Dy.Commissioner Of IncomeTax -2(2), Hyderabad V. The Nizam Sugars Limited , Hyderabad

MA 34/Hyd/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 0984 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-02-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-A
• Next Hearing Date: 05-02-2021
• Assessment Year: 2013-2014
• Appeal Filed On: 03-08-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL KUMAR PANDEY
• Assessee Lawyers: N O N E
• Keywords: Period of limitation; Tax effect; Time period of passing order; Set aside
• Section: 254(2); 13; 22; 11

Judgement Text

MA NO 34 OF 2020 THE NIZAM SUGARS LTD HYDERABAD PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER M.A NO.34/HYD/2020 (ARISING OUT OF ITA NO.1238/HYD/2019) ASSESSMENT YEAR: 2013-14 DY.COMMISSIONER OF INCOME TAX, CIRCLE 2(2) HYDERABAD VS. THE NIZAM SUGARS LTD HYDERABAD PAN: AAACT7969A (APPELLANT) (RESPONDENT) REVENUE BY: SRI SUNIL KUMAR PANDEY, DR ASSESSEE BY: N O N E DATE OF HEARING: 05/02/2021 DATE OF PRONOUNCEMENT: 22/02/2021 ORDER PER SMT. P. MADHAVI DEVI, J.M. THIS M.A. IS FILED BY THE REVENUE SEEKING RECALL OF THE ORDER OF THE TRIBUNAL ORDER DATED 26.8.2019 DISMISS ING THE APPEAL OF THE REVENUE ON THE GROUND OF LOW TAX EFFECT. HOW EVER, IT IS SEEN THAT THIS M.A. FILED U/S 254(2) OF THE ACT IS BEYON D THE TIME LIMIT OF SIX MONTHS FROM THE DATE OF THE ORDER AND THE RE VENUE HAS FILED AN APPLICATION TO CONDONE THE DELAY. HOWEVER, IT IS SEEN THAT THE LIMITATION PERIOD FOR FILING OF THE M.A WAS TILL 29 .2.2020, WHEREAS THE COVID-19 WAS FROM 24.3.2020, THEREFORE, THE LOC KDOWN PERIOD DOES NOT APPLY TO THIS CASE. 2. WITH REGARD TO CONDONATION OF DELAY, WE FIND THA T THE COORDINATE BENCH OF THIS TRIBUNAL IN M.A. NO.33/HYD /2020, HAS HELD AS UNDER: MA NO 34 OF 2020 THE NIZAM SUGARS LTD HYDERABAD PAGE 2 OF 4 2. THE CAPTIONED MISCELLANEOUS APPLICATION WAS FI LED ON 24/07/2020, WHICH IS CLEARLY BEYOND THE DUE DATE AS PRESCRIBED U/S 254(2) OF THE ACT. THE REGISTRY HAS POINTED OUT THE ABOVE DEFECT MENTIONING THAT THIS MA IS FILED B EYOND THE TIME LIMIT PRESCRIBED U/S 254(2) OF THE I.T. ACT, 1 961 AND THEREFORE, THE MA IS NOT MAINTAINABLE. LEARNED DEP ARTMENTAL REPRESENTATIVE SUBMITTED THAT THE REVENUE WOULD LIK E TO GET THE INSTRUCTIONS FROM THE A.O FOR FILING OF A PETITION FOR CONDONATION OF DELAY. HOWEVER, IN THE CASE OF GAYATRI INFRA VE NTURES LTD IN M.A. NO.55/HYD/2018, THE COORDINATE BENCH OF THE TR IBUNAL HAS HELD THAT THE DELAY IN FILING THE MISCELLANEOUS APPLICATION CANNOT BE CONDONED. THE RELEVANT PARAS OF THE TRIB UNAL ORDER ARE EXTRACTED HEREIN BELOW FOR REFERENCE:- 5. WE FIND THAT W.E.F 1.6.2016, THE STATUTE HAS PR OVIDED ONLY A PERIOD OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE O RDER WAS PASSED FOR FILING OF M.A. U/S 254(2) OF THE ACT AND THE TR IBUNAL DOES NOT HAVE THE POWER TO CONDONE DELAY IN FILING OF THE M.A BEY OND THE SAID PERIOD. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF BHARAT PETROLEUM CORPN. LTD VS. ITAT (2013) 359 ITR 371, WHILE DEALING WITH AN IDENTICAL ISSUE I.E. PERIOD OF 4 YEARS FOR FILING OF THE APPLICATIO N U/S 254(2) AS WAS AVAILABLE PRIOR TO THE AMENDMENT, HAS HELD AS UNDER : 16) IT WAS NEXT CONTENDED ON BEHALF OF THE PETITIO NER THAT THE POWER OF THE TRIBUNAL UNDER SECTION 254(2) OF THE ACT IS ONL Y TO RECTIFY AN ERROR APPARENT FROM THE RECORD. IT DOES NOT EMPOWER THE T RIBUNAL TO RECALL ITS EARLIER ORDER DATED 6 DECEMBER 2007 FOR WHICH THE M ISCELLANEOUS APPLICATION WAS FILED ON 6 AUGUST 2012. IT WAS SUBM ITTED ON BEHALF OF THE PETITIONER THAT THE APPLICATION UNDER SECTION 2 54(1) OF THE ACT WOULD BE THE ONLY PROVISION UNDER WHICH AN APPLICATION CO ULD BE MADE FOR RECALL OF AN ORDER, AS UNDER SECTION 254(2) OF THE ACT ONLY THE ORDER CAN BE RECTIFIED BUT CANNOT BE RECALLED. WE FIND THAT T HERE IS AN ERROR APPARENT ON RECORD AND THE MISCELLANEOUS APPLICATIO N IS TO CORRECT THE ERROR APPARENT FROM THE RECORD. THE CONSEQUENCE OF SUCH RECTIFICATION APPLICATION BEING ALLOWED MAY LEAD TO A FRESH HEARI NG IN THE MATTER AFTER HAVING RECALLED THE ORIGINAL ORDER. HOWEVER, THE RE CALL, IF ANY, IS ONLY AS A CONSEQUENCE OF RECTIFYING THE ORIGINAL ORDER. IT IS PERTINENT TO NOTE THAT SECTION 254(2) OF THE ACT DOES NOT PROHIBIT THE REC ALL OF AN ORDER. IN FACT THE POWER/JURISDICTION OF THE TRIBUNAL TO RECALL AN ORDER ON RECTIFICATION APPLICATION MADE UNDER SECTION 254(2) OF THE ACT IS NO LONGER RESINTEGRA. THE ISSUE STANDS COVERED BY THE DECISIO N OF THE APEX COURT IN ASSISTANT COMMISSIONER OF INCOME TAX VS. SAURTAS HTRA KUTCH STOCK EXCHANGE LIMITED (2008) 305 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 REC ORD AND AS A CONSEQUENCE THEREFORE, TRIBUNAL CAN EVEN RECALL ITS ORDER. IN THE ABOVE CASE BEFORE THE APEX COURT ON 27 OCTOBER 2000 THE T RIBUNAL DISMISSED THE APPEAL OF STOCK EXCHANGE HOLDING THAT IT WAS NO T ENTITLED TO EXEMPTION UNDER SECTION 11 READ WITH SECTION12 OF T HE ACT. ON 13 NOVEMBER 2000 THE STOCK EXCHANGE FILED A RECTIFICAT ION APPLICATION UNDER SECTION 254(2) OF THE ACT BEFORE THE TRIBUNAL . THE TRIBUNAL BY ITS ORDER DATED 5 SEPTEMBER 2001 ALLOWED THE APPLICATIO N AND HELD THAT THERE WAS MISTAKE APPARENT ON THE RECORD WHICH REQU IRED RECTIFICATION. ACCORDINGLY, THE TRIBUNAL RECALLED ITS ORDER DATED 27 OCTOBER 2000 FOR THE PURPOSE OF ENTERTAINING THE APPEAL AFRESH. THE REVENUE FILED A WRIT PETITION IN THE GUJARAT HIGH COURT CHALLENGING THE ORDER DATED 5 SEPTEMBER 2001. THE ABOVE CHALLENGE BY THE REVENUE WAS TURNED DOWN MA NO 34 OF 2020 THE NIZAM SUGARS LTD HYDERABAD PAGE 3 OF 4 BY THE GUJARAT HIGH COURT. THE REVENUE CARRIED THE MATTER IN APPEAL TO THE APEX COURT WHICH ALSO DISMISSED THE APPEAL OF T HE REVENUE. THE APEX COURT OBSERVED THAT THE TRIBUNAL IN ITS ORIGIN AL ORDER WHILE DISMISSING THE STOCK EXCHANGE (ASSESSEE'S) APPEAL O VERLOOKED BINDING DECISIONS OF THE JURISDICTIONAL HIGH COURT. THIS MI STAKE WAS CORRECTED BY THE TRIBUNAL UNDER SECTION 254(2) OF THE ACT. TH E SUPREME COURT HELD THAT THE RECTIFICATION OF AN ORDER STANDS ON T HE FUNDAMENTAL PRINCIPLE THAT JUSTICE IS ABOVE ALL AND UPHELD THE EXERCISE OF POWER UNDER SECTION 254(2) OF THE ACT BY THE TRIBUNAL IN RECALLING ITS EARLIER ORDER DATED 27 OCTOBER 2000. THUS, RECALL OF AN ORD ER IS NOT BARRED ON RECTIFICATION APPLICATION BEING MADE BY ONE OF THE PARTIES. IN THESE CIRCUMSTANCES, THE APPLICATION WOULD BE AN APPLICAT ION FOR RECTIFICATION OF THE ORDER DATED 6 DECEMBER 2007 AND WOULD STAND GOVERNED BY SECTION 254(2) OF THE ACT. 17) IN THE FACTS OF THE PRESENT CASE THERE CAN BE N O DENIAL THAT THE ORDER DATED 6 DECEMBER 2007 SUFFERS FROM AN ERROR APPAREN T FROM THE RECORD. THE ERROR IS IN HAVING IGNORED THE MANDATE OF RULE 24 OF THE TRIBUNAL RULES WHICH REQUIRED THE TRIBUNAL TO DISPOSE OF THE MATTER ON MERITS AFTER HEARING THE RESPONDENTS. IN THESE CIRCUMSTANC ES, AN APPLICATION FOR RECTIFICATION WOULD LIE UNDER SECTION 254(2) OF THE ACT. THE RECALL OF AN ORDER WOULD 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 ORDER OF THE TRIBUNAL HOLDING TH AT MISCELLANEOUS APPLICATION FILED BY THE APPELLANT IS BARRED BY LIM ITATION UNDER SECTION 254(2) OF THE ACT AS IT WAS FILED BEYOND A PERIOD O F FOUR YEARS FROM 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, I S AN IRREGULAR ORDER AND NOT A VOID ORDER. HOWEVER, EVEN IF IT IS ASSUME D 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 B Y A COMPETENT TRIBUNAL. IN FACT, THE APEX COURT IN THE SULTAN SADIK V/S. SA NJAY RAJ SUBBA REPORTED IN 2004(2) SCC 277 HAS OBSERVED AS UNDER: ' PATENT AND LATENT INVALIDITY IN A WELL KNOWN PASSAGE LORD RADCLIFFE S AID : ' AN ORDER, EVEN IF NOT MADE IN GOOD FAITH, IS STILL AN ACT CAPABLE OF LEGAL CONSEQUENCES. IT BEARS NO BRAND OF INVALIDITY UPON ITS FOREHEAD. UNL ESS THE NECESSARY PROCEEDINGS ARE TAKEN AT LAW TO ESTABLISH THE CAUSE OF INVALIDITY AND TO GET IT QUASHED OR OTHERWISE UPSET, IT WILL REMAIN A S EFFECTIVE FOR ITS OSTENSIBLE PURPOSE AS THE MOST IMPECCABLE OF ORDERS .' THIS MUST BE EQUALLY TRUE EVEN WHERE THE BRAND OF INVALIDITY IS PLAINLY VISIBLE, FOR THERE ALSO THE ORDER CAN EFFECTIVELY BE RESISTED IN LAW ONLY BY OBTAINING A DECISION OF COURT.' 3. FURTHER, THE SUPREME COURT IN SNEH GUPTA V/S. DE V SARUP (2009) 6 SCC 194 HAS OBSERVED AS UNDER: '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 AS IDE IF IT HAS BEEN PASSED IN VIOLATION OF LAW. FOR THE SAID PURPOSE, T HE PROVISIONS CONTAINED IN LIMITATION ACT 1963 WOULD BE APPLICABL E. IT IS NOT THE LAW THAT WHERE THE DECREE IS VOID, NO PERIOD OF LIMITAT ION SHALL BE ATTRACTED AT ALL.' THEREFORE, IN THIS CASE ALSO THE PERIOD OF FOUR YEA RS FROM THE DATE OF ORDER SOUGHT TO BE RECTIFIED/RECALLED WILL APPLY AS PROVIDED IN SECTION MA NO 34 OF 2020 THE NIZAM SUGARS LTD HYDERABAD PAGE 4 OF 4 254(2) OF THE ACT. THIS IS SO EVEN IF IT IS ASSUMED THAT THE ORDER DATED 6 DECEMBER 2006 IS A VOID ORDER. 19) WE SHALL NOW ANSWER THE QUESTIONS ARISING IN TH IS CASE AS RAISED BY US IN PARAGRAPH 4 ABOVE AS UNDER: QUESTION(A): NO. THE TRIBUNAL HAS NO POWER IN TERMS OF RULE 24 OF THE TRIBUNAL RULES TO DISMISS AN APPEAL BEFORE IT FOR N ON-PROSECUTION. QUESTION(B): THE MISCELLANEOUS APPLICATION FOR RECA LL OF AN ORDER FALLS UNDER SECTION 254(2) OF THE ACT AND NOT UNDER SECTI ON 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 F IND THE TRIBUNAL WAS CORRECT IN DISMISSING THE MISCELLANEOUS APPLICATION BY ITS ORDER DATED 10 APRIL 2013 AS BEING BEYOND THE PERIOD OF FOUR YE ARS AS PROVIDED UNDER SECTION 254(2) OF THE ACT. 21) ACCORDINGLY, THE PETITION IS DISMISSED WITH NO ORDER AS TO COSTS. 4. RESPECTFULLY, FOLLOWING THE DECISIONS OF THE HIGHER JUDICIARY AS WELL AS THE DECISION OF THE COO RDINATE BENCH CITED SUPRA, THE MA FILED BY THE REVENUE IS D ISMISSED AS NON-MAINTAINABLE . 3. THUS, THE TRIBUNAL DOES NOT HAVE THE POWER TO CONDONE THE DELAY AND THIS M.A IS BARRED BY PERIOD OF LIMITATION. HENCE THIS M.A IS DISMISSED, SINCE THE TRIBUNAL DOE S NOT HAVE THE POWER TO CONDONE THE DELAY AND THIS M.A IS BARRED B Y PERIOD OF LIMITATION, THIS M.A. IS DISMISSED. 4. IN THE RESULT, M.A. FILED BY THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND FEBRUARY, 2021. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 22 ND FEBRUARY, 2021. VINODAN/SPS COPY TO: 1 DY. CIT, CIRCLE 2(2) HYDERABAD 2 THE NIZAM SUGARS LTD, 5-10-174 SHAKAR BHAVAN, FAT HE MAIDAN ROAD, HYDERABAD 500004 3 CIT (A)-2 HYDERABAD 4 PR. CIT 2 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER