The ITO, Ward-2(3)(7), Surat V. Shri Anshuman Ramdayaji Kumawat, Surat

MA 53/SRT/2022

AI Insights

The case involves the Income Tax Department (Revenue) filing a Miscellaneous Application against Anshuman Ramdayalji Kumawat, seeking to rectify a mistake apparent from the record in a previous Tribunal order. The application was filed 424 days late, and the Revenue sought condonation of this delay citing the impact of the COVID-19 pandemic. However, the Tribunal, referencing a decision from the Nagpur Bench and other precedents, concluded that it did not have the authority to condone the delay in filing the Miscellaneous Application as per section 254(2) of the Income Tax Act, 1961. Consequently, the application was dismissed without consideration of its merits.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 301719 (ITAT-SURAT)
• Duration Of Justice: 2 month(s) 26 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-02-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 02-02-2023
• Assessment Year: 2007-2008
• Appeal Filed On: 28-11-2022
• Other Referred Cases: Daryapur Sketkari Sahakari Ginning & Pressing Factory Ltd. vs ACIT, Collector, Land Acquisition vs. MST.Katiji & Ors.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Retrospective amendment; Competent authority; Condonation of delay
• Section: 260A; 144C; 264; 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM Miscellaneous Application No.53/SRT/2022 [Arising out of ITA No.1974/AHD/2016] Assessment Year: (2007-08) (Physical Court Hearing) The ITO, Ward-2(3)(6), Surat. Vs. Anshuman Ramdayalji Kumawat, Room No.405, 4 th Floor, Anavil Business Centre, Adajan, Surat – 395009. (Appellant)/(Revenue) (Respondent)/(Assessee) èथायीलेखासं./जीआइआरसं./PAN/GIR No.: ARHPK4543J Assessee by Shri Rohit Vijayvargiya, CA Respondent by Shri Vinod Kumar, Sr.DR Date of Hearing 03/02/2023 Date of Pronouncement 23/02/2023 आदेश / O R D E R PER DR. A. L. SAINI, AM: By way of captioned application, 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 23.03.2021 (vide ITA No.1974/AHD/2016). 2. At the outset, we note that Miscellaneous Application filed by the Revenue is barred by limitation by four hundred twenty four (424) days. 3. The Ld. Departmental Representative (Ld. DR) for the Revenue submitted a petition for condonation of delay. The Ld. DR contended that delay in filling Miscellaneous Application is covered by the judgment of the Hon'ble Supreme Court in Miscellaneous Application No. 21 of 2022 in Suo Moto Writ Petition No.03 of 2020, dated 01.10.2022. Therefore, Ld. DR contended that period from 15.03.2020 to 28.02.2022 should be excluded in computing delay. Thus, effective delay in filling appeal may be for three months (approx.). Page | 2 MA.53/SRT/2022/AY.2007-08 Anshuman Ramdayalji Kumawat Therefore, Ld. DR for the Revenue submitted that most of the delay is attributable to Covid 19 disease and hence it should be condoned. 4. However, the Ld. Counsel submitted that such huge delay should not be condoned and the entire delay is not attributable to Covid 19 pandemic period. The Miscellaneous Application was filed by Revenue before the ITAT on 29.11.2022. The Ld. Counsel submitted that in assessee’s case under consideration, the Tribunal has passed the order dated 23.03.2021 and six months of this order expires on 23.09.2021. From 23.09.2021 to 28.02.2022 was period of Covid 19 disease, wherein the Supreme Court in MA No. 21 of 2022 exempted the delay. After 28.02.2022 to 28.08.2022 is the six months period, within which the Miscellaneous Application should have been filed by Revenue. However, Revenue filed the Miscellaneous Application as on 29.11.2022, therefore, the effective delay is 90 days (approx.). The appeal was filed on 29.11.2022, therefore, we note that this appeal has been filed by the Revenue is barred by 90 days. Therefore, Ld. Counsel stated that there is no provision in section 254(2) of the Act to condone the delay in case of miscellaneous application and for that Ld. Counsel relied on the judgment of the Coordinate Bench of Nagpur in the case of Daryapur Sketkari Sahakari Ginnning & Pressing Factory Ltd. vs ACIT, in ITA No. (ITAT Nagpur), in MA No. 12 to 141/Nag/2020, dated 20.03.2020, wherein it was held as follows: “8. Therefore, the attitude of assessee is always to avoid the authorities and more so, the assessee is not vigilant about his own cause. Thereafter, the assessee comes up with certain reasons for late filing of MAs but all these reasons are not supported by any evidence and the assessee was simply sleeping over the order of Tribunal for more than 2 years. That further, the judgment of the Hon'ble Supreme Court which is strongly relied on by the assessee i.e. Collector, Land Acquisition vs. MST.Katiji & Ors. (supra) is substantially distinguishable on facts with that of the case of assessee. In the case before the Hon'ble Supreme Court, it is with regard to compensation in respect of acquisition of land for public purpose and there was delay of only 4 days. Per contra, in the present case of the assessee, it is with regard to MAs admission in spite of delay of 2 years 11 months and whether the Tribunal has got power to condone the said delay u/s 254(2) of the Act. We agree with the submissions of ld. DR highlighting provision of clause (5) of section 253 of the Act, wherein it is specific that in case of appeal or cross-objection, the Tribunal has power to condone the delay, if there is sufficient reasons provided before it, but on the other hand, in case of MAs u/s 254(2) of the Act, no such specific power has Page | 3 MA.53/SRT/2022/AY.2007-08 Anshuman Ramdayalji Kumawat been provided to the Tribunal. Even at the time of hearing, ld. Counsel could not produce any order of the Hon'ble High Court or Hon'ble Apex Court where the delay u/s 254(2) of the Act has been condoned. We also find in the decision of Pune Tribunal in the case of TDK Electronics AG Vs. ACIT in ITA No.1810/PUN/2019 for A.Y. 2015-16, order dated 26.02.2020, wherein it has been held that power to condone the delay with the Tribunal can only be exercised if it is specifically provided in the Statute itself. As we have already examined so far as Income-tax Act is concerned and in respect of Tribunal it is with regard to appeals and cross- objections only, such power is given if the Tribunal is satisfied about the sufficiency of reasons about such delay as enshrined in clause (5) of section 253 of the Act. But so far as section 254(2) of the Act is concerned, there is no express power conferred on the Tribunal by the Legislature in the Statute where the Tribunal can condone the delay beyond the relevant period prescribed in the Statute therein. This view is fortified in the decision of Pune Bench Tribunal and the operative para is extracted as under:- "3. We have heard the rival submissions and gone through the relevant material on record. Section 144C of the Act with the marginal note 'Reference to dispute resolution panel' provides through sub-section (1) that the AO, in the first instance, shall forward a draft of the proposed order of the assessment to the eligible assessee if he proposes to make any variation in the income returned. Sub-section (2) of section 144C states that: 'On receipt of the draft order, the eligible assessee shall, within thirty days of the receipt by him of the draft order, - (a) . . . . . . (b) file his objections, if any, to such variation with, -(i) the Dispute Resolution Panel; and (ii) the Assessing Officer'. The Income-tax (Dispute Resolution Panel) Rules, 2009 lay down the procedure for filing objections through Rule 4. Sub-rule (1) provides that 'the objections, if any, of the eligible assessee to the draft order may be filed in person or through his agent within the specified period in Form 35A'. These rules do not spell out any meaning of the term `specified period' for filing of Form 35A and as such, the term takes its genesis from section 144C(2) of the Act. Ergo, it becomes overt that an assessee, on receipt of the draft order, is obliged to file objections, if any, to the variation in the income before the DRP/AO within 30 days of the receipt of the draft order. 4. Before proceeding further, let us have a quick look at the following relevant dates of the case under consideration, which are material for our decision:- Date of the Draft order 21.12.2018 Date on which Draft order was received by assessee 24.12.2018 Date on which objections filed before DRP 24.01.2019 Date of the DRP direction 27.09.2019 Date of the final assessment order u/s 144C(13) 24.10.2019 5. As the draft order in this case was admittedly received by the assessee on 24.12.2018, the period of 30 days for filing Form No. 35A, in terms of sub- section (2) of section 144C, expired on 23.01.2019. As against this, the assessee actually filed Form No.35A on 24.01.2019, thereby causing a delay of one day Page | 4 MA.53/SRT/2022/AY.2007-08 Anshuman Ramdayalji Kumawat in raising objections against the draft order. The DRP has canvassed a view that it has no power to condone the delay in as much as such power is absent in section 144C or Income-tax (DRP) Rules, 2009. The DRP fortified its view in dismissing the objections filed by the assessee in limine by mainly relying on the judgment of Hon'ble Bombay High court in CIT Vs. Grasim Industries Ltd. (2009) 319 ITR 154 (Bom) in which the Hon'ble High Court has held that it has no power to condone the delay in filing appeal u/s. 260A of the Income-tax Act. Under these circumstances, the moot question is whether the DRP was justified in not condoning the delay of one day and consequently dismissing the objections raised by the assessee at the entry level without delving into their merits. 6. It is trite that filing of an appeal or an application under any Act is a right provided by the concerned statute. This right carries certain obligations including adhering to the time limit prescribed in the statute for filing of such an appeal or application. In the context of the Income-tax Act, 1961, an appeal can be filed before the CIT(A) within 30 days as prescribed u/s. 249(2) of the Act. In the same manner, an appeal can be filed before the Tribunal within 60 days as prescribed u/s. 253(3) of the Act and before the Hon'ble High Court within 120 days as per section 260A(2) of the Act. Apart from the appeals, an application u/s. 264 for revision can be filed by the assessee within one year as per section 264(3) of the Act. In the same manner, certain other time limits have also been outlined in the Act for moving applications etc. One of such instances is section 144C(2), which obligates an assessee to file objections against the draft order before the DRP within 30 days. 7. Sometimes the relevant statute carves out exceptions by granting the competent authority/forum a power to entertain an appeal or application beyond the prescribed period on sufficient cause. It is in the hue of such an express authorization that the concerned authority/forum can exercise its discretion and condone the delay, if satisfied with the reasonableness of the cause in late presentation. Although section 249(2) of the Act requires the filing of an appeal before the CIT(A) within 30 days, sub-section (3) empowers the CIT(A) to admit an appeal after the expiry of the said period if he is satisfied that the appellant had sufficient cause for not presenting the appeal within the period. 8. Similarly albeit section 253(3) requires the filing of an appeal before the Tribunal within sixty days, sub-section (5) empowers the Tribunal to admit an appeal after the expiry of the period of sixty days. As against the power of the Tribunal to admit an appeal belatedly after the expiry of relevant period in terms of sub-section (5) of section 253A, no specific provision has been enshrined empowering the Tribunal to entertain a Miscellaneous Application u/s. 254(2) of the Act beyond the period of six months from the end of the month in which the order was passed. 9. Prior to the insertion of sub-section (2A) of section 260A by the Finance Act, 2010 with retrospective effect from 01-10.1998, no specific provision was there in the Act empowering a High Court to admit an appeal after the expiry of period of 120 days as referred to in sub- section (2) of section 260A. In the period pre-insertion of sub-section (2A), there was a cleavage of opinion as to Page | 5 MA.53/SRT/2022/AY.2007-08 Anshuman Ramdayalji Kumawat whether a High Court can condone the delay beyond the period prescribed in sub-section (2) of section 260A. The full Bench of Hon'ble Bombay High Court in CIT Vs. Velingkar Brothers (2007) 289 ITR 382 (Bom.) (FB) observed that sub-section (2) of section 260A does not make section 29(2) of the Limitation Act, 1963 inapplicable and accordingly held that the power to condone delay in filing appeal must be read to be existent. Thereafter, the Hon'ble Supreme Court had an occasion to consider this issue in the context of Excise Act in Commissioner of Central Excise and Customs Vs. Hongo India (P) Ld. and Another (2009) 223 CTR 225 (SC) in which it held that a High Court has no power to condone the delay in filing reference applications beyond the prescribed period. Similar issue once again came up for consideration before the Hon'ble Bombay High Court in CIT Vs. Grasim Industries Ltd. (2009) 319 ITR 154 (Bom.) in which the Revenue sought condonation of delay by relying on the earlier Full Bench judgment of the Hon'ble Bombay High Court in Velangkar Brothers (supra). Considering the later judgment of the Hon'ble Supreme Court in Hongo India (P) Ld. and Another (supra), the Hon'ble Bombay High court held that the earlier view of the Full Bench in Velingkar Brothers (supra) was not a good law in view of the later judgment of the Hon'ble Supreme Court. It is this judgment of the Hon'ble Bombay High Court in Grasim Industries Ltd. (supra) which has been chiefly relied by the DRP in not condoning the delay. It is the Finance Act, 2010 which has retrospectively inserted sub-section (2A) to section 260A permitting the filing of appeal belatedly on showing sufficient cause. Now with the aid of sub-section (2A) of section 260A, a High Court has also been empowered to entertain an appeal filed beyond the period prescribed in section 260A(2) of the Act in case sufficient cause for the delay is established. 10. In the same manner, although sub-section (3) of section 264 empowers an assessee to file revision petition within one year, proviso to sub-section (3) enables the Pr. CIT to accept a revision application u/s. 264 beyond the prescribed period if he is satisfied that the assessee was prevented by sufficient cause from making an application within that period. 11. It follows from the above discussion that whenever the parliament intended to empower the competent authority/forum to condone the delay and accept an appeal or an application beyond the stipulated time, it expressly stated so by inserting a specific provision in the Act. In the absence of such an enabling provision, no competent authority/forum can usurp the statutory power and bestow upon itself the power to condone the delay. The fortiori is that any application moved after the prescribed period, in the absence of an express provision in this regard, is liable to be dismissed as time barred. 12. Section 144C(2) of the Act provides a period of 30 days for filing of objections before the DRP. Unlike certain other provisions empowering the respective competent authorities/forums to condone the delay, no empowerment has been endowed upon the DRP to condone the delay and accept Form No. 35A beyond the prescribed period of 30 days. Sub-section (2) of section 144C not only uses the word 'shall' requiring the assessee to file objections before the DRP within 30 days but also does not contain any provision authorizing the DRP to condone the delay. In the absence of such an express Page | 6 MA.53/SRT/2022/AY.2007-08 Anshuman Ramdayalji Kumawat power to condone the delay, in our considered opinion the DRP rightly held itself to be incompetent to condone the delay. 13. One needs to appreciate that either the power to condone the delay exists or does not exist. It cannot be a hybrid situation in the sense of conferring a bridled power of condoning the delay in favour of the competent authority/forum so that the delay may be condoned if it is up to a specific length of time. We have noted above that sub-section (2) obligates an assessee to file objections against the draft order in Form No. 35A within a period of thirty days. Sub- section (12) of section 144C places an embargo of limitation on the DRP not to issue any direction u/s. 144C(5) after nine months from the end of the month in which the draft order is forwarded to the eligible assessee. If we accept the contention of the assessee that the DRP was empowered to condone the delay of one day in filing objections and countenance the same, there may be a case in which such a delay is for one year instead of one day and such a delay may also be on a sufficient cause. The logic is that if delay of one day can be condoned on sufficient cause then there can be no reason for not condoning the delay of one year equally on sufficient cause. If such a hypothetical delay of one year is allowed to be condoned, the DRP will run out of time to issue direction under sub-section (5) within a period of nine months from the end of the month in which the draft order is forwarded to the eligible assessee in terms of section 144C(12) of the Act. It is in view of such inter-weaving of the time limits that the legislature did not confer any power on the DRP to condone the delay in accepting the objections from the assessee beyond the prescribed period. The sequitur is that in the absence of any express provision, non- condonation of delay by the DRP in the facts of the extant case has to be held as perfectly justified. We, ergo, approve the action of the DRP in this regard." 9. That further, in the case of Collector, Land Acquisition vs. MST.Katiji & Ors. (supra), relied strongly by the assessee, the Hon'ble Apex Court has referred to sufficient cause for the purpose of condonation of delay. This sufficient cause needs to be established by the assessee through evidences and in this case, the assessee has failed to do so. In view of the above examination of facts and law, we are of the considered opinion that this inordinate delay in filing of MAs is not a fit case for condonation, more so, because there is no specific provision in the realm of section 254(2) of the Act to provide for such condonation of delay in case of MAs. Therefore, all the condonation of delay petitions are dismissed. Since at the threshold itself the condonation of delay petitions are dismissed, MAs become academic and therefore, they are also dismissed. 10. In the result, all the condonation of delay petitions and MAs are dismissed.” 5. Based on these facts and circumstances, the ld Counsel contended that delay in filing the appeal should not be condoned. 6. We have heard both the parties and perused the material available on record. We note that the Tribunal has got power to rectify the mistake under section 254(2) of the Act. We note that as per sub- section 5 of section 253 of the Page | 7 MA.53/SRT/2022/AY.2007-08 Anshuman Ramdayalji Kumawat Income Tax Act, the Tribunal may condone the delay in case of an appeal or in case of memorandum of cross objection. However, we note that sub- section 5 of section 253 does not speak about the condonation of delay in case of Miscellaneous Application. Therefore, we note that Miscellaneous Application filed by the Revenue under section 254(2) of the Act, is not eligible for condonation of delay. No such specific power to condone the delay in case of miscellaneous application, has been provided to the Tribunal by the Income tax Act. The Sub- section 2 of section 254 of the Act is reproduced below for ready reference as follows: “(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.” 7. We note that sub- section 5 of section 253 of the Income Tax Act provides as follows: “(5) The Appellate Tribunal may admit an appeal or permit the filing of a memorandum of cross-objections after the expiry of the relevant period referred to in sub-section (3) or sub-section (4), if it is satisfied that there was sufficient cause for not presenting it within that period.” 8. Having gone through the provision of sub- section 5 of section 253 of the Act, we observed that Tribunal does not have power to condone the delay in respect of the Miscellaneous Application filed by the Revenue/Assessee. Therefore, we note that after excluding the period of delay which was condoned by the Hon'ble Supreme Court in its suo motu Writ Petition No.21 of 2022 dated 01.10.2022, there is effective delay of 90 days, in filling the Miscellaneous Application by the Revenue. Hence, the Miscellaneous Application filed by the Revenue is barred by limitation by 90 days, which can not be condoned. Therefore, respectfully following the judgment of the Co-ordinate Bench of ITAT, Nagpur in the case of Daryapur Sketkari Sahakari Ginning & Pressing Factory Ltd. (supra), we dismiss the Miscellaneous Application filed by the Revenue. Page | 8 MA.53/SRT/2022/AY.2007-08 Anshuman Ramdayalji Kumawat 9. Since, we have not condoned the delay in filling the Miscellaneous Application of the Revenue, therefore, we do not adjudicate the said Miscellaneous Application on merit. 10. In the result, Miscellaneous Application filed by the Revenue is dismissed. Order is pronounced in the open court on 23/02/2023 by placing the result on the Notice Board. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER lwjr /Surat Ǒदनांक/ Date: 23/02/2023 SAMANTA 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