Asst. Commissioner of Income Tax, Circle-4(1), Hyderabad V. K Pratap Reddy (HUF), Hyderabad

MA 58/Hyd/2018

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 7067 (ITAT-HYDERABAD)
• Duration Of Justice: 1 month(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 13-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEV BENJWAL
• Keywords: Period of limitation; Time period of passing order; Condonation of delay
• Section: 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A BENCH: HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER M.A. NO. 58/HYD/2018 ( ARISING OUT OF ITA. NO.1353/HYD/2014 ) (A.Y: 2006 - 07) M.A. NO. 59/HYD/2018 ( ARISING OUT OF ITA. NO. 641/HYD/2014 ) (A.Y: 2006 - 07) ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 4(1), HYDERABAD. VS. SRI. K. PRATAP REDDY (HUF), 2 - 2 - 25/P/5/1, D.D. COLONY, BAGH AMBERPET, HYDERABAD. PAN: AAEHP 5655 G (APPELLANT) (RESPONDENT) FOR ASSESSEE: SHRI A. SRINIVAS FOR REVENUE : SHRI RAJEEV BENJWAL, DR DATE OF HEARING : 27.07.2018 DATE OF PRONOUNCEMENT : 1 0 .0 8 .2018 ORDER PER SMT. P. MADHAVI DEVI, JM . THESE MISCELLANEOUS APPLICATIONS ARE FILED BY THE REVENUE SEEKING RECTIFICATION OF THE ALLEGED MISTAKES IN THE ORDER OF THE TRIBUNAL DATED 30.11.2017. 2. THE CAPTIONED TWO MISCELLANEOUS APPLICATIONS IE., 58 & 59/HYD/2018 WERE FILED ON 13.06.2018 AND 19.06.2018 RESPECTIVELY, WHICH ARE CLEARLY BEYOND THE DUE DATE AS PRESCRIBED U/S 254(2) OF THE ACT. THE REGISTRY HAS POINTED OUT THE ABOVE DEFECT MENTIONING THAT THESE MAS ARE FILED BEYOND THE PERIOD PRESCRIBED U/S 254(2) OF THE I.T. ACT, 1961 AND THEREFORE , TH EY ARE NOT MAINTAINABLE . LEARNED DEPARTMENTAL REPRESENTA TIVE SUBMITTED THAT THE REVENUE WOULD LIKE TO GET THE INSTRUCTIONS FROM THE A.O FOR FILING OF A PETITION FOR CONDONATION OF DELAY . HOWEVER, IN THE CASE OF T. BABU REDDY, THE COORDINATE BENCH 2 OF THE TRIBUNAL, WHEREIN BOTH OF US ARE THE SIGNATORIES , HAVE HE LD THAT THE DELAY IN FILING THE MISCELLANEOUS APPLICATION CANNOT BE CONDONED. THE RELEVANT PARAS OF THE ORDER AS UNDER: - 2. WE FIND THAT U/S 254(2), THE TIME PRESCRIBED TO FILE AN APPLICATION IS ONLY SIX MONTHS FROM THE END OF THE MONTH IN WHICH ORDER WA S PASSED. SINCE IN THE CASE BEFORE US, THE APPLICATION IS FILED BEYOND THE PRESCRIBED PERIOD AND THE TRIBUNAL DOES NOT HAVE THE POWER TO CONDONE THE DELAY, (THOUGH THE REVENUE HAS NOT FILED THE SAID APPLICATION), THE APPLICATION OF THE REVENUE IS LIABLE TO BE DISMISSED. 3. FURTHER, IN THE CASE OF GAYATRI INFRA VENTURES LTD IN M.A. NO.55/HYD/2018, THE COORDINATE BENCH (TO WHICH BOTH OF US ARE SIGNATORIES) HAS HELD AS UNDER: 5. WE FIND THAT W.E.F 1.6.2016, THE STATUTE HAS PROVIDED ONLY A PERIOD OF SIX MONT HS 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 P ETROLEUM 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 FO R 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 RECTIF ICATION 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 REA D 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 3 ORDER DATED 5 SEPTEMBER 2001 ALLOWED THE APPLICATION AND HELD THAT THERE WAS MIST AKE 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 I TS 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 RECTIFICATI ON 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 REC TIFICATION APPLICATION BEING MADE BY ONE OF 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 P RESENT 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 MERI TS 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 CIRCUM STANCES, 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 LATEN T 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 ES TABLISH 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 A LSO THE ORDER CAN EFFECTIVELY BE RESISTED IN LAW ONLY BY OBTAINING A DECISION OF COURT.' FURTHER THE SUPREME COURT IN SNEH GUPTA V/S. DEV SARUP (2009) 6 SCC 194 HAS OBSERVED '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.' 4 THEREFORE, IN THIS CAS E 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 APPLICAT ION 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 RESPONSE TO QUERY (B) ABOVE. 20) IN VIEW OF THE REASONS GIVEN HEREIN ABOVE, WE FIND THE TRIBUNAL WAS CORR ECT 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. THIS DECISION W AS FOLLOWED BY THE COORDINATE BENCH OF THE TRIBUNAL AT JAIPUR IN THE CASE OF VINOD SINGH, JAIPUR VS. ITO, JAIPUR DATED 6.2.2018 IN MA NO.12/JP/2018 IN ITA NO.454/JP/2015, WHEREIN UNDER SIMILAR CIRCUMSTANCES AS IN THE CASE BEFORE US, THE M.A FILED BEYOND T HE LIMITATION PERIOD OF SIX MONTHS WAS DISMISSED. IN VIEW OF THE SAME, WE ARE CONSTRAINED TO DISMISS THE MISCELLANEOUS APPLICATION AS BARRED BY LIMITATION. 3. RESPECTFULLY, FOLLOWING THE DECISION OF THE COORDINATE BENCH, THE MAS FILED BY THE REVENUE ARE D ISMISSED AS NON - MAINTAINABLE. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH AUGUST , 2018 SD/ - SD/ - ( S. RIFAUR RAHMAN) ( SMT. P. MADHAVI DEVI ) ACOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 10 TH AUGUST , 2018. OKK, SR.PS 5 COPY TO 1. SHRI K. PRATAP REDDY (HUF), 2 - 2 - 25P/5/1, D.D. COLONY, BAGH AMBERPET, HYDERABAD. 2. ACIT, CENTRAL CIRCLE - 4( 1 ) , HYDERABAD. 3. CIT(A) - V , HYDERABAD. 4. PR. CIT - V , HYDERABAD. 5. DR, ITAT, HYDERABAD. 6. GUARD FILE