDERED ARE NOT KNOWN. ACCORDINGLY, IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF SUN ENGG. WORKS (P.) LTD. (SUPRA) THE RAT IOS OF VARIOUS DECISIONS CANNOT BE APPLIED TO CONDONE THE DELAY. 13. ANOTHER CONTENTION OF THE LD. AR OF THE ASSESSE E THAT THE PRESENT APPLICATION FOR RECTIFICATION HAS BEEN FILED IMMEDIA TELY AFTER THE DECISION OF THE I.T.A.T. ON SECOND RECTIFICATION APPL ICATION IS NOT RELEVANT. THE PERIOD OF FOUR YEARS HAS TO BE CONSIDER ED FROM THE DATE OF ORIGINAL ORDER I.E. 17.9.1990 AND NOT FROM THE DA TE ON WHICH SECOND APPLICATION FOR RECTIFICATION WAS DECIDED. FI NALITY OF A PROCEEDING IS AN IMPORTANT FEATURE TO BE OBSERVED WH ILE DECIDING THE SMT. RENUDEVI NACHANI M.A.NO.27/IND/2020 6 MATTER. ORDERS PASSED UNDER SECTION 254(1) ARE FINAL SUBJECT TO PROVISIONS OF SECTION 256 OF THE ACT. BEFORE OMISSI ON OF SECTION 256 BY THE NATIONAL TAX TRIBUNAL ACT, 2005 WITH EFFECT FROM 28.12.2005, A REFERRED ON QUESTION OF LAW WAS TO BE MADE BY THE TRIBUNAL. IN THE INSTANT CASE THE REFERENCE APPLICATION WAS REJECTED BY THE TRIBUNAL VIDE ORDER DATED 14.4.1994. THERE IS NOTHING ON RECO RD TO SUGGEST THAT A REFERENCE APPLICATION WAS MADE BY THE ASSESS EE BEFORE HIGH COURT UNDER SECTION 256(2) OF THE ACT. THEREFORE, TH E ORDER PASSED BY THE TRIBUNAL ON 17.9.1990 HAS BECOME FINAL. THE CON TENTION OF THE ASSESSEE THAT FOR MISTAKES COMMITTED BY THE TRIBUNAL NO TIME LIMIT FOR RECTIFICATION OF MISTAKE IS NECESSARY AND THE TR IBUNAL CAN SUO MOTU RECTIFY THE MISTAKE. WE ARE UNABLE TO AGREE WI TH THE PROPOSITION MADE BY THE LD. AR OF THE ASSESSEE ON SINGLE GROUND T HAT SECTION 254(2) DOES NOT PROVIDE FOR ANY CONDONATION OF DELAY. FI THE CONTENTION OF THE ASSESSEE IS ACCEPTED IT WILL OPEN FLOOD GATES FOR LITIGATION UPSETTING THE SETTLED PRINCIPLE OF FINALI TY OF ASSESSMENT PROCEEDINGS. THE LD. AR OF THE ASSESSEE HAS ALSO CON TENDED THAT THE ASSESSEE CANNOT BE MADE TO SUFFER FROM THE WRONG CO MMITTED BY THE TRIBUNAL BY DECIDING THE RECTIFICATION APPLICATION A FTER EXPIRY OF 14 YEARS. WE ARE UNABLE TO AGREE WITH THE SUBMISSION M ADE BY THIM. NO DOUBT THE APPLICATION FOR RECTIFICATION WAS MADE BY THE ASSESSEE ON 28.7.1992 WITHIN THE PERIOD OF FOUR YEAR. THE RECTIF ICATION APPLICATION HAS BEEN DECIDED BY THE TRIBUNAL ON MERITS VIDE ORDE R DATED 24.2.2006 AFTER DISCUSSING OF ALL THE FOUR ISSUES. THEREFORE, THE ASSESSEE CANNOT HAVE ANY GRIEVANCE AGAINST DELAYED DE CISION ON MISCELLANEOUS APPLICATION SEEKING RECTIFICATION OF MISTAKE APPARENT FROM RECORDS. IF THE ASSESSEE WAS NOT SATISFIED WITH OUTCOME OF MISCELLANEOUS APPLICATION HE COULD HAVE GONE TO HON' BLE HIGH COURT SEEKING THE REMEDY. SETTLED ISSUED CANNOT BE UPSET BY MOVING RECTIFICATION THAT TOO AFTER EXPIRY OF PERIOD OF 16 YEARS. 14. INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C [SPECIAL BENCH] (JUDGMENT RENDERED BY THE FIVE MEMBER BENCH) IN THE CASE OF ARVINDBHAI H. SHAH (SUPRA) HELD THAT NO RECTIFICATION CAN BE MADE AFTER THE PERIOD OF FOUR YEARS ON THE PRINCIPLE OF E QUITY AND JUSTICE OR ON THE BASIS OF THEORY THAT JUSTICE SHOULD BE DONE. THE TIME LIMIT OF FOUR YEARS TO MAKE RECTIFICATION UNDER SECTION 254( 2) APPLIES TO BOTH SUO MOTU ACTION OF THE TRIBUNAL AS WELL AS TO ACTIO N TAKEN ON REQUEST OF THE PARTIES. SINCE IN THIS CASE THE MISCELLANEOU S APPLICATION SEEKING THE RECTIFICATION OF ORDER PASSED BY THE TRIB UNAL UNDER SECTION 254(1) HAS BEEN FILED AFTER THE EXPIRY OF A PERIOD OF SIXTEEN YEARS AND SINCE THERE IS NO PROVISION UNDER THE INCOM E TAX ACT AND THE PROVISIONS OF SECTION 5 OF THE LIMITATION ACT A RE NOT APPLICATION TO SMT. RENUDEVI NACHANI M.A.NO.27/IND/2020 7 PROCEEDINGS BEFORE QUASI-JUDICIAL AUTHORITIES LIKE I.T.A.T., CONDONATION OF DELAY CANNOT BE ALLOWED. THEREFORE, T HE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS D ISMISSED AS BARRED BY LIMITATION. 7. THE REVENUE HAS NOT BROUGHT TO OUR NOTICE ANY JU DGMENT BY THE HON'BLE HIGH COURT OR THE HON'BLE SUPREME COURT WHE REIN IT HAS BEEN RULED THAT THE TRIBUNAL CAN CONDONE DELAY IN T HE CASE OF MISC. APPLICATION FILED U/S 254(2) OF THE ACT. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH THE MISC. APPLICATION FILED BY THE REVENUE IS DISMISSED BEING BARRED BY L IMITATION. 8. IN THE RESULT, MISCELLANEOUS APPLICATION FILED BY THE REVENUE IS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 08 .01 .2021 SD/- (MANISH BORAD) SD/- (KUL BHARAT) A CCOUNTANT MEMBER JUDICIAL MEMBER INDORE; DATED : 08/01/2021 PATEL/PS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE