DCIT, Cir. 7(1) , Kolkata V. Dalmia Laminators Ltd, Kolkata

MA 50/KOL/2023

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 6730 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-10-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 05-10-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 31-07-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Period of limitation; Set aside
• Section: 11; 254(2); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH ‘B’ KOLKATA BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI SONJOY SARMA, JUDICIAL MEMBER MA No. 50/KOL/2023 Assessment Year: 2014-15 [Arising out of ITA No. 102/KOL/2022] DCIT, Circle-7(1), Kolkata Vs. Dalmia Laminators Ltd. 130, Cotton Street, Kolkata- 700007. PAN: AABCD 1748 C Appellant Respondent Present for: Assessee by : Shri N.S. Saini, AR Revenue by : Shri P.P. Barman, ACIT, Sr. DR Date of Hearing : 06.10.2023 Date of Pronouncement : 09.10.2023 ORDER PER SONJOY SARMA, JUDICIAL MEMBER: By virtue of this miscellaneous application filed by the revenue seeking recall of the Tribunal’s order dated 14.09.2022. 2. The captioned Miscellaneous Application filed on 01.08.2023 which is clearly beyond the due date as prescribed u/s 254(2) of the Act. At the time of hearing, the ld. AR has pointed out the above defect by stating that the MA filed by revenue is beyond the time as prescribed u/s 254(2) of I.T. Act, 1961 and therefore, the MA is not maintainable. The ld. DR submitted that the revenue would like to get the instructions from the AO for filing of a petition of condonation of delay. However, from the fact we find that in the case of Gayatri Infra Ventures Ltd. in M.A. No. 55/Hyd/2018, the co-ordinate bench of this Tribunal has held that the delay in filing the Miscellaneous Application cannot be condoned. The relevant paras of the Tribunal order (supra) are extracted herein below for reference: M.A. 50/Kol/2023 Assessment Year: 2014-15 Dalmia Laminators Ltd. 2 “5. We find that w.e.f 1.6.2016, the statute has provided only a period of six months from the end of the month in which the order was passed for filing of M.A. u/s 254(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, while dealing with an identical issue i.e. period of 4 years for filing of the application u/s 254(2) as was available prior to the amendment, has held as under: “16) It was next contended on behalf of the petitioner 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 6 December 2007 for which the miscellaneous application was filed on 6 August 2012. It was submitted on behalf of the petitioner that the application under Section 254(1) of the Act would be the only provision 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 rectified 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 application being allowed may lead to a fresh hearing in the matter after having recalled the original order. However, the recall, 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 recall 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 decision of the Apex Court in Assistant Commissioner of 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, Tribunal can even recall its order. In the above case before the Apex Court on 27 October 2000 the Tribunal dismissed the appeal of Stock Exchange 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 Section 254(2) of the Act before the Tribunal. The Tribunal by its order dated 5 September 2001 allowed the application and held that there was mistake apparent on the record which required 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 by the Gujarat High Court. The revenue carried the matter in appeal to the Apex Court which also dismissed the appeal of the revenue. The Apex Court observed that the Tribunal in its original order while dismissing the Stock Exchange (assessee's) appeal overlooked binding decisions of the jurisdictional High Court. This mistake was corrected by the Tribunal under Section 254(2) of the Act. The Supreme Court held that the rectification of an order stands on the 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 order is not barred on rectification application being made by one of M.A. 50/Kol/2023 Assessment Year: 2014-15 Dalmia Laminators Ltd. 3 the parties. In these circumstances, the application would be an application 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 no denial that the order dated 6 December 2007 suffers from an error apparent 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 circumstances, 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 that Miscellaneous Application filed by the appellant is barred by limitation under Section 254(2) of the Act as it was filed beyond a period of four years from the order sought to be rectified. 18) Before concluding, we would like to make it clear 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 observed as under: " 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 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 it 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 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 vs. Devi Sarup (2009) 6 SCC 194 has observed as under: "We are concerned herein with the question of limitation. The compromise decree, as indicated herein before, even if void was required to be set aside. A consent decree as is well 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, the provisions contained in Limitation Act 1963 would be applicable. 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/recalled will apply as provided in Section 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 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 application for recall 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 M.A. 50/Kol/2023 Assessment Year: 2014-15 Dalmia Laminators Ltd. 4 response to query (b) above. 20) In view of the reasons given herein above, we find the Tribunal was correct in dismissing the Miscellaneous Application by its order dated 10 April 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”. We after hearing the rival submission of the parties and following the decision rendered by Hon’ble Supreme Court in the case of Sneh Gupta vs Devi Sarup (supra) instant miscellaneous application filed by the revenue is hereby dismissed. 4. In the result, miscellaneous application filed by the revenue is dismissed. Order pronounced in the open court on 09.10.2023. Sd/- Sd/- (Rajesh Kumar) (Sonjoy Sarma) Accountant Member Judicial Member Dated: 09.10.2023. Biswajit Copy of the order forwarded to: 1. Appellant- DCIT, Circle-7(1), Kolkata. 2. Respondent – Dalmia Laminators Ltd. 3. Ld. CIT 4. Ld. CIT(A) 5. Ld. DR True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata