ACIT CORPORATE CIRCLE 2, COIMBATORE V. KPR MILLS LTD., COIMBATORE

MA 63/CHNY/2020

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 3723 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 3 month(s) 26 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 29-06-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 04-03-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Tax effect; Period of limitation; Time period of passing order
• Section: 260A; 254(2)

Judgement Text

आयकर अपीलीय अिधकरण ‘सी’ ायपीठ चे ई म । IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI माननीय ी महावीर िसंह, उपा ! एवं माननीय ी मनोज कु मार अ&वाल ,लेखा सद) के सम!। BEFORE HON’BLE SHRI MAHAVIR SINGH, VICE PRESIDENT AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM M.A No.63/Chny/2020 (Arising out of ITA No.1203/Chny/2019) (िनधा@रण वष@ / Assessment Year: 2006-07) DCIT Corporate Circle-2, Coimbatore. बनाम / V s. M/s. K.P.R. Mills Ltd. No.9, Gokul Building, AKS Nagar, Thadagam Road, Coimbatore-641 002. थायी लेखा सं. /जीआइ आर सं. /P A N/ G I R No . AACC K- 0 8 9 3 - N (अपीलाथ /Appellant) : ( थ / Respondent) अपीलाथ की ओरसे/ Assessee by : Shri S. Sridhar (Advocate) – Ld. A.R थ की ओरसे/Revenue by : Shri P. Sajit Kumar (JCIT) – Ld. D.R सुनवाई की तारीख/Date of Hearing : 27.05.2022 घोषणा की तारीख /Date of Pronouncement : 30.06.2022 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member): 1. By way of this Miscellaneous Petition, the Revenue seeks recall of Tribunal order in ITA No.1203/Chny/2019 passed in bunch of appeals on 22.08.2019. This bunch of revenue’s appeals was dismissed by the bench on account of low tax effect in terms of CBDT Circular No. 03/2018. In the application, it has been submitted that the tax effect involved is much more than stipulated monetary limit of Rs.50 Lacs and accordingly, revenue plead for recall of order for adjudication on merits. M.P No.63/Chny/2020 2 2. The registry has noted a delay of 5 days in the appeal by. The Ld. AR, drawing attention to the statutory provisions of Sec. 254(2), submitted that the application was to be preferred within six months from the end of the month in which the order was passed. The Ld. AR submitted that the period of four years as stipulated earlier has been substituted with a period of six months w.e.f. 01.06.2016 and the order under consideration has been passed after 01.06.2016. In the said background, Ld. AR referred to various judicial pronouncements and pleaded for dismissal of the appeal on limitation. The Ld. DR, on the other hand, maintained that the limitation period was to be counted from the date of receipt of the order by the revenue. The Ld. DR submitted that the order was served in the office of concerned Principal Commissioner of Income Tax only on 18.10.2019 and as counted from the end of this month, the application has been preferred within limitation period which would be 30.04.2020 whereas the application has been preferred by the revenue on 05.03.2020. 3. After careful consideration, we find that order under consideration has been passed by Tribunal on 22.08.2019 and it is undisputed fact that the same has been served on the revenue only on 18.10.2019. Going by the literal interpretation of provisions of Sec. 254(2), the application has to be preferred within a period of six months from the end of the month in which the order was passed. Counted in this manner, the limitation period for preferring application is 29.02.2020. On the other hand, as counted from the date of receipt of order, the application could be preferred by revenue up-to 30.04.2020. The application has actually been preferred on 05.03.2020 and accordingly as per literal M.P No.63/Chny/2020 3 interpretation, the application is time barred whereas as counted from date of receipt of order, the application would fall within limitation period. 4. We find that this controversy has been resolved by Hon’ble Calcutta High Court in its decision titled as Anil Kumar Nevatia V/s ITO (125 Taxmann.com 169; 23.12.2020) wherein Hon’ble Court has accepted later view that the limitation period was to be counted with reference to receipt of order by the applicant. The relevant observations as well as adjudication of Hon’ble Court were as under: - 5. The assessee impugnes the said order of the Tribunal suggesting that the date of order is not relevant for the purpose of computing the period of limitation under section 254 of the Income-tax Act, 1961, and it should be the date on which the order was served upon the assessee by the Tribunal. The assessee by placing heavy reliance upon the judgment D. Saibaba v. Bar Council of India [2003] 6 SCC 186 argues that the words, as occurring in the Section 254(2) of the Act, "the end of the month in which the order was passed" should be construed as "the date when the copy of the order was served." In the event the said order is not communicated due to laches of the Tribunal or for any reason whatsoever, the remedy against the said order may be lost and a delayed communication may adversely affect the right of a party to make an application by shortening the period of limitation. 6. The assessee further submits that it was held by the Supreme Court in D. Saibaba (supra) that where literal construction or plain meaning may cause hardship, futility, absurdity or uncertainty, the Court may prefer purposive or contextual construction to arrive at a more just, reasonable and sensible result and, therefore, the starting point of limitation should be interpreted as the date of communication of the order, not from the date of the order as provided in Section 254(2) of the Act. 7. The assessee submits that the pronouncement of the order in the open court is not communication of the order and by itself cannot be the starting point for determining the period of limitation. The order has to be communicated to the parties affected by the said order so that the party adversely affected therefrom may know reasons and contents of the same and formulate grounds of attack before the appellate or higher forum. 8. The assessee points out that the judgment in D. Saibaba (supra) was applied by Gujarat High Court in a case Peterplast Synthetics (P.) Ltd. v. Asstt. CIT [2014] 44 taxmann.com 302/364 ITR 16 to the provision of 254 (2) of the said Act. It was held in the said judgment that the limitation period for an application for rectification of the order under section 254(2) should be counted from the date of actual receipt of the order but not from the date of order. 9. According to the assessee, since the order of the Tribunal was served upon the assessee only on December 05, 2018, the application for rectification was within the time and the Tribunal ought not to have rejected the said application on the ground of limitation. M.P No.63/Chny/2020 4 10. It is the contention of the Revenue before us that section 254 of the Income-tax Act, 1961 is clear in its term and specific period of limitation prescribed by the statute cannot be otherwise interpreted or extended by this Court. 11. The Revenue draws the attention of the Court to section 260A of the Income-tax Act, 1961 to indicate that for the purpose of filing an appeal under said section, the limitation period will start from the date on which the order appealed against is received by the assessee. The difference in phraseology in Sections 254(2) and 260A of the Act with regard to limitation should be presumed to indicate the different intention on the part of the legislature. The legislature must be deemed to have intended what it has said and the Court should not presume that the legislature made something other than what it said. 12. The revenue further supports the view of the Tribunal that since the order was pronounced of the open Court, it has to be presumed that the assessee had knowledge of the order from said date and therefore, there is nothing wrong in order of the Tribunal in computing the period of limitation from the date of order. 13. The answer to the controversy can easily be traced to section 268 of the Act, which has been glossed over by the parties before us as well as by the Tribunal below. Section 268 of the Income-tax Act reads as follows: "Exclusion of time taken for copy. 268. In computing the period of limitation prescribed for an appeal or an application under this Act, the day on which the order complained of was served and, if the assessee was not furnished with a copy of the order when the notice of the order was served upon him, the time requisite for obtaining a copy of such order, shall be excluded." 14. The said section has replaced Section 67-A of the Indian Income-tax Act, 1922. The said section provided as follows:— "Section 67A. Computation of periods of limitation. —In computing the period of limitation prescribed for an appeal under this Act or for an application under section 66, the day on which the order complained of was made, and the time requisite for obtaining a copy of such order, shall be excluded." 15. A comparison of the aforesaid two sections makes it clear that by introducing Section 268, the legislature intended to introduce a different exclusion period in case the order complained of had been served upon the assessee. 16. Section 268 operates in two different scenarios: (a) when the copy of the order was served upon the assessee; and (b) when the copy of the order was not served with the notice of order. In case of former, the time period between the date of the order and date of service of the order upon the assessee has to be excluded and in the latter case the time period spent in obtaining the certified copy of the order by the assessee is to be excluded. 17. In the present case, the order was passed on September 09, 2018, and the copy of order was admittedly served upon the assessee on December 05, 2018. Therefore, the Tribunal should have excluded the time period between September 09, 2018, to December 05, 2018, in computing the period of limitation. The Tribunal was wrong in not applying the exclusion period in computing the period of limitation and rejecting the application being barred by limitation. 18. If Section 254(2) is read with sections 254(3) and 268 of the Act and no hardship or unreasonableness can be found in the scheme of the Act. The Court need not make a violence to the words of section 254(2) by substituting the word within "the end of the month in which the order was passed" by the word "the date on which the M.P No.63/Chny/2020 5 order was served". Such interpretation is absolutely uncalled for when the application has been served upon an assessee in terms of section 254(3) of the Act. 19. Since it is not necessary to interpret Section 254(2) differently to avoid hardship or absurdity or uncertainty, the judgment in D. Saibaba case has no applicability to the present case. 20. The controversy with regard to whether pronouncement of a judgment in open court amounts to communication of the order is much ado about nothing since the order complained of in this case was served upon the assessee in terms of section 254(3) of the Act. 21. We are not inclined to agree with the reasoning of Peterplast Synthetics (P.) Ltd. (supra) since the same was passed without considering section 268 of the Income- tax Act, 1961. However, we agree with the ultimate conclusion of the said judgment. 22. The appeal is, accordingly, allowed. The Tribunal below is directed to hear out the application under section 254(2) taken out by the assessee on merit and dispose of the same within a period of six weeks from the date of communication of this order. 23. The Income-tax Appeal No. 28 of 2020 is allowed. There will be no order as to costs. 24. Urgent certified website copy of the judgment shall be supplied to the parties, if applied for, upon compliance with all requisite formalities. It could be seen that Hon’ble Court, after considering the amended provisions as well as the provisions of Sec.268 vis-à-vis Section 67-A of earlier Indian Income-tax Act, 1922, held that the period falling between dates of passing of order and actual receipt of order was to be excluded while computing the period of limitation. The same squarely applies to facts of present case before us. 5. The decision of Hon’ble Delhi High Court in Golden Times Services (P.) Ltd. V/s DCIT (113 Taxmann.com 524) [though it is in the context of ex-parte order and in the context of Rule 24 of Income Tax (Appellate Tribunal) Rules, 1963] has adopted similar approach and held that the starting point of limitation provided under section 254(2) has to commence from date of actual receipt of judgment and order passed by Tribunal which is sought to be reviewed. This decision has subsequently been followed by Mumbai Tribunal in Techknoweledgy Interactive M.P No.63/Chny/2020 6 Partners P. Ltd. V/s ITO (130 Taxmann.com 194) to recall the ex-parte order. 6. Another decision referred before is the decision of Hon’ble High Court of Madras in S.P. Balasubrahmanyam V/s ACIT (75 Taxmann.com 56). Upon perusal of the same, we find that the same has been rendered in the context of pre-amended provisions and Hon’ble Court has dismissed assessee’s appeal on the ground that the rectification application was filed after the prescribed period and the same was bereft of any details as to when the order was served and where the office of assessee was situated. Accordingly, the appeal was dismissed. Clearly, this decision is factually different and has no application to the fact of the present case before us. 7. The decision of Hon’ble Karnataka High Court in Karuturi Global Ltd. V/s DCIT (116 Taxmann.com 924) is a case wherein the application was preferred with inordinate delay of 497 days and therefore, this case has no application to the case before us. 8. Another decision as referred before us is the decision of Hon’ble Supreme Court in Sree Ayyanar Spinning & Weaving Mills Ltd. V/s CIT (171 Taxman 498). Upon perusal of the same, we find the same to be contextually different since in that case the application for rectification was filed within four years and it was Tribunal which took its own time to dispose of the application. 9. Therefore, respectfully following the directly applicable decision of Hon’ble Calcutta High Court in the case of Anil Kumar Nevatia V/s ITO (supra), we would hold that the period falling between dates of passing of order and actual receipt of order was to be excluded while computing the period of limitation for the purpose of Sec.254(2). M.P No.63/Chny/2020 7 10. In the result, since the tax effect in the appeal is much more than the prescribed limit, the Tribunal order passed in ITA No.1203/Chny/2019 passed in bunch of appeals on 22.08.2019, stand recalled. The appeal is restored to its original status. The registry is directed to place the appeal for fresh hearing before regular bench in due course after intimating both the sides. 11. The application stand allowed in terms of our above order. Order pronounced on 30 th June, 2022. Sd/- (MAHAVIR SINGH) उपा ! /VICE PRESIDENT Sd/- (MANOJ KUMAR AGGARWAL) लेखा सद) / ACCOUNTANT MEMBER चे,ई Chennai; िदनांक Dated : 30-06-2022. EDN EDNEDN EDN आदेशकीVितिलिपअ&ेिषत/Copy of the Order forwarded to : 1. अपीलाथ /Appellant 2. यथ /Respondent 3. आयकर आयु (अपील)/CIT(A) 4. आयकर आयु /CIT 5. िवभागीय ितिनिध/DR 6. गाड फाईल/GF