SHIRISH M DALVI, KALYAN V. DCIT CIR 23(3), MUMBAI

MA 435/MUM/2023

• Counselvise Citation: [2023] 102 COUNSELVISE.COM (IT) 0084 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-11-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 19-10-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 14-06-2023
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP SINGH KARHAIL (JUDICIAL MEMBER) M.A. No. 435/MUM/2023 (Arising out of MA No. 436/MUM/2022) Assessment Year: 2010-11 Shirish M. Dalvi D Block, 1 st floor, Zojwala Complex, Sahajanand Chowk, Kalyan-421301. Vs. DCIT, Circle-23(3), 3 rd floor, C-10, Pratyaksha Kar Bhavan, Bandra East, Mumbai-400051. PAN No. AADPD 0358 H Appellant Respondent Assessee by : Mr. Deepak Trashawala Revenue by : Mr. P.D. Chougule, Sr. DR Date of He aring : 20/10/2023 Date of p ronounceme nt : 08/11/2023 ORDER PER OM PRAKASH KANT, AM By way of this Miscellaneous Application, the assessee is seeking rectification/recall of the order dated 28.04.2023 passed in Miscellaneous Application No. 436/Mum/2022 which arose in ITA No. 3545/Mum/2014 for assessment year 2010-11. 2. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. As per the provisions of section 254(2) of Income-tax Act, 1961 (in short ‘the Shirish M. Dalvi 2 M.A No. 435/Mum/2023 Act’) ,a Miscellaneous Application lies only against order passed by the ITAT u/s 254(1) of the Act and not against any order passed u/s 254(2) of the Act. For ready reference, said section is reproduced as under: “The Appellate Tribunal may, at any time within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub- section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the Assessing] Officer”. 3. Further, we find that the Special Bench of the Tribunal in case of SHRI.PADMA PRAKASH v/s ITO in MISCELLANEOUS APPLICATION NO.57/Del/2010 (In M.A.No.402/Del/2009 and M.A.No.05/Del/2008 arose In ITA No.2964/Del/2002) for Assessment Year : 1995-96 held as under: 9. We have carefully considered the rival submissions in the light of material placed before us. It is true that sub-section (2) of Section 254 can be invoked only in a situation if there is a mistake in the order passed by the Tribunal under sub-section (1) of Section 254. The impugned miscellaneous application filed by the assessee is against the order passed on 27.11.2009 which is an order passed u/s 254(2). Therefore, principally, the application filed by the assessee has to be rejected on this ground alone and for this purpose, reliance can be placed on the following decisions:- (i) CIT Vs. President, Income Tax Appellate Tribunal – 196 ITR 838 (Orissa) wherein it has been held that to attract applicability of Section 254(2), a mistake which is sought to be rectified must be apparent from Shirish M. Dalvi 3 M.A No. 435/Mum/2023 record and the same must be in any order passed under sub-section (1) of Section 254. The order referred to in Section 254(1) is one relating to an appeal filed either by the assessee or by the Revenue. The “appeal” referred to in the provision is one filed u/s 253. Therefore, the order which can be rectified must be one which has been passed by the Tribunal in an appeal filed u/s 253. An order rejecting an application for rectification u/s 254(2) cannot be rectified u/s 254(2). The same may relate to an appeal but is not an order passed by the Tribunal under sub-section (1) of Section 254 and thus, it was held that subsequent application filed by the assessee was rightly rejected by the Tribunal. www.taxguru.in 6 MA-57/Del/2010 (ii) In the case of Mentha & Allied Products Co.Ltd. Vs. ITAT – 244 ITR 470 (Del), after referring to the provisions of Section 254(1) and (2), it was held as under:- “7. The relevant provisions of s. 254 read as under: “254. Orders of Appellate Tribunal. – (1) The Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. (2) The Tribunal may, at any time within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-s. (1) and shall make such amendment if the mistake is brought to its notice by the assessee or the AO;.......” The aforenoted provisions of law are clear and unambiguous. A bare reading whereof leaves no doubt in our mind that the Tribunal is competent to rectify a mistake apparent from the record and amend any order which has been passed under sub- Shirish M. Dalvi 4 M.A No. 435/Mum/2023 s.(1). Admittedly, by the impugned order, the Tribunal has sought to rectify the order passed by it under s. 256(1) of the Act and not an order passed under s. 254(1). We have no hesitation in holding that the Tribunal is not clothed with an inherent power to rectify/recall an order passed under s. 256(1) of the Act by taking recourse to s. 254(2) of the Act and, therefore, the impugned order is illegal and invalid. The view taken by us finds support from a decision of this Court in CIT vs. Kabir Das Investment Ltd. (1995) 124 CTR (Del) 259 : (1994) 210 ITR 898 (Del) : TC 55R.777.” 10. In the case of CIT Vs. Aiswarya Trading Co. – 196 Taxman 385 (Ker.), it was held that the Tribunal was justified in refusing to entertain an application filed by the Revenue under Section 254(2) to rectify the order issued by the Tribunal in an earlier rectification application filed by the assessee, as the second application on the very same issue is not maintainable before the Tribunal. 11. In the case of Dr.S.Panneerselvam Vs. ACIT – 319 ITR 135, it was held that the Tribunal having allowed first rectification petition, second petition was not maintainable; remedy by way of appeal was the only course open. 12. If the application filed by the assessee is viewed in the light of aforementioned judicial pronouncements, then it will become clear that the relief which is being sought by the assessee by way of impugned rectification application is not legally tenable for the reason that the Tribunal has no power to adjudicate upon subsequent application filed Shirish M. Dalvi 5 M.A No. 435/Mum/2023 u/s 254(2). Here, it may be the case of the assessee that earlier order against which impugned rectification application is filed is also an order passed on subsequent application, then the only course permissible to the assessee is to file an appeal against that order and not to approach the Tribunal to contend that the said order was an invalid order, therefore it should be recalled. 4. Further, we note that the Hon’ble Karnataka High Court in order dated 25/03/2019 in the case of PCIT Vs Appana Bhatia in ITA No. 847 of 2018 held as under: 7. Section 253 of the Act provides an appeal to the Appellate Tribunal, which would be considered under Section 254 of the Act. Section 254(1) contemplates hearing of the appeal by the Appellate Tribunal and passing of the order thereon. Sub-section (2) of Section 254 of the Act would empower the Tribunal to rectify any mistake apparent from the record, amend any order passed under sub-section (1), if the mistake is brought to its notice by the parties to the proceedings, within six months from the end of the month in which the order was passed. From a reading of sub-section (2) of Section 254, it would be clear that the Tribunal possesses the power to 10 rectify any mistake apparent on the record in the order passed by it under sub-Section (1). If the order under sub-section (2) of Section 254 is passed, the said order would not be available for rectification of mistake again under Section 254 (2) of the Act. The order passed under Section 254(2) cannot be rectified nor amended by invoking sub-section (2) of Section 254 once again. Repetitive applications under Section 254 (2) of the Act are not permissible. In the case on hand also, the Tribunal in exercise of its power under sub-section (2) of Section 254 has rectified the mistake apparent on the record and deleted the double addition of income in respect Shirish M. Dalvi 6 M.A No. 435/Mum/2023 of the assessee. Thereafter, the Revenue again files an application under sub-section (2) of Section 254 seeking rectification of the order passed under sub-section (2) of Section 254 which is not maintainable. The Tribunal has rightly dismissed the Misc. petition filed by the Revenue. There is no error or omission in the order passed by the Tribunal. 11 8. No substantial question would arise in this appeal. Hence, the appeal is dismissed 5. The present Miscellaneous Application has been preferred by the assessee against the order passed u/s 254(2) of the Act dated 28.04.2022 and therefore, following the precedents mentioned above, the miscellaneous application of the assessee is rejected as non maintainable 3. In the result, the Miscellaneous Application of the assessee is rejected. Order pronounced in the open Court on 08/11/2023. Sd/- Sd/- (SANDEEP SINGH KARHAIL) (OM PRAKASH KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 08/11/2023 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, //True Copy// Shirish M. Dalvi 7 M.A No. 435/Mum/2023 (Assistant Registrar) ITAT, Mumbai