CIT, KOL-1, KOLKATA, Kolkata V. Ushita Trading & Agency Limited, Kolkata

MA 38/KOL/2014

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 2520 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 26 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-11-2014
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 19-08-2014
• Court: TRIBUNAL
• Department Lawyers: RAVI JAIN
• Keywords: Rectification of order; Reasonable cause
• Section: 263

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOLKATA ( ) BEFORE , /AND , ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI SHAMIM YAHYA , AM ] M . A . NO. 38 /KOL/2014 IN M.A. NO.174/KOL/2012 IN / I.T.A NO. 841 /KOL/201 3 / ASSESSMENT YEAR: 200 8 - 0 9 COMMISSIONER OF INCOME - TAX , KOL - 1, KOLKATA VS. M/S. USHITA TRADING & AGENCY LTD. (PAN:A AACU3269L ) ( /APPLICANT ) ( / RESPONDENT ) DATE OF HEARING: 14 . 1 1 .201 4 DATE OF PRONOUNCEMENT: 14 . 1 1 .201 4 APPLICANT BY : SHRI RAVI JAIN, CIT RESPONDENT BY: SHRI SIDDHARTH JHAJHARIA, FCA ORDER PER SHRI MAHAVIR SINGH, JM : BY WAY OF THIS MISC. APPLICATION REVENUE HAS REQUESTED FOR RECALLING OF ORDER PASSED IN MA NO.174/K/2012 DATED 19.07.2013, WHICH ORDER PERTAINS TO RECALLING OF THE ORDER PASSED IN ITA NO.841/K/2012 DATED 27.09.2012 BEING AN EX PARTE ORDER. THE REVENUE HAS RAISED FOLLOWING TWO GROUNDS: 1 . WHETHER, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ASSESSEE HAS ERRED IN MOVING THE MISCELLANEOUS APPLICATION BEFORE THE HON BLE ITAT B BENCHES, KOLKATA RECALLING THE HON BLE ITAT S ORDER DATED 27.09.2012 AS THE JURISDICTIONAL ASSESSING OFFICER H AD ALREADY PASSED AN ORDER U/S. 144/263/14393) COMPLYING WITH THE DIRECTION OF THE LD. CIT, KOL ON 31.03.2013 AND THE HON BLE ITAT B BENCHES, KOL HAD DISMISSED THE APPEAL OF THE ASSESSEE AGAINST THE ORDER U/S. 263 PASSED BY THE CIT - KOL - 1, KOL ON 27.09.20 12. 2. WHETHER, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND CONSIDERING THE DECISION IN THE ORDER PASSED BY HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF KAILASH PRASAD JAIN VS. CIT (2011) 13 TAXMAN 145 (CAL) AND THE HON BLE ITAT, C BENCH, KOLKATA IN THE CASE OF M/S. JET AGE SECURITIES PVT. LTD. IN ITA NO. 637/K/2013 DATED 18.07.2014, THE ASSESSEE S MISCELLANEOUS APPLICATION BECOMES INFRUCTUOUS. 2. AT THE OUTSET, IT IS TO BE SEEN THAT BY VIRTUE OF THIS MISC. APPLICATION THE REVENUE WANTS TO RECAL L THE ORDER PASSED IN EARLIER MISC. APPLICATION NO. 174/K/2012. NOW, 2 M.A. NO.38/K/2014 USHITA TRADING & AGENCY LTD. AY 2008 - 09 QUESTION ARISES WHETHER THE TRIBUNAL HAS POWER U/S. 254(2) OF THE ACT TO RECALL THE ORDER PASSED ON MISC. APPLICATION U/S. 254(2) OF THE ACT OR NOT. 3. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE HAVE ALSO EXAMINED THE LEGAL POSITION THAT, THE POWER EXERCISABLE UNDER SECTION 254(2) OF THE ACT IS SUBJECT TO TWO LIMITATIONS. FIRSTLY, IT HAS TO BE CONFINED TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD AND SECONDLY IT HAS TO BE CONFINED TO AN ORDER PASSED U/S. 254(1) OF THE ACT . ACCORDINGLY, IT IS APPARENT THAT THE POWER EXERCISABLE U/S. 254(2) OF THE ACT IS NOT AVAILABLE TO BE EXERCISED FOR AMENDING ANY ORDER PASSED BY IT UNDER ANY SEC TION OTHER THAN SECTION 254(1) OF THE ACT . IN OTHER WORDS, THE POWER OF THE TRIBUNAL CONFERRED BY SECTION 254(2) OF THE ACT FOR RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD CANNOT BE EXERCISED BY THE TRIBUNAL TO RECALL ANY ORDER PASSED BY IT U/S. 25 4 (1 ) OF THE ACT. THIS VIEW OF OURS IS SUPPORTED BY THE DECISION OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT V. INCOME - TAX APPELLATE TRIBUNAL AND ANOTHER (1997) 227 ITR 443(ALL) , WHEREIN IT IS HELD AS UNDER: - HEARD LEARNED COUNSEL FOR THE PARTIES. A BARE PERUSAL OF SECTION 254 OF THE ACT REVEALS THAT SUB - SECTION (1) OF SECTION 254 CONFERS AMPLE POWERS ON THE TRIBUNAL TO PASS SUCH ORDERS IN ANY APPEAL FILED BEFORE IT AS IT THINKS FIT. SUB - SECTION (2) OF SECTION 254 POSTULATES THAT THE TRIBUNAL MAY AME ND ANY ORDER PASSED BY IT UNDER SUB - SECTION (1) OF SECTION 254 WITH A VIEW TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD. THUS, THE POWER EXERCISABLE UNDER SUB - SECTION (2) OF SECTION 254 IS SUBJECT TO TWO LIMITATIONS. FIRSTLY, IT HAS TO BE CONFINED TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD AND SECONDLY IT HAS TO BE CONFINED TO AN ORDER PASSED UNDER SUB - SECTION (1) OF SECTION 254. ACCORDINGLY, IT IS APPARENT THAT THE POWER EXERCISABLE UNDER SUB - SECTION (2) OF SECTION 254 IS NOT AVAILABLE TO BE EXERCISED FOR AMENDING ANY ORDER PASSED BY IT UNDER ANY SECTION OTHER THAN SUB - SECTION (1) OF SECTION 254. IN OTHER WORDS, THE POWER OF THE TRIBUNAL CONFERRED BY SUB - SECTION (2) OF SECTION 254 FOR RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD CANNOT BE EXERCISED BY THE TRIBUNAL TO RECALL ANY ORDER PASSED BY IT UNDER SECTION 256 OF THE ACT. 4. ACCORDING TO US, T HE SCOPE AND AMBIT OF APPLICATION OF SECTION 254(2) OF THE ACT IS VERY LIMITED. THE SAME IS RESTRICTED TO RECTIFICATION OF MISTAKES APPARENT F ROM THE RECORD. TO DEAL FIRST WITH THE QUESTION OF POWER OF TRIBUNAL TO RECALL AN ORDER IN ITS ENTIRETY, IT MAY BE SAID THAT RECALLING THE ENTIRE ORDER OBVIOUSLY WOULD MEAN PASSING OF A FRESH ORDER AND THAT IS NOT THE LEGISLATIVE INTENT. THE ORDER PASSED BY THE TRIBUNAL UNDER SECTION 254(1) OF THE ACT IS THE EFFECTIVE ORDER SO FAR AS THE APPEAL IS CONCERNED. ANY ORDER PASSED UNDER SECTION 254(2) OF THE ACT EITHER ALLOWING AMENDMENT OR REFUSING TO AMEND GETS MERGED 3 M.A. NO.38/K/2014 USHITA TRADING & AGENCY LTD. AY 2008 - 09 WITH THE ORIGINAL ORDER PASSED. THE ORD ER AS AMENDED OR REMAINING UN - AMENDED IS THE EFFECTIVE ORDER FOR ALL PRACTICAL PURPOSES. THE SAME CONTINUES TO BE AN ORDER U/S.254(1) OF THE ACT . THAT IS THE FINAL ORDER IN THE APPEAL. ORDER U/S. 254(2) OF THE ACT DOES NOT HAVE EXISTENCE DE HORS THE OR DER U/S. 254(1) OF THE ACT . RECALLING OF THE ORDER IS NOT PERMISSIBLE U/S. 254 ( 2) OF THE ACT . THIS VIEW OF OURS IS SUPPORTED BY THE DECISION OF HON'BLE ORISSA HIGH COURT IN THE CASE OF CIT AND ANOTHER V . INCOME - TAX APPELLATE TRIBUNAL (1992) 196 ITR 640(ORI) , WHEREIN IT IS HELD AS UNDER: - THE SCOPE AND AMBIT OF AN APPLICATION OF SECTION 254(2) IS VERY LIMITED. THE SAME IS RESTRICTED TO RECTIFICATION OF MISTAKES APPARENT FROM THE RECORD. WE SHALL FIRST DEAL WITH THE QUESTION OF THE POWER OF THE TRIBUN AL TO RECALL AN ORDER IN ITS ENTIRETY.. RECALLING THE ENTIRE ORDER OBVIOUSLY WOULD MEAN PASSING OF A FRESH ORDER. THAT DOES NOT APPEAR TO BE THE LEGISLATIVE INTENT. THE ORDER PASSED BY THE TRIO UNDER SECTION 254(1) IS THE EFFECTIVE ORDER SO FAR AS THE APPE AL IS CONCERNED. 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 UN - AMENDED IS THE EFFECTIVE ORDER FOR ALL PRACTICAL PURPOSES. THE SAME CONTI NUES TO BE AN ORDER UNDER SECTION 2554(1). THAT IS THE FINAL ORDER IN THE APPEAL. AN ORDER UNDER SECTION 254(2) DOES NOT HAVE EXISTENCE DE HORS THE ORDER UNDER SECTION 254(1). RECALLING OF THE ORDER IS NOT PERMISSIBLE UNDER SECTION 254(2). RECALLING OF AN ORDER AUTOMATICALLY NECESSITATES REHEARING AND RE - ADJUDICATION OF THE ENTIRE SUBJECT - MATTER OF APPEAL. THE DISPUTE NO LONGER REMAINS RESTRICTED TO ANY MISTAKE SOUGHT TO BE RECTIFIED. POWER TO RECALL AN ORDER IS PRESCRIBED IN TERMS OF RULE 24 OF THE INCOME - TAX (APPELLATE TRIBUNAL) RULES, 1963, AND THAT TOO ONLY INCOME CASES WHERE THE ASSESSEE SHOWS THAT IT HAD A REASONABLE CAUSE FOR BEING ABSENT AT A TIME WHEN THE APPEAL WAS TAKEN UP AND WAS DECIDED EX PARTE . IN VIEW OF THE LEGAL POSITION, ENUNCIATED BY H ON'BLE HIGH COURT CITED (SUPRA), WE ARE OF THE FIRM VIEW THAT NO RECTIFICATION IS POSSIBLE ON RECTIFICATION ORDER. EVEN OTHERWISE, THE FIRST RECTIFICATION ORDER WAS ON THE ORDER PASSED EX PARTE WITH MERITS OF THE CASE. HENCE, MA OF THE REVENUE IS DISMISS ED. 5 . IN THE RESULT , THE STAY PETITION FILED BY THE ASSESSEE STANDS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 14/11/2014. S D / - S D / - , , ( SHAMIM YAHYA ) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 14 TH NOVEMBER , 201 4 4 M.A. NO.38/K/2014 USHITA TRADING & AGENCY LTD. AY 2008 - 09 JD.(SR.P.S.) - COPY OF THE ORDER FORWARDED TO: 1 . / A PPELLANT - CIT, KOL - 1, KOLKATA . 2 / RESPONDENT M/S. USHITA TRADING & AGENCY LTD., 52, WESTON STREET, KOLKATA - 700 012 . 3 . ( )/ THE CIT(A), KOLKATA 4. 5. / CIT KOLKATA / DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, / BY ORDER, /ASSTT. REGISTRAR .