DCIT CORPORATE CIRCLE 6(1), CHENNAI V. SHRIRAM PROPERTIES PVT LTD., CHENNAI

MA 55/CHNY/2023

AI Insights

The case involves a Miscellaneous Application (MA No.55/Chny/2023) filed by the Revenue seeking recall of a previous Tribunal order (MA No.39/Chny/2020) dated 26.08.2022, which was passed under section 254(2) of the Income Tax Act. The Revenue argued that they were unable to furnish necessary documents at the time of the original order but had them available now. The Tribunal, referencing decisions from the Delhi Tribunal Special Bench and other judicial precedents, concluded that it could not rectify or recall an order passed under section 254(2) as this section does not provide for such actions. The Tribunal emphasized that rectification under section 254(2) is only applicable to mistakes in orders passed under section 254(1).

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135261 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 11-05-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 11-05-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 09-02-2023
• Other Referred Cases: Shri Padam Prakash (HUF) vs. ITO (131 ITD 121), CIT v. President, ITAT [1992] 196 ITR 838/ 63 Taxman 338 (Ori.), Mentha & Allied Products Co. (P.) Ltd. v. ITAT [2000] 244 ITR 470/[2001] 116 Taxman 180 (Delhi), CIT v. Kabir Das Investment Ltd. [1995] 124 CTR (Delhi) 259 : (1994) 210 ITR 898 (Delhi) : TC 55R.777, CIT v. Aiswarya Trading Co. [2010] 192 Taxman 385 (Ker.), Dr. S. Panneerselvam v. Asstt. CIT [2009] 319 ITR 135 (Mad.), Asstt. CIT v. Saurashtra Kutch Stock Exchange Ltd. [2008] 305 ITR 227/ 173 Taxman 322
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 192; 254(2)

Judgement Text

आयकर अपीलीय अिधकरण, ‘सी’’’’ यायपीठ, चे ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI ी महावीर सह, उपा य एवं ी मनोज कुमार अ वाल, लेखा सद य के सम BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENTAND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER M.A No.55/Chny/2023 (Arising out of M.A No.39/Chny/2020 in ITA No.1429/Chny/2019) िनधा रण वष /Assessment Year: 2010-11 The Jt. Commissioner Income Tax (OSD) Central Circle 1(4) 3rd Floor, R.No.323, New No.46 MG Road, Nungambakkam Chennai – 600 034 Vs. M/s. Shriram Properties Ltd., No.31, 2nd Main Road Shriram House T.Chowdaiah Road, sadasivanagar Bengaluru – 560 080 [PAN: AAFCS-5801-D] (अपीलाथ /Appellant) ( यथ /Respondent) अपीलाथ की ओर से/ Assessee by : Shri Anandhan (CA)-Ld. AR थ की ओर से /Revenue by : Shri AR V Sreenivasan, Addl. JCIT सुनवाई क तारीख/Date of Hearing : 12.05.2023 घोषणा क तारीख /Date of Pronouncement : 12.05.2023 आदेश / O R D E R Per Mahavir Singh, Vice President : By way of this Miscellaneous Application, the Revenue seek interference in Tribunal order passed in MA No.39/Chny/2020 vide order dated 26.08.2022. This order has been passed u/s 254(2) of the Act. 2. In the captioned application, the revenue seeks recall of the MA order on the ground that requisite documents viz. accepted audit MA No.55/Chny/2023 :- 2 -: objection could not be furnished on 26.08.2022 but the same is available now. 3. It is discernible that revenue is seeking interference in MA order passed u/s 254(2). The order passed u/s 254(2) cannot be rectified any further since law postulates rectification only of order passed u/s 254(1). This interpretation is duly supported by the decision of Delhi Tribunal Special Bench in the case of Shri Padam Prakash (HUF) vs. ITO (131 ITD 121) which 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 under section 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 v. President, ITAT [1992] 196 ITR 838/ 63 Taxman 338 (Ori.) 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 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 under section 253. Therefore, the order which can be rectified must be one which has been passed by the Tribunal in an appeal filed under section 253. An order rejecting an application for rectification under section 254(2) cannot be rectified under section 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. (ii) In the case of Mentha & Allied Products Co. (P.) Ltd. v. ITAT [2000] 244 ITR 470/[2001] 116 Taxman 180 (Delhi), after referring to the provisions of section 254(1) and (2), it was held as under:- "7. The relevant provisions of section 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-section (1) and shall MA No.55/Chny/2023 :- 3 -: make such amendment if the mistake is brought to its notice by the assessee or the Assessing Officer;....." 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-section (1). Admittedly, by the impugned order, the Tribunal has sought to rectify the order passed by it under section 256(1) of the Act and not an order passed under section 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 section 256(1) of the Act by taking recourse to section 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 v. Kabir Das Investment Ltd. [1995] 124 CTR (Delhi) 259 : (1994) 210 ITR 898 (Delhi) : TC 55R.777." 10. In the case of CIT v. Aiswarya Trading Co. [2010] 192 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 v. Asstt. CIT [2009] 319 ITR 135 (Mad.), 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 under section 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. 13. Moreover, what has been done by the Tribunal by the order dated 27-11-2009 is that by keeping in view the latest decision of Hon'ble Supreme Court, it was observed that the observations made by it in earlier order dated 26-9-2008 are not more relevant and therefore, those observations have been withdrawn. According to the well established law, the order of the Tribunal has to brought in conformity with the decision of the Apex Court, even if the said decision is rendered subsequently to the pronouncement of the order and reference in this regard can be made to the decision of Hon'ble Supreme Court in the case of Asstt. CIT v. Saurashtra Kutch Stock Exchange Ltd. [2008] 305 ITR 227/ 173 Taxman 322. 14. So far as it relates to the contention of the assessee that indisposition of the counsel constitute reasonable cause for non-appearance on the fixed date of hearing, we may observe that in para 5 of the order dated 27-11- 2009, it has been recorded by the Tribunal that there is no cooperation from the assessee's side who has also sought an adjournment. Therefore, this MA No.55/Chny/2023 :- 4 -: ground cannot constitute any cause to recall of the said order as what was done in that order was to bring the earlier order in conformity with the decision of the Hon'ble Apex Court rendered subsequently. 15. In view of the above discussion, we find no force in the miscellaneous application filed by the assessee which is rejected and dismissed. Considering the same, we decline to interfere in the order passed u/s 254(2). 4. In the result, Miscellaneous Application of the Revenue is dismissed as not maintainable. Order pronounced in the Open Court on 12th May, 2023. Sd/- Sd/- (मनोजमनोजमनोजमनोज कुमारकुमारकुमारकुमार अ वालअ वालअ वालअ वाल) (Manoj Kumar Aggarwal) लेखालेखालेखालेखा सद यसद यसद यसद य /Accountant Member (महावीर िसंह) (Mahavir Singh) उपा / Vice President चे ई/Chennai, दनांक/Dated: 12th May, 2023. EDN/- आदेश क ितिलिप अ ेिषत/Copy to: 1. अपीलाथ /Appellant 2. यथ /Respondent 3. आयकर आयु /CIT 4. िवभागीय ितिनिध/DR 5. गाड फाईल/GF