PR. CIT - 4, MUMBAI V. KEN FINANCIAL SERVICES LTD., MUMBAI

MA 299/MUM/2022

AI Insights

The case involves the Income Tax Officer (ITO) and M/s. Ken Financial Services Limited, where the revenue sought rectification of mistakes in a previous Tribunal order concerning the revision of an assessment order under section 263 of the Income Tax Act. The Principal Commissioner of Income Tax (PCIT) had found the original assessment order erroneous and passed a revisionary order, which was contested by the assessee. The Tribunal initially ruled the revisionary order as time-barred, but upon the revenue's application citing the TOLA Act, acknowledged the extension of the limitation period and recalled its earlier decision.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123700 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-02-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 24-11-2022
• Assessment Year: 2010-2011
• Appeal Filed On: 17-10-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Revision of order; Period of limitation; Time period of passing order
• Section: 263; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “H”, MUMBAI BEFORE SHRI AMIT SHUKLA, HON'BLE JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, HON'BLE ACCOUNTANT MEMBER MA.No. 299/MUM/2022 [ARISING OUT OF ITA NO. 894/MUM/2021 (A.Y: 2010-11)] Income Tax Officer – 4(3)(1) Room No. 648, 6 th Floor Aayakar Bhavan, M.K. Road Mumbai - 400020 v. M/s. Ken Financial Services Limited 302 Standard House, 83 M.K. Road, Mumbai - 400021 PAN: AAACK4929K (Appellant) (Respondent) Assessee Represented by : Dr. K. Shivram & Shri Rahul Hakani Department Represented by : Ms. Richa Gulati Date of Hearing : 25.11.2022 Date of Pronouncement : 03.02.2023 O R D E R PER S. RIFAUR RAHMAN (AM) 1. Through this Miscellaneous Application revenue is seeking for rectification of certain mistakes crept in the order passed by the Tribunal in ITA.No. 894/Mum/2021 dated 01.03.2022 for the A.Y. 2010-11 and requested for suitable amendment in the Tribunal order. 2 MA.No. 299/MUM/2022 M/s. Ken Financial Services Limited 2. In the Miscellaneous Application, revenue submitted as under: - “The above appeal was allowed by the Hon'ble Tribunal by its above order dated 01.03.2022. The copy of order dated 01.03.2022 is enclosed and marked as annexure-I. The appellate order was received by the Pr. Commissioner of Income tax - 4, Mumbai on 01.07.2022. The Appellant above named beg to present this application for rectification of certain mistakes which are apparent from record in the said Order. The facts, in brief are as under: 2. In this case Order u/s 263 of the Act was passed on 31.03.2021. The PCIT-4, Mumbai found the Order passed by the A.O. on 27.12.2017 u/s 143(3) r.w.s. 147 of the Act erroneous. An Information was received from DDIT Unit -7(4), Mumbai, in respect of loan transaction with entities managed and controlled by Vipul Vidur Bhat (Who has admitted in his statement that he provided accommodation entities to the assessee). The Pr.CIT observed that the A.O. was bound to reject the re-payment of loan of Rs. 1,27,50,000/- in the relevant Assessment Year. The AO did not verify the repayment of loan, accordingly the PCIT invoked the provisions u/s 263 of the Act. 3. Aggrieved, the assessee preferred an appeal before Hon'ble ITAT. During the appellate proceedings the assessee raised the additional ground that the revision proceedings held against the assessee is barred by limitation as provided u/s 263(2) of the IT Act. 4. The Hon'ble ITAT observed that the order passed u/s 143(3) r.w.s. 147 of the IT Act is dated 29.12.2017 and this order can be revises as per limitation period prescribed u/s 263(2) of the Act. As per section 263(2), no order can be revised after expiry of 2 years from the end of Financial Year in which the order sought to be revised is passed, therefore, it is clear that The Ld. PCIT passed the order u/s 263 only on 30.03.2021 beyond the period of limitation after 3 years. Therefore the revisionary order passed by the PCIT is bad in law. The above observations of the Hon'ble ITAT is not correct. In this case action u/s 263 could have time barred on 31.03.2020. The TOLA Act dated 29.09.2020 has extended completion of any proceedings or passing of orders or issuance of any notice, by whatever name called under the provision of the specified act. By virtue of this, even without a specific mention of the section order u/s 263 which was time barring on 31.03.2020 was relaxed. In view of the provisions of TOLA (The Taxation And Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020) 3 MA.No. 299/MUM/2022 M/s. Ken Financial Services Limited which have extended the timelines for completion of some of the compliances and Departmental actions getting barred by limitation during the period from 20 March 2020 to 31" December, 2020 to 31 march, 2021. The above facts were not considered by the Hon'ble ITAT. Therefore the order dated 01.03.2022 is erroneous and needs to be rectified. Therefore this miscellaneous application is being filed with a prayer to consider the provisions of TOLA 2020 and adjudicate the case on merit. 6. In view of the above, I am directed to the file this miscellaneous application before the Hon'ble ITAT, 'H' Bench, Mumbai vide order sheet notings of the CCIT-2, Mumbai dated 12.10.2022 (copy enclosed marked as annexure-II), which may kindly be allowed.” 3. At the time of hearing, it is brought to the notice of the Bench by the Ld. DR that order is passed on 01.03.2022 by allowing the appeal filed by the assessee with the observation that the revision order can be revised as per limitation period prescribed u/s 263(2) of the Act. As per section 263(2), no order can be revised after expiry of 2 years from the end of Financial Year in which the order sought to be revised is passed, therefore, it is clear that the Ld. PCIT passed the order u/s 263 only on 30.03.2021 beyond the period of limitation. It was submitted that action u/s 263 could have time barred on 31.03.2020. The TOLA Act dated 29.09.2020 has extended completion of any proceedings or passing of orders or issuance of any notice, by whatever name called under the provision of the specified act. Therefore, the limitation period is accordingly extended. 4 MA.No. 299/MUM/2022 M/s. Ken Financial Services Limited 4. On the other hand, Ld. AR submitted that assessee has no serious objection to the above submissions made by the Ld.DR. 5. Considered the rival submissions and material placed on record, considering the fact that limitation period is accordingly extended by TOLA Act dated 29.09.2020 and all the limitation periods are accordingly extended. Therefore, the order passed by the Tribunal is accordingly recalled and both additional as well as grounds of appeal are recalled. Accordingly, the registry is directed to fix this appeal for hearing in due course and inform the parties accordingly. Order pronounced in the open court on 03 rd February, 2023. Sd/- Sd/- (AMIT SHUKLA) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai / Dated 03/02/2023 Giridhar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent. 3. The CIT(A), Mumbai. 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// BY ORDER (Asstt. Registrar) ITAT, Mum