Smt Padma K Bhat, Bangalore V. Assistant Commissioner of Income tax, Bangalore

MA 39/BANG/2017

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5515 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-04-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 21-04-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 08-02-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Rectification of order; Opportunity of being heard; Period of limitation; Time period of passing order; Condonation of delay
• Section: 12; 11

Judgement Text

MP.39/BANG/2017 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'B', BANGALORE BEFORE SHRI. VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI. S. JAYARAMAN, ACCOUNTANT MEMBER MISCELLANEOUS PETITION NO.39/BANG/2017 (IN I.T.A NO.247/BANG/2014) (ASSESSMENT YEAR : 2008-09) SMT. PADMA K. BHAT, NO.488, 4 TH CROSS, R. R. LAYOUT, NAGADEVANAHALLI, JNANABHARATHI POST, BANGALORE ..APPELLANT PAN : ABXPB1756C V. ASST. COMMISSIONER OF INCOME-TAX, CIRCLE -2(1), BANGALORE ..RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI. INDER SOLANKI JCIT HEARD ON : 21.04.2017 PRONOUNCED ON : 28.04.2017 O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER : THIS MISCELLANEOUS PETITION IS FILED BY THE ASSESS EE, SEEKING RECALLING OF THE ORDER DATED 04.01.2016 OF THIS TRI BUNAL WHEREBY THE APPEAL OF THE ASSESSEE WAS DISMISSED FOR NON -PROSE CUTION. MP.39/BANG/2017 PAGE - 2 2. THE ASSESSEE IN HER PETITION PRAYED THAT SINCE H ER APPEAL IS DISMISSED FOR NON-PROSECUTION AND THAT NON-APPEARAN CE OF THE ASSESSEE OR ITS REPRESENTATIVE WAS NOT INTENTIONAL, BUT WAS DUE TO COMMUNICATION GAP BETWEEN THE ASSESSEE AND ITS REPR ESENTATIVE, THE APPEAL MAY BE RECALLED FOR HEARING ON MERITS. 03. WHEN THE CASE WAS CALLED UP FOR HEARING ON 21.0 4.2017, EVEN THOUGH THE NOTICE OF HEARING IS SERVED BY RPAD, NON E APPEARED FROM THE ASSESSEES SIDE. 04. THE LEARNED DR HAS VEHEMENTLY OPPOSED TO THE M ISCELLANEOUS APPLICATION AND SUBMITTED THAT THE MISCELLANEOUS AP PLICATION IS NOT MAINTAINABLE AS THIS IS BARRED BY LIMITATIONS AS PE R SECTION 254(2) OF THE ACT. THE LEARNED DR HAS FURTHER CONTENDED THAT AFTER THE AMENDMENT OF SECTION 254(2), THE MISTAKE IN THE ORD ER OF THE TRIBUNAL CAN BE RECTIFIED WITHIN THE PERIOD OF 6 MO NTHS AND SINCE THE ASSESSEE HAS FILED THIS MISCELLANEOUS APPLICATION A FTER THE EXPIRY OF 6 MONTHS OF LIMITATION PERIOD, THEREFORE THE MISCELLA NEOUS APPLICATION IS NOT MAINTAINABLE AND LIABLE TO BE DISMISSED IN LIMI NE. 05. WE HAVE CONSIDERED THE ABOVE SUBMISSIONS AND CA REFULLY PERUSED THE RELEVANT RECORD. THE ASSESSEE HAS FILED THIS MI SCELLANEOUS PETITION ON 10.03.2017 FOR RECALLING OF ORDER OF THE TRIBUNA L DATED MP.39/BANG/2017 PAGE - 3 04.01.2016. THE PROVISION OF RECTIFICATION OF MISTA KE APPARENT FROM RECORD IS PROVIDED UNDER SECTION 254(2) AS UNDER: 254. (1) THE APPELLATE TRIBUNAL MAY, AFTER GIVING BOTH THE PARTIES TO THE APPEAL AN OPPORTUNITY OF BEING HEARD, PASS S UCH ORDERS THEREON AS IT THINKS FIT 46. (1A) 48[***] (2) THE APPELLATE TRIBUNAL MAY, AT ANY TIME WITHIN FOUR YEARS FROM THE DATE OF THE ORDER, WITH A VIEW TO RECTIFYING AN Y MISTAKE APPARENT FROM THE RECORD, AMEND ANY ORDER PASSED BY IT UNDER SUB-SECTION (1), AND SHALL MAKE SUCH AMENDMENT IF T HE MISTAKE IS BROUGHT TO ITS NOTICE BY THE ASSESSEE OR THE [ASSES SING] OFFICER: PROVIDED THAT AN AMENDMENT WHICH HAS THE EFFECT OF ENHANCING AN ASSESSMENT OR REDUCING A REFUND OR OTHERWISE INCREA SING THE LIABILITY OF THE ASSESSEE, SHALL NOT BE MADE UNDER THIS SUB-SECTION UNLESS THE APPELLATE TRIBUNAL HAS GIVEN NOTICE TO T HE ASSESSEE OF ITS INTENTION TO DO SO AND HAS ALLOWED THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD: [PROVIDED FURTHER THAT ANY APPLICATION FILED BY THE ASSESSEE IN THIS SUB-SECTION ON OR AFTER THE 1ST DAY OF OCTOBER, 199 8, SHALL BE ACCOMPANIED BY A FEE OF FIFTY RUPEES.] 06. THE TIME PERIOD WITHIN WHICH THE MISTAKE APPARE NT FROM RECORD CAN BE RECTIFIED HAS BEEN REDUCED FROM 4 YEARS TO 6 MONTHS BY THE AMENDMENT VIDE FINANCE ACT, 2016 W.E.F. 01.06.2016. THUS AFTER THE SUBSTITUTION OF THIS PROVISION W.E.F. 01.06.2016, T HE LIMITATION PERIOD FOR RECTIFICATION OF MISTAKE APPARENT FROM RECORD I S PROVIDED ONLY FOR 6 MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER WAS PASSED. IN THE CASE IN HAND, THE IMPUGNED ORDER WAS PASSED BY THE TRIBUNAL ON 04.01.2016 AND AFTER THE AMENDMENT IN SECTION 254(4 ) W.E.F. 01.06.2016, THESE MISCELLANEOUS PETITION WAS REQUIR ED TO BE FILED MP.39/BANG/2017 PAGE - 4 BEFORE 31.07.2016. PRIOR TO THE AMENDMENT, THE LIMI TATION WAS PROVIDED AS 4 YEARS FOR RECTIFICATION OF MISTAKE AP PARENT FROM RECORD AND THEREFORE THERE WAS NO PROVISION IN THE INCOME TAX ACT FOR CONDONATION OF ANY DELAY OF ANY PETITION FOR RECTIF ICATION OF MISTAKE FILED AFTER THE SAID PERIOD OF 4 YEARS. EVEN OTHERW ISE, THE LIMITATION OF 4 YEARS WAS MORE THAN THE LIMITATION FOR FILING OF THE SUITE AND AS PER THE GENERAL STATUTE I.E., THE LIMITATION ACT WHERE THE LIMITATION FOR INSTITUTION OF SUIT IS PROVIDED AS 3 YEARS ONWARDS FROM THE DATE OF CAUSE OF ACTION AROSE AND THEREFORE THERE WAS NO PR OVISION EVEN IN THE LIMITATION ACT FOR CONDONATION OF DELAY IN RESP ECT OF DELAY IN FILING THE SUIT. SINCE THE LIMITATION FOR RECTIFICATION OF MISTAKE IS PROVIDED IN THE INCOME TAX ACT ITSELF, THEREFORE THE PROVISIONS OF LIMITATION ACT ARE NOT APPLICABLE SO FAR AS THE LIMITATION PROVIDE D IN THE INCOME TAX ACT. THIS PRINCIPLE IS WELL SETTLED THAT WHEN THERE IS A PROVISION IN SPECIAL STATUTE, THEN THE GENERAL STATUTE IS NOT AP PLICABLE TO THE EXTENT OF THE PROVISION PROVIDED IN THE SPECIAL STA TUTE. WE FIND THAT PRIOR TO THE AMENDMENT THE LIMITATION FOR RECTIFICA TION OF MISTAKE WAS 4 YEARS AS PROVIDED UNDER SECTION 254(2) AND THEREF ORE THERE WAS NO QUESTION OF PROVIDING ANY PROVISION OR POWER TO THE INCOME TAX APPELLATE TRIBUNAL TO CONDONE THE DELAY AFTER THE E XPIRY OF SUCH 4 YEARS OF LIMITATION. HOWEVER, IN THE AMENDED PROVIS IONS OF THE ACT UNDER SECTION 254(2), THE LIMITATION FOR RECTIFICAT ION OF MISTAKE MP.39/BANG/2017 PAGE - 5 APPARENT FROM THE RECORD HAS BEEN DRASTICALLY REDUC ED FROM 4 YEARS TO 6 MONTHS AND IN CASE OF A DELAY IN APPLYING FOR RECTIFICATION OF MISTAKE APPARENT FROM RECORD, THE PARTY WHO IS AGGR IEVED BY THE ORDER OF THIS TRIBUNAL SUFFERING FROM MISTAKE WILL BE SUBJECTED TO A GREAT HARDSHIP AND DEPRIVATION OF VALUABLE RIGHT OF PURSUING THE APPEAL BEFORE THE TRIBUNAL. BUT IN THE ABSENCE OF A NY PROVISION GIVING POWER OR JURISDICTION TO THIS TRIBUNAL TO CONDONE T HE DELAY IN FILING THE PETITION FOR RECTIFICATION OF THE MISTAKE APPARENT FROM THE RECORD, THE TRIBUNAL HAS NO OPTION BUT TO PROCEED STRICTLY AS P ER THE PROVISIONS AS PROVIDED IN THE STATUTE. 07. WE HAVE NO DOUBT IN OUR MIND THAT THERE IS AN A PPARENT MISTAKE IN THE ORDER DATED 04.01.2016 AS THE TRIBUNAL HAS N OT DECIDED THE APPEALS OF THE ASSESSEE ON MERIT BUT DISMISSED THE SAME IN LIMINE FOR WANT OF PROSECUTION. HOWEVER, THE QUESTION OF R ECTIFICATION OF MISTAKE CANNOT BE ENTERTAINED UNTIL AND UNLESS THE MISCELLANEOUS PETITION FILED BY THE ASSESSEE IS FOUND TO BE MAINT AINABLE. THE MISCELLANEOUS PETITION FILED BY THE ASSESSEE IS BEY OND THE PERIOD OF 6 MONTHS FROM 04.01.2016 AND THEREFORE THE SAME IS BA RRED BY LIMITATION. IN THE ABSENCE OF ANY PROVISION TO COND ONE THE DELAY UNDER THE INCOME TAX ACT, IT MAY BE A CASE OF OMISS ION IN THE PROVISION OF ACT WHICH CANNOT BE SUPPLIED BY US WHE N THERE IS NO MP.39/BANG/2017 PAGE - 6 AMBIGUITY IN THE PROVISIONS OF SECTION 254(2) OF TH E ACT. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF BHARAT PETROLEUM C ORPORATION LTD., VS. ITAT AND OTHERS 359 ITR 371, WHILE DEALING WITH AN IDENTICAL ISSUE HAS HELD IN PARAS 16 TO 18 AS UNDER: 16 IT WAS NEXT CONTENDED ON BEHALF OF THE PETITION ER THAT THE POWER OF THE TRIBUNAL UNDER SECTION 254(2) OF THE ACT IS ONLY TO RECTIFY AN ERROR APPARENT FROM THE RECORD. IT DOES NOT EMPOWER THE TRIBUNAL TO RECALL ITS EARLIER ORDER DATED DECEMBER 6, 2007, FO R WHICH THE MISCELLANEOUS APPLICATION WAS FILED ON AUGUST 6, 20 12. IT WAS SUBMITTED ON BEHALF OF THE PETITIONER THAT THE APPL ICATION UNDER SECTION 254(1) OF THE ACT WOULD BE THE ONLY PROVISI ON UNDER WHICH AN APPLICATION COULD BE MADE FOR RECALL OF AN ORDER, A S UNDER SECTION 254(2) OF THE ACT ONLY THE ORDER CAN BE RECTIFIED B UT CANNOT BE RECALLED. WE FIND THAT THERE IS AN ERROR APPARENT O N RECORD AND THE MISCELLANEOUS APPLICATION IS TO CORRECT THE ERROR A PPARENT FROM THE RECORD. THE CONSEQUENCE OF SUCH RECTIFICATION APPLI CATION BEING ALLOWED MAY LEAD TO A FRESH HEARING IN THE MATTER A FTER HAVING RECALLED THE ORIGINAL ORDER. HOWEVER, THE RECALL, I F 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 TH E RECALL OF AN ORDER. IN FACT THE POWER/JURISDICTION OF THE TRIBUNAL TO R ECALL AN ORDER ON RECTIFICATION APPLICATION MADE UNDER SECTION 254(2) OF THE ACT IS NO LONGER RES INTEGRA. THE ISSUE STANDS COVERED BY THE DECISION OF THE APEX COURT IN ASST. CIT V. SAURASHTRA KUTCH STOCK E XCHANGE LTD. [2008] 305 ITR 227 (SC) WHICH HELD THAT THOUGH THE TRIBUNAL HAS NO POWER TO REVIEW ITS OWN ORDER, YET IT HAS JURISDICT ION TO RECTIFY ANY MISTAKE APPARENT ON THE FACE OF THE RECORD AND AS A CONSEQUENCE, THEREFORE, THE TRIBUNAL CAN EVEN RECALL ITS ORDER. IN THE ABOVE CASE, BEFORE THE APEX COURT ON OCTOBER 27, 2000, THE TRIB UNAL DISMISSED THE APPEAL OF STOCK EXCHANGE HOLDING THAT IT WAS NO T ENTITLED TO EXEMPTION UNDER SECTION 11 READ WITH SECTION 12 OF THE ACT. ON NOVEMBER 13, 2000, THE STOCK EXCHANGE FILED A RECTI FICATION APPLICATION UNDER SECTION 254(2) OF THE ACT BEFORE THE TRIBUNAL. THE TRIBUNAL BY ITS ORDER DATED SEPTEMBER 5, 2001, ALLO WED THE APPLICATION AND HELD THAT THERE WAS A MISTAKE APPAR ENT ON THE RECORD WHICH REQUIRED RECTIFICATION. ACCORDINGLY, THE TRIB UNAL RECALLED ITS ORDER DATED OCTOBER 27, 2000, FOR THE PURPOSE OF EN TERTAINING THE APPEAL AFRESH. THE REVENUE FILED A WRIT PETITION IN THE GUJARAT HIGH COURT CHALLENGING THE ORDER DATED SEPTEMBER 5, 2001 . THE ABOVE CHALLENGE BY THE REVENUE WAS TURNED DOWN BY THE GUJ ARAT HIGH COURT. THE REVENUE CARRIED THE MATTER IN APPEAL TO THE APEX COURT MP.39/BANG/2017 PAGE - 7 WHICH ALSO DISMISSED THE APPEAL OF THE REVENUE. THE APEX COURT OBSERVED THAT THE TRIBUNAL IN ITS ORIGINAL ORDER WH ILE DISMISSING THE STOCK EXCHANGE (ASSESSEE'S) APPEAL OVERLOOKED THE B INDING DECISIONS OF THE JURISDICTIONAL HIGH COURT. THIS MISTAKE WAS CORRECTED BY THE TRIBUNAL UNDER SECTION 254(2) OF THE ACT. THE SUPRE ME COURT HELD THAT THE RECTIFICATION OF AN ORDER STANDS ON THE FU NDAMENTAL PRINCIPLE THAT JUSTICE IS ABOVE ALL AND UPHELD THE EXERCISE O F POWER UNDER SECTION 254(2) OF THE ACT BY THE TRIBUNAL IN RECALL ING ITS EARLIER ORDER DATED OCTOBER 27, 2000. THUS, RECALL OF AN ORDER 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 DECEMBER 6, 2007, AND WOULD STAND GOVERNED BY SECTION 254(2) OF THE ACT. 17 IN THE FACTS OF THE PRESENT CASE THERE CAN BE NO DENIAL THAT THE ORDER DATED DECEMBER 6, 2007, SUFFERS FROM AN ERROR APPARENT FROM THE RECORD. THE ERROR IS IN HAVING IGNORED THE MAND ATE OF RULE 24 OF THE TRIBUNAL RULES WHICH REQUIRED THE TRIBUNAL TO D ISPOSE OF THE MATTER ON THE MERITS AFTER HEARING THE RESPONDENTS. IN THESE CIRCUMSTANCES, AN APPLICATION FOR RECTIFICATION WOU LD HE UNDER SECTION 254(2) OF THE ACT. THE RECALL OF AN ORDER WOULD WEL L 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 THAT THE MISCELLANEOUS APPLICATION FILED BY THE APPELLANT IS BARRED BY LIMITATION UNDER SECTION 254 (2) OF THE ACT AS I WAS FILED BEYOND A PERIOD OF FOUR YEARS FROM THE OR DER SOUGHT TO BE RECTIFIED. 18 BEFORE CONCLUDING, WE WOULD LIKE TO MAKE IT CLEA R THAT AN ORDER PASSED IN BREACH OF RULE 24 OF THE TRIBUNAL RULES, IS 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 SAD IK V. SANJAY RAJ SUBBA REPORTED IN [2004] 2 SCC 377 H OBSERVED AS UN DER: 'PATENT AND LATENT INVALIDITY IN A WELL KNOWN PASSAGE LORD RADCLIFFE SAID: 'AN ORDER, EVEN IF NOT MADE IN GOOD FAITH, IS STILL AN ACT CAPABLE AT LEGAL CONSEQUENCES. IT BEARS NO BRAND OF INVALIDITY UPON ITS FOREHEAD.. UNLESS THE NECESSARY PROCEEDINGS ARE TAKEN AT LAW T O ESTABLISH THE CAUSE OF INVALIDITY AND TO GET IT QUASHED OR OTHERW ISE UPSET, IT WILL REMAIN AS EFFECTIVE FOR ITS OSTENSIBLE PURPOSE AS T HE MOST IMPECCABLE OF ORDERS.' THIS MUST BE EQUALLY TRUE EVEN WHERE TH E 'BRAND OF INVALIDITY' IS PLAINLY VISIBLE : FOR THERE ALSO THE ORDER CAN EFFECTIVELY BE RESISTED IN LAW ONLY BY OBTAINING A DECISION OF THE COURT.' FURTHER, THE SUPREME COURT IN SNEH GUPTA V. DEVI SARUP [200916 S CC 194 HAS OBSERVED: 'WE ARE CONCERNED HEREIN WITH THE QUESTIO N OF LIMITATION. 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 MP.39/BANG/2017 PAGE - 8 GOOD AS A CONTESTED DECREE. SUCH A DECREE MUST BE S ET ASIDE IF IT HAS BEEN PASSED IN VIOLATION OF LAW. FOR THE SAID PURPO SE, THE PROVISIONS CONTAINED IN THE LIMITATION ACT, 1963, WOULD BE APP LICABLE. IT IS NOT THE LAW THAT WHERE THE DECREE IS VOID, NO PERIOD OF LIMITATION SHALL BE ATTRACTED AT ALL.' THEREFORE, IN THIS CASE ALSO THE PERIOD OF FOUR YEARS FROM THE DATE OF ORDER SOUGHT TO BE RECTIFIED/RECAL LED WIL L APPLY AS PROVIDED IN SECTION 254(2) OF THE ACT. THIS IS SO E VEN IF IT IS ASSUMED THAT THE ORDER DATED DECEMBER 6, 2006, IS A VOID OR DER. 19 WE SHALL NOW ANSWER THE QUESTIONS ARISING IN THIS CASE AS RA ISED BY US IN PARAGRAPH 4 ABOVE AS UNDER : QUESTION (A) : NO. THE TRIBUNAL HAS NO POWER IN TER MS OF RULE 24 OF THE TRIBUNAL RULES TO DISMISS AN APPEAL BEFORE IT F OR NON-PROSECUTION. QUESTION (B) : THE MISCELLANEOUS APPLICATION FOR RE CALL OF AN ORDER FALLS UNDER SECTION 254(2) OF THE ACT AND NOT UNDER SECTION 254(1) OF THE ACT. QUESTION (C) : DOES NOT ARISE IN VIEW OF OUR RESPO NSE TO QUERY (B) ABOVE. 20. IN VIEW OF THE REASONS GIVEN HEREINABOVE, WE FI ND THE TRIBUNAL WAS CORRECT IN DISMISSING THE MISCELLANEOUS APPLICA TION BY ITS ORDER DATED APRIL 10, 2013, AS BEING BEYOND THE PERIOD OF FOUR YEARS AS PROVIDED UNDER SECTION 254(2) OF THE ACT. 21. ACCORDINGLY, THE PETITION IS DISMISSED WITH NO ORDER AS TO COSTS. 08. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE C ASE AS WELL AS THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF BHARAT PETROLEUM CORPORATION LTD., VS. ITAT AND OTHERS (SU PRA), WE HOLD THAT THE MISCELLANEOUS PETITION FILED BY THE ASSESSEE AR E BEYOND THE PERIOD OF LIMITATION AS PROVIDED UNDER SECTION 254( 2) AND ARE NOT MAINTAINABLE. ACCORDINGLY THE SAME IS DISMISSED BEI NG BARRED BY LIMITATION. MP.39/BANG/2017 PAGE - 9 09. IN THE RESULT, THE MISCELLANEOUS PETITION FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 28TH DAY OF APRIL, 2017. SD/- SD/- (VIJAY PAL RAO) (S. JAYARAMAN) JUDICIAL MEMBER ACC OUNTANT MEMBER MCN* COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME TAX 4. THE COMMISSIONER OF INCOME TAX (A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER ASSISTANT REGISTRAR