ITO, Ward-7(2), Hyderabad V. T. Babu Reddy, Hyderabad

MA 42/Hyd/2018

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6871 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 20 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 27-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 29-06-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 07-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMISHA GUPT
• Assessee Lawyers: A V RAGHURAM
• Keywords: Period of limitation; Time period of passing order
• Section: 11

Judgement Text

MA NO 42 OF 2018 T BABU REDDY HYDERABAD. PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER M.A. NO.42/HYD/2018 (ARISING OUT OF ITA NO.1028/HYD/2016) (ASSESSMENT YEAR: 2012-13) INCOME TAX OFFICER WARD 7(2) HYDERABAD VS SRI T. BABU REDDY HYDERABAD PAN: ABJPT1273C (APPELLANT) (RESPONDENT) FOR REVENUE : SMT. AMISHA GUPT, DR FOR ASSESSEE : SHRI A.V. RAGHURAM O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS APPLICATION IS FILED BY THE REVENUE SEEKING RECTIFICATION OF THE ALLEGED MISTAKE IN THE ORDER O F THE TRIBUNAL DATED 29.09.2017. IT IS SEEN THAT THIS APPLICATION IS FILED AFTER THE DUE DATE AS PRESCRIBED IN SECTION 254(2) OF THE I.T . ACT AND THEREFORE, THE REGISTRY HAS RAISED AN OBJECTION THA T THE MISCELLANEOUS APPLICATION IS NOT MAINTAINABLE. 2. WE FIND THAT U/S 254(2), THE TIME PRESCRIBED TO FILE AN APPLICATION IS ONLY SIX MONTHS FROM THE END OF THE MONTH IN WHICH ORDER WAS PASSED. SINCE IN THE CASE BEFORE US, THE APPLICATION IS FILED BEYOND THE PRESCRIBED PERIOD AND THE TRIBUNAL DOES NOT HAVE DATE OF HEARING: 29.06 . 201 8 DATE OF PRONOUNCEMENT: 27.07.2018 MA NO 42 OF 2018 T BABU REDDY HYDERABAD. PAGE 2 OF 5 THE POWER TO CONDONE THE DELAY, (THOUGH THE REVENUE HAS NOT FILED THE SAID APPLICATION), THE APPLICATION OF THE REVEN UE IS LIABLE TO BE DISMISSED. 3. FURTHER, IN THE CASE OF GAYATRI INFRA VENTURES L TD IN M.A. NO.55/HYD/2018, THE COORDINATE BENCH (TO WHICH BOTH OF US ARE SIGNATORIES) HAS HELD AS UNDER: 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 MON TH IN WHICH THE ORDER WAS PASSED FOR FILING OF M.A. U/S 2 54(2) OF THE ACT AND THE TRIBUNAL DOES NOT HAVE THE POWER TO CONDONE DELAY IN FILING OF THE M.A BEYOND THE SAID PERIOD. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF BHARAT PETROLEUM CORPN. LTD VS. ITAT (2013) 359 ITR 371, W HILE DEALING WITH AN IDENTICAL ISSUE I.E. PERIOD OF 4 YE ARS FOR FILING OF THE APPLICATION U/S 254(2) AS WAS AVAILAB LE PRIOR TO THE AMENDMENT, HAS HELD AS UNDER: 16) IT WAS NEXT CONTENDED ON BEHALF OF THE PETITIONE R THAT THE POWER OF THE TRIBUNAL UNDER SECTION 254(2) OF THE A CT IS ONLY TO RECTIFY AN ERROR APPARENT FROM THE RECORD. IT DOES N OT EMPOWER THE TRIBUNAL TO RECALL ITS EARLIER ORDER DATED 6 DECEMBE R 2007 FOR WHICH THE MISCELLANEOUS APPLICATION WAS FILED ON 6 AUGUST 20 12. IT WAS SUBMITTED ON BEHALF OF THE PETITIONER THAT THE APPLI CATION 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 , AS UNDER SECTION 254(2) OF THE ACT ONLY THE ORDER CAN BE REC TIFIED BUT CANNOT BE RECALLED. WE FIND THAT THERE IS AN ERROR APPARENT ON RECORD AND THE MISCELLANEOUS APPLICATION IS TO CORRECT THE ERROR APPARENT FROM THE RECORD. THE CONSEQUENCE OF SUCH RECTIFICATION APP LICATION BEING ALLOWED MAY LEAD TO A FRESH HEARING IN THE MATTER AF TER HAVING RECALLED THE ORIGINAL ORDER. HOWEVER, THE RECALL, I F ANY, IS ONLY AS A CONSEQUENCE OF RECTIFYING THE ORIGINAL ORDER. IT IS P ERTINENT 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 TRIBUNA L TO RECALL AN ORDER ON RECTIFICATION APPLICATION MADE UNDER SECTI ON 254(2) OF THE ACT IS NO LONGER RESINTEGRA. THE ISSUE STANDS COVERED BY THE DECISION OF THE APEX COURT IN ASSISTANT COMMISSIONER O F INCOME TAX VS. SAURTASHTRA 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 RECORD AND AS A CONSEQUENCE THEREFORE, T RIBUNAL CAN EVEN RECALL ITS ORDER. IN THE ABOVE CASE BEFORE THE A PEX COURT ON 27 OCTOBER 2000 THE TRIBUNAL DISMISSED THE APPEAL OF ST OCK EXCHANGE MA NO 42 OF 2018 T BABU REDDY HYDERABAD. PAGE 3 OF 5 HOLDING THAT IT WAS NOT ENTITLED TO EXEMPTION UNDER SECTION 11 READ WITH SECTION12 OF THE ACT. ON 13 NOVEMBER 2000 THE STOCK EXCHANGE FILED A RECTIFICATION APPLICATION UNDER SE CTION 254(2) OF THE ACT BEFORE THE TRIBUNAL. THE TRIBUNAL BY ITS ORD ER DATED 5 SEPTEMBER 2001 ALLOWED THE APPLICATION AND HELD THA T THERE WAS MISTAKE APPARENT ON THE RECORD WHICH REQUIRED RECTI FICATION. ACCORDINGLY, THE TRIBUNAL RECALLED ITS ORDER DATED 2 7 OCTOBER 2000 FOR THE PURPOSE OF ENTERTAINING THE APPEAL AFRESH. TH E REVENUE FILED A WRIT PETITION IN THE GUJARAT HIGH COURT CHALLENGI NG THE ORDER DATED 5 SEPTEMBER 2001. THE ABOVE CHALLENGE BY THE REVENUE WAS TURNED DOWN BY THE GUJARAT HIGH COURT. THE REVENUE CARRIED THE MATTER IN APPEAL TO THE APEX COURT WHICH ALSO DISMISSE D THE APPEAL OF THE REVENUE. THE APEX COURT OBSERVED THAT THE TRI BUNAL IN ITS ORIGINAL ORDER WHILE DISMISSING THE STOCK EXCHANGE (A SSESSEE'S) APPEAL OVERLOOKED BINDING DECISIONS OF THE JURISDICTI ONAL HIGH COURT. THIS MISTAKE WAS CORRECTED BY THE TRIBUNAL UNDE R SECTION 254(2) OF THE ACT. THE SUPREME COURT HELD THAT THE RECTIFICATION OF AN ORDER STANDS ON THE FUNDAMENTAL PRINCIPLE THAT JUST ICE IS ABOVE ALL AND UPHELD THE EXERCISE OF POWER UNDER SECTION 254(2) OF THE ACT BY THE TRIBUNAL IN RECALLING ITS EARLIER ORDER D ATED 27 OCTOBER 2000. THUS RECALL OF AN ORDER IS NOT BARRED ON RECTIF ICATION APPLICATION BEING MADE BY ONE OF THE PARTIES. IN THE SE CIRCUMSTANCES, THE APPLICATION WOULD BE AN APPLICATI ON FOR RECTIFICATION OF THE ORDER DATED 6 DECEMBER 2007 AN D WOULD STAND GOVERNED BY SECTION 254(2) OF THE ACT. 17) IN THE FACTS OF THE PRESENT CASE THERE CAN BE NO D ENIAL THAT THE ORDER DATED 6 DECEMBER 2007 SUFFERS FROM AN ERROR APP ARENT FROM THE RECORD. THE ERROR IS IN HAVING IGNORED THE MANDA TE OF RULE 24 OF THE TRIBUNAL RULES WHICH REQUIRED THE TRIBUNAL TO DI SPOSE OF THE MATTER ON MERITS AFTER HEARING THE RESPONDENTS. IN THE SE CIRCUMSTANCES, AN APPLICATION FOR RECTIFICATION WOUL D LIE UNDER SECTION 254(2) OF THE ACT. THE RECALL OF AN ORDER W OULD 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 THAT MISCELLANEOUS APP LICATION FILED BY THE APPELLANT IS BARRED BY LIMITATION UNDER SECT ION 254(2) OF THE ACT AS IT WAS FILED BEYOND A PERIOD OF FOUR YEARS FRO M 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, IS AN IRREGULAR ORDER AND NOT A VOID ORDER. HOWEVER, EVEN IF IT IS ASSUMED 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 BY A COMPETENT TRIBUNAL. IN FACT, THE APEX COURT IN THE SULTAN SADIK V/S. SANJAY RAJ SUBBA REPORTED IN 2004(2) SCC 277 HAS OBSE RVED AS UNDER: ' PATENT AND LATENT INVALIDITY IN A WELL KNO WN PASSAGE LORD RADCLIFFE SAID : ' AN ORDER, EVEN IF NOT MADE IN GOO D FAITH, IS STILL AN MA NO 42 OF 2018 T BABU REDDY HYDERABAD. PAGE 4 OF 5 ACT CAPABLE OF LEGAL CONSEQUENCES. IT BEARS NO BRAND OF INVALIDITY UPON ITS FOREHEAD. UNLESS THE NECESSARY PROCEEDINGS ARE TAKEN AT LAW TO ESTABLISH THE CAUSE OF INVALIDITY AND TO GET I T QUASHED OR OTHERWISE UPSET, IT WILL REMAIN AS EFFECTIVE FOR ITS OSTENSIBLE PURPOSE AS THE MOST IMPECCABLE OF ORDERS.' THIS MUST BE EQUALLY TRUE EVEN WHERE THE BRAND OF INVALIDITY IS PLAINLY V ISIBLE, FOR THERE ALSO THE ORDER CAN EFFECTIVELY BE RESISTED IN LAW ONL Y BY OBTAINING A DECISION OF COURT.' FURTHER THE SUPREME COURT IN SNEH GUPTA V/S. DEV SA RUP (2009) 6 SCC 194 HAS OBSERVED '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 ASIDE IF IT HAS BEEN PASSED IN VIOLATION OF LAW. FOR THE SAID PURPOSE, T HE PROVISIONS CONTAINED IN LIMITATION ACT 1963 WOULD BE APPLICABLE. IT IS N OT THE LAW THAT WHERE THE DECREE IS VOID, NO PERIOD OF LIMITATION SHALL BE AT TRACTED AT ALL.' THEREFORE, IN THIS CASE ALSO THE PERIOD OF FOUR YEARS F ROM THE DATE OF ORDER SOUGHT TO BE RECTIFIED/RECALLED WILL APPLY AS P ROVIDED IN SECTION 254(2) OF THE ACT. THIS IS SO EVEN IF IT IS A SSUMED THAT THE ORDER DATED 6 DECEMBER 2006 IS A VOID ORDER. 19) WE SHALL NOW ANSWER THE QUESTIONS ARISING IN THIS 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 NON PROSECUTION. QUESTION(B): THE MISCELLANEOUS APPLICATI ON FOR RECALL OF AN ORDER FALLS UNDER SECTION 254(2) OF THE ACT AN D NOT UNDER SECTION 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 FIN D THE TRIBUNAL WAS CORRECT IN DISMISSING THE MISCELLANEOUS APPLICATION BY ITS ORDER DATED 10 APRIL 2013 AS BEING BEYOND THE PERIOD OF F OUR YEARS AS PROVIDED UNDER SECTION 254(2) OF THE ACT. 21) ACCORDINGLY, THE PETITION IS DISMISSED WITH NO OR DER AS TO COSTS. THIS DECISION WAS FOLLOWED BY THE COORDINATE BENCH OF THE TRIBUNAL AT JAIPUR IN THE CASE OF VINOD SINGH, JAIPUR VS. ITO, JAIPUR DATED 6.2.2018 IN MA NO.12/JP/2018 IN ITA NO.454/JP/2015, WHEREIN UNDER SIMILAR CIRCUMSTANCES AS IN THE CASE BEFORE US, THE M.A FI LED BEYOND THE LIMITATION PERIOD OF SIX MONTHS WAS DISMISSED. IN VIEW OF THE SAME, WE ARE CONSTRAINED TO MA NO 42 OF 2018 T BABU REDDY HYDERABAD. PAGE 5 OF 5 DISMISS THE MISCELLANEOUS APPLICATION AS BARRED BY LIMITATION. 4. RESPECTFULLY FOLLOWING THE SAME, THE MISCELLANEO US APPLICATION FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH JULY, 2018. SD/- SD/- (S.RIFAUR RAHMAN) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 27 TH JULY 2018. VINODAN/SPS COPY TO: 1 INCOME TAX OFFICER, WARD 7(2) 8 TH FLOOR, SIGNATURE TOWERS, KONDAPUR, HYDERABAD 2 S/SHRI A.V.RAGHURAM, P. VINOD, ADVOCATES, 610 BAB UKHAN ESTATE, BASHEERBAGH, HYDERABAD 500001 3 CIT (A)-3 HYDERABAD 4 PR. CIT 3 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER