AI Insights
The case involves four Miscellaneous Applications (MAs) filed by the Revenue against various companies, challenging the Tribunal's earlier decisions which had quashed the assessment orders on the grounds of being time-barred. The Revenue argued that the assessments were completed within the extended time limits due to procedural extensions and references to the FT&TR Division for verification of international transactions. The Tribunal consolidated the hearings for these MAs, considering the common legal and factual issues across the cases. The Tribunal dismissed the MAs, affirming that the assessments were not time-barred and the original orders were correctly decided.
Appeal details
Counselvise Citation
[2023] 140 COUNSELVISE.COM (IT) 301722 (ITAT-SURAT)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 month(s)
Appellant
Respondent
Appeal Type
Miscellaneous Application
Pronouncement Date
29-10-2023
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
DB
Next Hearing Date
26-10-2023
Assessment Year
2012-2013
Appeal Filed On
29-08-2023
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM ͪवͪवध आवेदन /MA No. 50/SRT/2023 [Arising in ITA No. 436/SRT/2022] Assessment Years: (2012-13) (Physical Court Hearing) Assistant Commissioner of Income Tax, Central Circle-2, Surat, Room No.503, 5 th Floor, Aayakar Bhawan, Majura Gate, Surat-395001. Vs. M/s Saffron Gems Pvt. Ltd., 103, Vedant Complex, Bhojabhai Ni Sheri, Mahidharpura, Surat- 395003 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AANCS 2828 J (अपीलाथŎ /Applicant) (ŮȑथŎ/Respondent) ͪवͪवध आवेदन /MA No. 51/SRT/2023 [Arising in ITA Nos. 350 & 346/SRT/2022] Assessment Years: (2017-18) Deputy Commissioner of Income Tax, Central Circle-3, Surat, Room No.507, 5 th Floor, Aayakar Bhawan, Majura Gate, Surat-395001. Vs. M/s Nobal Jewells Pvt. Ltd., Office No.101, 1 st Floor, Millenium Trade Centre, Thoba Sheri, Surat City, Mahidharpur, SO, Surat-395003 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AAECN 8548 D (अपीलाथŎ /Applicant) (ŮȑथŎ/Respondent) ͪवͪवध आवेदन /MA No. 52/SRT/2023 [Arising in ITA Nos. 431 & 440/SRT/2022] Assessment Years: (2012-13) Deputy Commissioner of Income Tax, Central Circle-3, Surat, Room No.507, 5 th Floor, Aayakar Bhawan, Majura Gate, Surat- 395001. Vs. M/s Marudhar Diamond Pvt. Ltd., 412, Dharmanandan Chamber, Balisheri, Mahidhar Pura, Surat-395003 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AAECM 8792 L (अपीलाथŎ /Applicant) (ŮȑथŎ/Respondent) Page | 2 MA Nos. 50- 53/SRT/2023 ͪवͪवध आवेदन /MA No. 53/SRT/2023 [Arising in ITA Nos. 351 & 347/SRT/2022] Assessment Years: (2017-18) Deputy Commissioner of Income Tax, Central Circle-3, Surat, Room No.507, 5 th Floor, Aayakar Bhawan, Majura Gate, Surat-395001. Vs. M/s Antique Exim Pvt. Ltd., A-104, Shilalekh Commercial Co-Op. Society, Bhoja Bhai Ni Sheri, Mahidharpur, Surat- 395003 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AAJCA 9815 B (अपीलाथŎ /Applicant) (ŮȑथŎ/Respondent) Ǔनधा[ǐरती कȧ ओर से /Assessee by Shri Prakash Jhunjhunwala, CA & Shri Pawan Jagetia, CA राजèव कȧ ओर से /Respondent by Shri Ashish Pophare, CIT-DR & Shri Vinod Kumar, Sr. DR सुनवाई की तारीख /Date of Hearing 27/10/2023 उɮघोषणा कȧ तारȣख Date of Pronouncement 30/10/2023 आदेश / O R D E R PER DR. A. L. SAINI, ACCOUNTANT MEMBER: By way of these captioned four Miscellaneous Applications, the Revenue has sought to point out that a mistake apparent from record within the meaning of section 254(2) of the Income Tax Act, 1961(in short ‘the Act’) has crept in the order of the Tribunal dated 24.04.2023. 2. Since the issue involved in all the Miscellaneous Applications are common and identical, therefore these Miscellaneous Applications have been heard together and are being disposed of by this consolidated order. For the sake of convenience, the facts, as well as, contention raised by the Revenue, in the Miscellaneous Application No.50/SRT/2023, for assessment year 2012-13, in the case of M/s Saffron Gems Pvt. Ltd, have Page | 3 MA Nos. 50- 53/SRT/2023 been considered for deciding these four Miscellaneous Applications en masse. The mistake apparent from record, pointed out by the Revenue in this Miscellaneous Application, are as follows: “The Hon’bleI TAT has relied upon the submissions of the assessee and accepted the additional technical ground of appeal. This additional ground was not relied before in this case. The additional ground of appeal filed by the assessee is as under: “1. On the facts and in the circumstances of the case and in law, the assessment order passed u/s 143(3) is bad-in-law, since it had been passed beyond the limitation period specified u/s 153(1) of the Act.” The Hon’ble ITAT has not appreciated actual facts in this case. In this case, information was disseminated by the DCIT, CC-1(2), Ahmedabad on 28.02.2019 to jurisdictional assessing officer of the assessee i.e., erstwhile ITO, Ward- 2(1)(2), Surat. On the basis of such information, the assessing officer re-opened the case u/s 147 of the IT Act. Thereafter, assessee’s case was centalized with this charge by centralization order u/s 127 of the IT Act. This case was centralized to CentralCircle-2, Surat. During the year under consideration assessee has made total transaction with frontline Diamond Pvt. Ltd., Company controlled and managed by Shri Shripal Vora to the tune of Rs.28,87,57,000/- and these are non-genuine transaction carried out by the assessee. The sale and purchase shown by the assessee-company are nothing but accommodation entries availed by the assessee during the year under consideration. As per notice issued u/s 148 on 30.03.2019, the time barring date for completion of assessment u/s 143(3) r.ws.148 was on 31.12.2019. However, in this case, the assessing officer had made a reference to FT&TR (Foreign Tax & Tax Research Division) as per provision u/s 90 & 90A on 03.12.2019 and confirmation was received from Foreign Tax & Tax Research Division, Exchange of information cell, India letter dated 20.12.2019 through proper channel. As per the existent provisions of Income Tax Act,1961, the assessment proceedings in this case got extended by the time limit of one year to frame the assessment order in view of Explanation 1(x) of Section 153 of the Act, Section153 of Explanation 1(x) is as under: “.... The period commencing from the date on which a reference or fist of the references for exchange of information is made by an authority competent under an agreement referred to in section 90 or section 90A and ending with the date on which the information requested is last received by the [Principal Commissioner or] 22 Commissioner or a period of one year, whichever is less..... ..” As the assessing officer had referred the case in FT&TR for verification of transaction carried out by the company with the parties outside India and it is therefore covered by the provision of explanation 1(x) of Section 153 of the IT Act. Hence, the date of limitation in the instant case of the assessee comes in 31.12.2020. Subsequently, due to Covid pandemic period, time limit for Page | 4 MA Nos. 50- 53/SRT/2023 completing the assessment proceedings were extended to 30.09.2021 by Notification issued of CBDT. Facts on time barring dates of the cases are as under: Sr.No. Particulas Dates 1 Notice u/s 148 of the Act issued 30.03.2019 2 Time limit for completion of assessment u/s 143(3) r.w.s. 147 of the Act 31.12.2019 3 Time limit extended up to 31.12.2020 as per provision of Explanation(x) of section 153 of the IT Act, 1961 31.12.2020 4 Time limit extended Notification S.O.4805(E) [No.93/2020/F.No.370142/35/2020- TPL] 31.03.2021 5 Time limit extended Notification S.O. 1703(E) [No.38/2020/F.No.270142/35/2020- TPL] 30.04.2021 6 Time limit extended Notification S.O. 2580(E) [No.74/2021/F.No.370142/35/2020- TPL] 30.09.2021 7 Assessment order passed u/s 143(3) r.w.s.147 of IT Act. 30.09.2021 Assessment in this case was finalized on 30-09-2021, hence, the assessment was not time barred in the case of the assessee. The Hon’ble ITAT has simply quashed the assessment proceedings on technical ground and had not adjudicated the facts of the case. Therefore, this ground is a reason for filing Miscellaneous Application before Hon’ble ITAT. 6. In the view of the above facts and circumstances it is hereby submitted that a Miscellaneous Application may be accepted.” 3. Thus, Ld.DR for the Revenue argued that Assessing Officer had referred the case in FT&TR for verification of transaction carried out by the company with the parties outside India and it is therefore covered by the provision of explanation 1(x) of section 153 of the Income Tax Act. Hence, the date of limitation in the instant case of the assessee, comes in Page | 5 MA Nos. 50- 53/SRT/2023 31.12.2020. Subsequently, due to Covid pandemic period, time limit for completing the assessment proceedings were extended to 30.09.2021, by Notification issued of CBDT. The assessment order in this case was finalized on 30-09-2021, hence, the assessment was not time barred in the case of the assessee. Learned DR stated that said legal issue was not argued properly during the course of hearing of original appeal because the relevant documents were not available at that point of time. Now the Revenue is ready to argue on this legal issue again with relevant documents, therefore, the Tribunal may give an opportunity to the Revenue to re-argue the case on such legal issue afresh. Therefore, order of the Tribunal my be recalled and matter may be again adjudicated on merit. 4. On the other hand, Shri Prakash Jhunjhunwala, Learned Counsel for the assessee, vehemently argued that as per provisions of Section 254(2) of the Act, the Tribunal does not have power to re-call the order, as there is no mistake apparent from record. The Ld. Counsel for the assessee states that as per sub-Rule-6 of Rule 18 of the Income Tax (Appellate Tribunal) Rules, 1963 the documents that are referred to and relied upon by the parties during the course of arguments shall alone be treated as part of the record of the Tribunal. Therefore, the documents/evidences which are being submitted by the Revenue before the Bench, during the course of proceedings of Miscellaneous Applications, were not part of the documents, during the original hearing of the case. Therefore, the Revenue cannot submit the new document or evidence before the Tribunal during the course of proceedings of Miscellaneous Applications, taking the plea that these new document or evidences were not available during the course of original hearing. If such type of new documents or evidences are allowed to argue during the course of proceedings of Miscellaneous Applications, then in that circumstances there would by never ending process and nobody will approach the High Page | 6 MA Nos. 50- 53/SRT/2023 Court against the order of the Tribunal, because the Tribunal would be re- writing its own orders, which are not permitted by section 254(2) of the Act. Under section 254(2) of the Act only mistake apparent from record may be rectified therefore debatable issue and legal issue cannot be rectified. 5. Shri Jhunjhunwala, further pointed out that that as per Rules 23 and 24 of the Income Tax (Appellate Tribunal) Rules, 1963, the order passed on merit after hearing both the parties, cannot be re-called just because one of the parties to the appeal wanted to file new evidence/documents. The Ld. Counsel also pointed out that there is no mentioned in the assessment order about reference to FT&TR Division, and now the Revenue wants to submit new evidence/documents before the Tribunal and such fresh evidences should not be adjudicated by way of Miscellaneous Application. Therefore, ld Counsel contended that the Tribunal does not have power to review its own order, hence, all the four Miscellaneous Applications should be dismissed. 6. We heard both sides in detail and also perused the records of the case including the paper book filed by the assessee. We note that during the course of original hearing, the Tribunal has asked especially from the Ld. DR of the Revenue, to submit its objection, on legal issue of time limit, and also asked to submit the objections about the reference, if any, made to FT&TR Division. In response to that Ld. DR for the Revenue argued and also submitted the written submissions, prepared by the Assessing Officer, during the course of hearing. Therefore, it is not the case of the Revenue that Tribunal did not hear the Revenue about the reference, if any, made to FT&TR Division, during the original hearing. The verbal arguments made by the DR for the Revenue, as well as written submissions made by ld DR Page | 7 MA Nos. 50- 53/SRT/2023 for the Revenue, during the original hearing, have been considered by the Tribunal in its order dated 24.04.2023. Hence, order passed by the Tribunal on legal issue, in this scenario, should not be recalled. We have gone through the order sheet of the Tribunal and noted that Tribunal has given enough opportunity to the Revenue to represent its case, and considered the verbal arguments as well as written submission of Revenue. 7. Now, the plea of ld DR for the Revenue is that Income Tax Department (Assessing Officer) has got new documents and evidences, and requested the Bench to consider them and re-write the order again, which is according to us is not permissible. By way of Miscellaneous Applications, the new documents and evidence should not be entertained to recall the original order and to rewrite the order again as per the wish of the Revenue, as it is not permitted by the provisions of section 254(2) of the Act. We note that Tribunal has adjudicated the issue considering the arguments of Revenue and written submissions of Revenue, and arguments of Ld. Counsel for the assessee and reached on the conclusion. The conclusion so reached by the Tribunal is reproduced below: “12. Shri Prakash Jhunjhunwala, Learned Counsel for the assessee, argued on legal/technical ground No.1 taking the “lead” case in ITA No.351/SRT/2022, for A.Y. 2017-18 and submitted that assessee filed return of income u/s 139(1) of the Act on 06.10.2017. Thereafter a notice u/s 143(2) was served by Assessing Officer on 27.02.2018. The Ld. Counsel stated that time limit for completion of assessment u/s 153(1) was within 21 Months from the end of the assessment year in which the income was first assessable, that is, on 31.12.2019. In other words, the time limit for passing the assessment was expired on 31.12.2019, that is, assessment order for assessment year 2017-18, must have been framed/passed on or before 31.12.2019. However, the assessment order has framed/passed by the Assessing Officer u/s 143(3) of the Act on 30.09.2021, which is a time barred assessment. Therefore, assessment order passed by the Assessing Officer u/s 143(3) of the Act dated 30.09.2021, is not within the time-limit for completion of assessment u/s 153(1) of the Act. Hence, ld Counsel pleaded that it is a time barred assessment therefore the entire assessment should be quashed and appeal of the assessee may be allowed. 13. On the other hand, Ld. CIT-DR for the Revenue submitted that the assessment order was framed within the extended period allowed by the Income Tax Act. Therefore, assessment should not be time barred and assessment framed by the Assessing Officer Page | 8 MA Nos. 50- 53/SRT/2023 should not be quashed. Apart from this, Ld. CIT-DR submitted before the Bench a written submission about the time limit, which is reproduced below: “This case as selected for scrutiny through CASS and notice u/s 143(2) of the Act bearing No. ITBA/AST/S/143(2)/2018-19/1012656394(1) was issued on 27.09.2018 and duly served upon the assessee. Subsequently, order u/s 143(3) of the Act was passed on 30.09.2021 determining total income of Rs.57,44,33,240/-. The assessee as well as department both preferred the appeal before your honour. During the course of appellate proceedings, these company has filed additional ground on 17.3.2023, relevant part of the same which is reproduced as hereunder: The assessee prefers an additional ground of appeal against an order passed by Ld. Commissioner of Income Tax (Appeal)-4, Surat dated 28/09/2022 on following amongst other grounds each of which are without prejudice to any other:- 1.0 On the facts and circumstances of the case and in law, the assessment order passed u/s 143(3) dated 30/09/20021 is bad-in-law, since had been passed beyond the limitation period specified u/s 153(1) of the Act;’ 1. In the additional ground of the appeal the assessee company has taken shelter under time limits specified in the provision of Section 153(1) of the Act, the relevant part of the same is reproduced as hereunder: [Time limit for completion of assessment, reassessment and recomputation. 153.(1) No order of assessment shall be made under section 143 or section 144 at any time after the expiry of twenty-one months from the end of the assessment year in which the income was first assessable: [Provided that in respect of an order of assessment relating to the assessment year commencing on the 1 st day of April, 2018, the provisions of this sub-section shall have effect, as if for the words “twenty-one months”, the words “eighteen months” had been substituted: Provided further that in respect of an order of assessment relating to the assessment year commencing on or after the 1 st day of April, 2019, the provisions of this sub-section shall have effect, as if for the words “twenty-one months”, the words “twelve months” had been substituted.] 1.2 For counter argument for the additional grounds of appeal filed by the assessee, it is to enunciated that the Govt. of India published Gazette of India in the title of ‘THE TAXATION AND OTHER LAWS RELAXATION AND AMENDMENT OF CERTAIN PROVISIONS) ACT 2020 No.38 of 2020. By publishing this Gazette, certain dates were specified in section 3(1) of this Gazette. In this it was clearly mentioned that any time- limit has been specified in, or prescribed or notified under the specified Act which falls during the period from the 20 th day of March-2020 to the December, 2020 or such other date after the 31 st day of December, 2020. Further, this time-line was extended upto 30 th September by issuing/publishing several notifications and press release. The details of this Gazette, notifications and press release is enlisted as under: Sr.No. Notification No. Date extended upto Remarks Page | 9 MA Nos. 50- 53/SRT/2023 1 THE TAXATION AND OTHER LAWS (RELAAXTION AND AMENDMENT OF CERTAIN PROVISIONS) ACT 2020 No.38 of 2020 Not applicable Copy enclosed 2 Notification S.O 4805(E) [No.93/2020/F. No.370142/35/2020-TPL] 31.03.2021 Copy enclosed 3 Notification S.O 1703(E) [No.38/2021/F. No.370142/35/2020-TPL] 30.04.2021 Copy enclosed 4 Press Release dated 21.04.2021 30.06.2021 Copy enclosed 5 Notification S.O. 2580(E) [No.74/2021/F. No.370142/35/2020-TPL] 30.09.2021 Copy enclosed 2. In view of the above Notification and Press Release the time limit was extended passing the assessment order u/s 143(3) of the Act upto 30 th September-2021. The Order in question was passed on 30.09.2021 which is in due time hence not barred from limitation period specified in section u/s 153(1) of the Act. Therefore, the additional ground taken by the assessee is not maintainable. 2.1 In the light of above facts, I pray before your honour that the additional ground taken by the assessee may kindly be rejected.” 14. We heard both sides in detail and also perused the records of the case including the paper book filed by the assessee. The necessary facts of the case have already been discussed in paragraphs above. On examination of the facts and legal issue involved in the assessee`s case, we note that assessment/reassessment framed/passed by the Assessing Officer is in violation of the provisions of the Act, that is, it is outside the time limit for completion of assessment u/s 153(1) of the Act, which was within 21 Months. In the assessee’s case the assessment was not framed/passed by the Assessing Officer within 21 months from the end of the assessment year in which the income was first assessable, that is, on 31.12.2019. The Assessing Officer has passed/framed assessment order u/s 143(3) of the Act on 30.09.2021, which is beyond the time-limit for completion of assessment u/s 153(1) of the Act. The sequence of events narrated by Ld. Counsel is reproduced below: Sequence of Events: Return of income u/s 139(1) 06.10/2017 Notice u/s 143(2) served 27/09/2018 Page | 10 MA Nos. 50- 53/SRT/2023 Time limit for completion of the assessment u/s 153(1) (within 21 months from end of assessment year in which the income was first assessable) 31/12/2019 Assessment order passed u/s 143(3) 30/09/2021 Therefore, assessment order framed by the Assessing Officer is non est in the eye of law, hence liable to be quashed. 15. We have examined these above narrated facts with help of copy of Income Tax Return (ITR) filed before us for A.Y. 2017-18, u/s 139(1) of the Act, wherein it is mentioned that ITR was filed by assessee u/s 139(1) on 06.10.2017. We have examined the notice under section 143(2) of the Act, dated 27.09.2018, issued by the Assessing Officer, which is placed in paper book page-2 filed by the assessee. We have also examined the assessment order framed by the Assessing Officer u/s 143(3) of the Act on 30.09.2021 (vide intimation letter for order u/s 143(3) dated 01.10.2021, which is placed at page-3 of the paper book filed by the assessee). We note that as per section 153(1) of the Act, the time limit for completion of assessment u/s 153(1) of the Act was within 21 months from the end of assessment year, in which the income was first assessable and in assessee`s case it expires on 31.12.2019. Therefore, the Assessing Officer should have passed assessment order u/s 143(3) of the Act on or before 31.12.2019. However, the Assessing Officer has passed/framed assessment order u/s 143(3) of the Act on 30.09.2021, which is beyond the time-limit for completion of assessment u/s 153(1) of the Act. Therefore, based on this factual position, clearly the assessment order framed by the Assessing Officer is time barred and hence liable to be quashed. 16. We do not agree with arguments advanced by the Ld. CIT-DR for the Revenue to the effect that assessee’s case falls in the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 because “The Taxation and other Laws (relaxation and Amendment of Certain Provisions) Act, 2020 came into effect from 20.03.2020 to December, 2020 and further the time-limit was extended upto 30.09.2021.Therefore, we note that assessee’s case does not fall even in the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 because “The Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 came into effect from 20.03.2020 to December, 2020 and further the time-limit was extended upto 30.09.2021, however in the assessee’s case under consideration, the assessment must have been framed before 31.12.2019, which is prior to insertion of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Hence these amended provisions does not apply to the assessee under consideration. 17. We note that Constitution of India, vide Article 265 of the Constitution of India, which lays down that, “No tax shall be levied or collected except by authority of law”. The Hon’ble Supreme Court of India has held that the provision under Article 265 of the Constitution of India is applicable not only for levy but also for the collection of taxes and the expression “assessment” within its compass covers both the aspects carried out by the executive functionary. Chottabhai Vs. Union of India 1962 SCR Supl.2 1006. Therefore, it is required that whole of the process of taxation must follow the procedures which are valid under the law and must adhere to law i.e. substantive one as well as procedural one too. Therefore, in other words it is provided in the Constitution of India that Page | 11 MA Nos. 50- 53/SRT/2023 every step should be taken to ensure that levy and collection of the taxes is strictly in accordance with law – not only substantive one but the procedural law, as well. 18.Time limit is laid down for dealing with the return of income filed by an assessee. The time limit for completion of assessment u/s 153(1) of the Act, in the assessee`s case is within 21 months. In the assesee`s case the assessment was not framed/passed by the Assessing Officer within 21 months from the end of the assessment year in which the income was first assessable, that is, on 31.12.2019. The Assessing Officer should follow the time limit prescribed under the Act, otherwise assessment order passed by him will not be recognized in the eye of law. Why the time limit in the Income Tax Act is so necessary? This is to ensure finality to all matters. Purpose behind time limit laid down in various provisions are: (i) To promote Repose. In the context of limitation of actions, "repose" includes at least four distinct but overlapping concepts: (a) to allow peace of mind; (b) to avoid disrupting settled expectations; (c) to reduce uncertainty about the future; and (d) to reduce the cost of measures designed to guard against the risk of untimely claims. (ii) Minimize Deterioration of Evidence. Another policy underlying statutes of limitation is the policy of avoiding deterioration of evidence. Like the policy of promoting repose, however, avoiding deterioration of evidence serves several distinct but overlapping purposes: (a) to ensure accuracy in fact finding; (b) to prevent the assertion of fraudulent claims; (c) to reduce the costs of litigation; and (d) to preserve the integrity of the legal system. (iii) Place Assessee and Revenue on an Equal Footing. One of the most powerful policies supporting limitation of actions is the concern that the passage of time will not only result in the deterioration of evidence, but that it will also allow the Assessee to gain an unfair advantage over the Revenue or reverse situation may happen. Many cases have recognized that one of the purposes of a limitation system is to avoid making it unreasonably difficult for defendants to answer the claims against them. (iv) Encourage the Prompt Enforcement of Substantive Law. Arguably, "the central purpose of law is to guide behavior." 19. Conclusion: At the cost of repetition, we state that assessment/reassessment framed/passed by the Assessing Officer is in violation of the provisions of the Act, that is, it is outside the time limit for completion of assessment u/s 153(1) of the Act, which was within 21 months. In the assesee`s case, the assessment was not framed/passed by the Assessing Officer within 21 months from the end of the assessment year in which the income was first assessable, that is, on 31.12.2019. The Assessing Officer has passed/framed assessment order u/s 143(3) of the Act on 30.09.2021, which is beyond the time-limit for completion of assessment u/s 153(1) of the Act. Therefore, assessment order framed by the Assessing Officer is in violation of the provisions of section 153(1) of the Act, which is bad in law, hence we quash the assessment order, dated 30.09.2021, framed by the Assessing Officer u/s 143(3) of the Act, being void ab initio. 20. In view of the reasons set out above, as also bearing in mind entirety of the case, we are of the considered view that assessment order framed by the Assessing Officer was not in accordance with law, therefore we have quashed the assessment order. As the assessment/ reassessment itself is quashed, all other issues on merits of the additions, in the impugned assessment proceedings, are rendered academic and infructuous. Page | 12 MA Nos. 50- 53/SRT/2023 21. We have adjudicated the technical/legal issue by taking the “lead” case in ITA No.351/SRT/2022 in the case of Antique Exim Pvt. Ltd. for A.Y 2017-18 and the same identical and similar facts are involved in other remaining appeals of different assessees, therefore, our instant adjudication shall apply mutatis mutandis to other appeals of assessees also.” 8. Based on the factual position cited above, Let us consult the provisions of section 254(2) of the Act, which reads as follows: “Orders of Appellate Tribunal. “254. (2) The Appellate Tribunal may, at any time within [six months from the end of the month in which the order was passed], 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. Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub-section unless the Appellate Tribunal has given notice to the 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, 1998, shall be accompanied by a fee of fifty rupees.]” 9. Having gone through sub-section 2 of section 254 of the Act, as noted above, we observed that “any mistake apparent from the record” can be rectified. The plain meaning of the word 'apparent' is that it must be something which appears to be ex-facie and incapable of argument and debate. Thus, section 254(2) of the Act does not cover any mistake which may be discovered by a complicated process of investigation, argument or proof. Therefore, amendment of an order under section 254(2) of the Act, does not mean entire obliteration of order originally passed by the Tribunal and its substitution by a new order of Tribunal, this is not permissible under section 254(2) of the Act. Power to rectify an order, under section 254(2) of the Act is extremely limited and it does not extend to correcting errors of law, or re-appreciating factual findings. Page | 13 MA Nos. 50- 53/SRT/2023 10. On the similar facts, the Co-ordinate Bench of ITAT, Delhi in the case of Prem Colonisers Pvt. Ltd. vs. ITO, Ward-14(3) [in MA No. 130/Del/2012 for AY.2002-03] order dated 12.12.2012 held as follows: “3. We have heard both the sides, considered the material on record and before reverting to facts, it would be apt to consider the relevant provisions of law relating to section 254(2). A bare look at section 254(2) of the Act, which deals with rectification, makes it amply clear that a ‘mistake apparent from the record’ is rectifiable. In order to attract the application of section 254(2), a mistake must exist and the same must be apparent from the record. The power to rectify the mistake, however, does not cover cases where a revision or review of the order is intended. ‘Mistake’ means to take or understand wrongly or inaccurately; to make an error in interpreting, it is an error; a fault, a misunderstanding, a misconception. ‘Apparent’ means visible; capable of being seen; easily seen; obvious; plain. A mistake which can be rectified under section 254(2) is one which is patent, which is obvious and whose discovery is not dependent on argument or elaboration. The language used in section 254(2) is permissible where it is brought to the notice of the Tribunal that there is any mistake apparent from the record. Accordingly, the amendment of an order does not mean obliteration of the order originally passed and its substitution by a new order which is not permissible under the provisions of section 254(2). Further, where an error is far from self evident, it ceases to be an apparent error. It is no doubt true that a mistake capable of being rectified under section 254(2) is not confined to clerical or arithmetical mistakes. On the other hand, it does not cover any mistake which may be discovered by a complicated process of investigation, argument or proof. As observed by the Supreme Court in Master Construction Co. (P.) Ltd. v. State of Orissa [1966] 17 STC 360, an error which is apparent on the face of the record should be one which is not an error which depends for its discovery on elaborate arguments on questions of fact or law. A similar view was also expressed in Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Tirumale AIR 1960 SC 137. It is to be noted that the language used in Order 47, Rule 1 of the Code of Civil Procedure, 1908 is different from the language used in section 254(2) of the Act. Power is given to various authorities to rectify any ‘mistake apparent from the record’ is undoubtedly not more than that of the High Court to entertain a writ petition on the basis of ‘an error apparent on the face of the record’. Mistake is an ordinary word, but in taxation laws, it has a special significance. It is not an arithmetical or clerical error alone that comes within its purview. It comprehends errors which, after a judicious probe into the record from which it is supposed to emanate, are discerned. The word ‘mistake’ is inherently indefinite in scope, as what may be a mistake for one may not be one for another. It is mostly subjective and the dividing line in border areas is thin and indiscernible. It is something which a duly and judiciously instructed mind can find out from the record. In order to attract the power to rectify under section 254(2) it is not sufficient if there is merely a mistake in the orders sought to be rectified. The mistake to be rectified must be one apparent from the record. A decision on the debatable point of law or undisputed question of fact is not a Page | 14 MA Nos. 50- 53/SRT/2023 mistake apparent from the record. The plain meaning of the word ‘apparent’ is that it must be something which appears to be so ex facie and it is incapable of argument or debate. It is therefore, follows that a decision on a debatable point of law or fact or failure to apply the law to a set of facts which remains to be investigated cannot be corrected by way of rectification. 4. As is apparent from the discussion held in the preceding paragraphs, that a rectification application can lie only with regard to an error on the face of the record which has not emerged from the material on record and moreover, the assessee has not been able to point out any apparent mistake in the order passed by the Tribunal and in case application of the assessee is accepted, it would tantamount to review of the order of the Tribunal, as has rightly been pleaded by the ld. DR, that reviewing of the order of the Tribunal is not permissible and for that purpose useful reference can be made to the following decisions. 4.1 The Hon’ble Calcutta High Court in the case of CIT vs Gokul Chand Agarwal (202 ITR 14), has held as under: “Section 254(2) of the Income Tax Act, 1961, empowers the Tribunal to amend its order passed under section 254(1) to rectify any mistake apparent from the record either suo moto or on an application. The jurisdiction of the Tribunal to amend its order thus depends on whether or not there is a mistake apparent from the record. If, in its order, there is no mistake which is patent and obvious on the basis of the record, the exercise of the jurisdiction by the Tribunal under section 254(2) will be illegal and improper. An oversight of a fact cannot constitute an apparent mistake rectifiable under section 254(2). This might, at the worst, lead to perversity of the order for which the remedy available to the assessee is not under section 254(2) but a reference proceeding under section 256. The normal rule is that the remedy by way of review is a creature of the statute and, unless clothed with such power by the statute, no authority can exercise the power. Review proceedings imply proceedings where a party, as of right, can apply for reconsideration of the matter, already decided upon, after a fresh hearing on the merits of the controversy between the parties. Such remedy is certainly not provided by the Income Tax Act, 1961, in respect of proceedings before the Tribunal.” 4.2 In similar situation, while dealing with the rectification, the Hon'ble Andhra Pradesh High Court in the case of CIT and Anor vs. I.T.A.T and Anor (206 ITR 126 has held as under: “The appellate Tribunal, being a creature of the statute, has to confine itself in the exercise of its jurisdiction to the enabling or empowering terms of the statute. It has no inherent power. Even otherwise, in cases where specific provision delineates the powers of the court or Tribunal, it cannot draw upon its assumed inherent jurisdiction and pass orders as it pleases. The power of rectification which is specifically conferred on the Tribunal has to be exercised in terms of that provision. It cannot be enlarged on any assumption that the Tribunal has got an inherent power Page | 15 MA Nos. 50- 53/SRT/2023 of rectification or review or revision. It is axiomatic that such power of review or revision has to be specifically conferred, it cannot be inferred. Unless there is a mistake apparent from the record in the sense of patent, obvious and clear error or mistake, the Tribunal cannot recall its previous order. If the error or mistake is one which could be established only by long drawn arguments or by a process of investigation and research, it is not a mistake apparent from the record.” 4.3 Further, the Hon'ble Supreme Court in the case of CIT vs Karam Chand Thapar and Br.P.Ltd. (176 ITR 535) has held as under: “APPELLATE TRIBUNAL – DUTY TO CONSIDER CUMULATIVE EFFECT OF CIRCUMSTANCES AND TOTALITY OF FACTS – NO NEED TO STATE SO IN APPELLATE ORDER SPECIFICALLY – INCOME TAX ACT, 1961, SEC. 254. Further it was held as under: “It is equally well settled that the decision of the Tribunal has not to be scrutinized sentence by sentence merely to find out whether all facts have been set out in detail by the Tribunal or whether some incidental fact which appears on the record has not been noticed by the Tribunal in its judgment. If the court, on a fair reading of the judgment of the Tribunal, finds that it has taken into account all relevant material and has not taken into account any irrelevant material in basing its conclusions, the decision of the Tribunal is not liable to be interfered with, unless, of course, the conclusions arrived at by the Tribunal are perverse. It is not necessary for the Tribunal to state in its judgement specifically or in express words that it has taken into account the cumulative effect of the circumstances or has considered the totality of the facts, as if that were a magic formula; if the judgment of the tribunal shows that it has, in fact, done so, there is no reason to interfere with the decision of the Tribunal. Similarly the Bombay High Court in the case of CIT-vs- Ramesh Electric and Trading Co. (203 ITR 497) .............It is an accepted position that the Appellate Tribunal does not have any power to review its own orders under the provisions of the Act. The only power which the Tribunal possesses is to rectify any mistake in its own order which is apparent from the record........ The power of rectification under section 254(2) can be exercised only when the mistake which is sought to be rectified is an obvious and patent mistake which is apparent from the record and not a mistake which required to be established by arguments and a long drawn process of reasoning on points on which there may conceivably be two opinion. Failure of the Tribunal to consider an argument advanced by either party for arriving at a conclusion is not an error apparent on the record, although it may be an error of judgments........................” 4.4 We also draw support here from Hon’ble Madras High Court decision in T.C.(A) No. 156 of 2006 dated 21.08.2007 in the case of CIT Vs. Tamil Nadu Small Industries Development Corporation Ltd. wherein the Hon’ble High Court held as under:- Page | 16 MA Nos. 50- 53/SRT/2023 “The Tribunal has no power to review its order. When the Tribunal has already decided an issue by applying its mind against the assessee, the same cannot be rectified under Section 254 (2) of the Act. There was no necessity whatsoever on the part of the Tribunal to review its own order. Even after the examination of the judgments of the Tribunal, we could not find a single reason in the whole order as to how the Tribunal is justified and for what reasons. There is no apparent error on the face of the record and thereby the Tribunal sat as an appellate authority over its own order. It is completely impermissible and the Tribunal has traveled out of its jurisdiction to allow a Miscellaneous Petition in the name of reviewing its own order. In the present case, in the guise of rectification, the Tribunal reviewed its earlier order and allowed the Miscellaneous Petition which is not in accordance with law. Section 254(2) of the Act does not contemplate rehearing of the appeal for a fresh disposal and doing so, would obliterate the distinction between the power to rectify mistakes and power to review the order made by the Tribunal. The scope and ambit of the application of Section 254(2) is limited and narrow. It is restricted to rectification of mistakes apparent from the record. Recalling the order obviously would mean passing of a fresh order. Recalling of the order is not permissible under Section 254(2) of the Act. Only glaring and any mistake apparent on the face of the record alone can be rectified and hence anything debatable cannot be a subject matter of rectification.” 4.5 Further, we place reliance upon Hon’ble Delhi High Court exposition on the scope of rectification u/s 254(2) as reported in the case of Ras Bihari Bansal Vs. Commissioner of Income Tax (2007) 293 ITR 365: “Section 254 of the Income Tax Act, 1961, enables the concerned authority to rectify any “mistake apparent from the record”. It is well settled that an oversight of a fact cannot constitute an apparent mistake rectifiable under this section. Similarly, failure of the Tribunal to consider an argument advanced by either party for arriving at a conclusion, is not an error apparent on the record, although it may be an error of judgment. The mere fact that the Tribunal had not allowed a deduction, even if the conclusion is wrong, will be no ground for moving an application under section 254(2) of the Act. Further, in the garb of an application for rectification, the assessee cannot be permitted to reopen and re-argue the whole matter, which is beyond the scope of the section.” Therefore, in view of the facts, circumstances, in the light of ratio of decisions cited and discussion as held above, we do not find any substance in the application of the assessee and dismiss the same being devoid of any merits. 5. As a result, this misc. application filed by the assessee gets dismissed.” 10. Thus, it is abundantly clear from the decision of the Coordinate Bench in the case of Prem Colonisers Pvt. Ltd(supra) that failure of the Page | 17 MA Nos. 50- 53/SRT/2023 Tribunal to consider an argument advanced by either party for arriving at a conclusion is not an error apparent on the record, although it may be an error of judgment. Review proceedings imply proceedings where a party, as of right, can apply for reconsideration of the matter, already decided upon, after a fresh hearing on the merits of the controversy between the parties, such remedy is certainly not provided by section 254(2) the Income Tax Act, 1961. Further, in the garb of an application for rectification, the Revenue cannot be permitted to reopen and re-argue the whole matter, which is beyond the scope of the section 254(2) of the Act. 11. The argument of the ld DR for the Revenue, to the effect that Income Tax Department got new documents/new evidences, which may be admitted in the miscellaneous application, to recall the order of the Tribunal, and to adjudicate the issue afresh, is not acceptable. In this regard, reliance can be placed on the Judgment of Coordinate Bench of ITAT Panaji in the case of Sesa Goa Ltd, 55 taxmann.com 28, wherein it was held that where material and information relied upon by Revenue had been procured subsequent to passing of order by Tribunal, there was no mistake rectifiable under section 254 (2) of the Act. We note that while adjudicating the issue, the Tribunal has considered the submission of Ld. Counsel for the assessee, which is narrated in para-12 of the Tribunal order. The Tribunal has also recorded the submission of Ld. DR for the Revenue which is mentioned in para 13 of the Tribunal order. Hence such detailed order of the Tribunal, on legal issue, cannot be rectified under section 254(2) of the Act. The Hon`ble Supreme Court in the case of Reliance Telecom Ltd, [2021] 133 taxmann.com 41 (SC) held that “where Tribunal had passed a detailed order originally during appellate proceedings holding that payment made by assessee-company for purchase of software was in nature Page | 18 MA Nos. 50- 53/SRT/2023 of royalty and TDS was to be deducted at rate of 10 per cent on such payment, said order could not be completely recalled by Tribunal in exercise of powers under section 254(2) as powers under section 254(2) were only to rectify/correct any mistake apparent from record”. Respectfully following the binding Judgment of Hon`ble Supreme Court in the case of Reliance Telecom Ltd, (supra), we dismiss the Miscellaneous Application filed by the Revenue. 12. Since we have adjudicated the issue by taking the lead case in the Miscellaneous Application No.50/SRT/2023, for assessment year 2012-13, in the case of M/s Saffron Gems Pvt. Ltd, as the facts and legal issue raised by the Revenue is similar and identical in other miscellaneous applications filed by the Revenue, therefore, our observations made in the Miscellaneous Application No.50/SRT/2023, shall apply mutatis mutandis to the aforesaid other Miscellaneous Applications of Revenue, namely, M.A. Nos.51,52,and 53/SRT/2023. 13. In the result, these four Miscellaneous Applications filed by the Revenue are dismissed. Registry is directed to place one copy of this order in all appeals folder / case file(s). Order is pronounced in the open court on 30/10/2023 by placing the result on the Notice Board as per Rule 34(5) of the Income Tax (Appellate Tribunal) Rule 1963. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER स ू रत /Surat Ǒदनांक/ Date: 30/10/2023 Dkp Outsourcing Sr.P.S. Page | 19 MA Nos. 50- 53/SRT/2023 Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // True Copy // Assistant Registrar/Sr. PS/PS ITAT, Surat
