Sri Pothina Venkata Swamy, Vijayawada V. The DCIT, Central Circle, Vijayawada

MA 67/VIZ/2009

• Counselvise Citation: [2010] 123 COUNSELVISE.COM (IT) 4715 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 7 month(s) 9 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-07-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 09-04-2010
• Assessment Year: 1992-1993
• Appeal Filed On: 26-11-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G S S GOPINATH
• Assessee Lawyers: C V K PRASAD
• Keywords: Rectification of order
• Section: 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER MA NO.67/VIZAG/2009 (ARISING OUT OF ITA NO.178/VIZAG/1999 ASSESSMENT YEAR : 1992-93 POTHINA VENKATA SWAMY VIJAYAWADA DCIT CENTRAL CIRCLE VIJAYAWADA (APPELLANT) VS. (RESPONDENT) PAN NO.AFOPP 5377C MA NO.68/VIZAG/2009 (ARISING OUT OF ITA NO.180/VIZAG/1999 ASSESSMENT YEAR : 1992-93 POTHINA VENKATA RAMA RAO VIJAYAWADA DCIT CENTRAL CIRCLE VIJAYAWADA (APPELLANT) VS. (RESPONDENT) PAN NO.AENPP 0705N APPELLANT BY: SHRI C.V.K. PRASAD, ADVOCATE RESPONDENT BY: SHRI G.S.S. GOPINATH, DR ORDER PER SHRI S.K. YADAV, JUDICIAL MEMBER:- THESE MISCELLANEOUS APPLICATIONS ARE PREFERRED AG AINST THE MISCELLANEOUS PETITION NO.44 AND 45 OF 2004 AND THE TRIBUNALS ORDER PASSED IN ITA NO.178 & 180/VIZAG/1999 WITH THE SUBMISSIONS THAT AN ERROR APPARENT FROM THE ORDER OF THE TRIBUNALS IS CREPT. AS SUCH THE NECESSARY RECTIFICATION IS CALLED FOR. DURING THE COURSE OF HEARING, IT WAS N OTICED THAT TRIBUNAL HAS DECIDED THE APPEAL IN ITA NO.178 & 180 OF 2009 VIDE ITS ORDER DATED 15.2.2001. THEREAFTER, THE MISCELLANEOUS APPLICATI ON U/S 254(2) VIDE M.P. NO.21 AND 22 OF 2001 WERE FILED AND WERE DISMISSED BY THE TRIBUNAL FINDING NO MERIT THEREIN. THE ASSESSEE AGAIN FILED MISCELL ANEOUS APPEALS VIDE M.P. NOS.85 & 86 BUT THE SAME WERE DISMISSED BEING BARRE D BY LIMITATION VIDE ORDER DATED 18.1.2008. THEREAFTER THE ASSESSEE AGAI N PREFERRED THE MISCELLANEOUS APPLICATION VIDE M.P. NO.44 & 45 OF 2 004 SEEKING RECTIFICATION IN THE ORDER OF THE TRIBUNAL BUT IT WAS DISMISSED B Y THE TRIBUNAL VIDE ITS ORDER 2 DATED 14.8.2008. NOW THE ASSESSEE HAS MOVED A FRES H MISCELLANEOUS APPLICATION ON THE SAME ISSUES BEFORE THE TRIBUNAL SEEKING RECTIFICATION IN THE ORDER OF THE TRIBUNAL DATED 15.2.2001. SINCE THE M ISCELLANEOUS APPLICATION WAS FILED BEYOND THE PRESCRIBED PERIOD OF 4 YEARS A ND ALSO AGAINST THE MISCELLANEOUS PETITION, THE ASSESSEE WAS ASKED TO E XPLAIN AS TO HOW THESE MISCELLANEOUS APPLICATIONS ARE MAINTAINABLE. 2. IN RESPONSE THERETO, THE LD. COUNSEL FOR THE ASSE SSEE HAS CONTENDED THAT THESE MISCELLANEOUS APPLICATIONS ARE NOT FILED AGAINST THE ORDER OF THE TRIBUNAL DISPOSING OFF THE MISCELLANEOUS PETITION N O.44 & 45 OF 2004. THE MISCELLANEOUS APPLICATIONS ARE FILED AGAINST THE MA IN ORDER OF THE TRIBUNAL DATED 15.2.2001 AND FOR FILING THIS APPLICATION NO TIME LIMIT IS PRESCRIBED IN THE ACT. WHATEVER TIME LIMIT IS PRESCRIBED U/S 254 (2) IT IS FOR THE TRIBUNAL WHEN IT INTEND TO RECTIFY ANY MISTAKE OF ITS OWN. IN SUPPORT OF HIS CONTENTION HE HAS PLACED A RELIANCE UPON THE FOLLOWING JUDGEME NTS: 1. 301 ITR 434 (SC) SHRI AYYANGAR SPINNING & WEAVING M ILLS LTD VS. CIT 2. 81 ITD 282 BHILAI ENGINEERING CORPORATION LTD. VS. DCIT. 3. THE LD. D.R. ON THE OTHER HAND HAS EMPHATICALLY ARGUED THAT TIME LIMIT OF 4 YEARS IS PRESCRIBED U/S 254(2) FOR FILING AN A PPLICATION SEEKING RECTIFICATION IN THE ORDER OF THE TRIBUNAL. AT THE MOST THE ORDER OF THE TRIBUNAL MAY BE PASSED AFTER THE LAPSE OF THE PERIO D OF 4 YEARS FROM THE DATE OF THE ORDER BUT IN NO CASE THE APPLICATION SEEKING RECTIFICATION IN THE ORDER OF THE TRIBUNAL CAN BE FILED AFTER THE PERIOD 4 YEARS FROM THE DATE OF ORDER OF THE TRIBUNAL. IN SUPPORT OF HIS CONTENTION, HE PLA CED A RELIANCE UPON THE FOLLOWING JUDGEMENTS: 1. CIT VS. PEARL WOOLLEN MILLS 227 CTR (P&H) 614 2. CIT VS. KAMAL BHAI ISMILJI 288 ITR 297 (ALL) 3. SMT. POONAM KUMAR VS. ITO 59 ITD (ALL) 106 4. WE HAVE CAREFULLY EXAMINED THE MATERIAL AVAILAB LE ON RECORD AND THE JUDGEMENTS REFERRED TO BY THE PARTIES IN THE LIGHT OF RIVAL SUBMISSIONS AND WE 3 FIND THAT ADMITTEDLY THE TRIBUNAL HAS DISPOSED OFF THE APPEAL VIDE ORDER DATED 15.2.2001. AGAINST THIS ORDER ASSESSEE HAS FILED T HE MISCELLANEOUS APPLICATION WHICH WAS DISPOSED OFF VIDE ORDER DATED 15.7.2002. THEREAFTER, ASSESSEE AGAIN MOVED A MISCELLANEOUS APPLICATION AN D THIS APPLICATION WAS DISMISSED VIDE ORDER DATED 14.8.2008 ON THE GROUND THAT THE MISCELLANEOUS APPLICATION WAS FILED ON SIMILAR SET OF FACTS AND E ARLIER MISCELLANEOUS APPLICATIONS WERE REJECTED BY THE TRIBUNAL. NOW AG AIN THE ASSESSEE HAS FILED THE MISCELLANEOUS APPLICATION CLAIMING SAME RELIEF THEREIN. THIS APPLICATION WAS FILED AFTER A PERIOD OF 4 YEARS FROM THE DATE O F THE ORDER OF THE TRIBUNAL. DURING THE COURSE OF HEARING THE LD. COUNSEL FOR TH E ASSESSEE HAD ADMITTED THAT THIS APPLICATION IS NOT FILED AGAINST THE ORDE R OF THE TRIBUNAL PASSED ON MISCELLANEOUS APPLICATION NO.44 & 45 OF 2004. THER EFORE, WE ARE CONFINED WITH THE LEGAL PROPOSITIONS WHETHER THE MISCELLANEO US APPLICATION CAN BE FILED AFTER A PERIOD OF 4 YEARS FROM THE DATE OF THE ORDE R OF THE TRIBUNAL. IN THIS REGARD, WE MAY MAKE A REFERENCE TO THE PROVISIONS O F SUB-SECTION 2 OF SECTION 254 OF THE ACT, ACCORDING TO WHICH THE MISC ELLANEOUS APPLICATION IS TO BE FILED WITHIN A PERIOD OF 4 YEARS. THE LD. COUNS EL FOR THE ASSESSEE HAS CONTENDED THAT THIS PERIOD OF 4 YEARS IS AVAILABLE TO THE TRIBUNAL IF THE TRIBUNAL INTEND TO RECTIFY ANY MISTAKE APPARENT FRO M THE RECORD OF ITS OWN. BUT IN CASE WHERE RECTIFICATION IS SOUGHT BY THE PA RTIES NO TIME LIMIT IS PRESCRIBED. THIS ASPECT WAS EXAMINED BY THE APEX C OURT AND VARIOUS HIGH COURTS. 5. IN THE CASE OF SHRI AYYANGAR SPINNING & WEAVING M ILLS LTD. VS. CIT (SUPRA), THEIR LORDSHIP OF THE APEX COURT HAVE HELD THAT SECTION 254(2) OF THE I.T. ACT DEALING WITH THE POWERS OF THE APPELLATE TR IBUNAL TO PASS ORDER OF RECTIFICATION OF MISTAKE IS IN TWO PARTS. THE FIRS T PART REFERS TO THE SUO-MOTO EXERCISE OF THE POWER OF RECTIFICATION, WHEREAS THE SECOND PART REFERS TO RECTIFICATION AND AMENDMENT ON AN APPLICATION MADE BY THE ASSESSEE OR THE ASSESSING OFFICER POINTING OUT THE MISTAKE IN THE R ECORD. WHERE THE APPLICATION FOR RECTIFICATION IS MADE WITHIN 4 YEAR S OF THE APPELLATE ORDER OF THE TRIBUNAL, THE APPELLATE TRIBUNAL HAS JURISDICTI ON TO PASS THE ORDER DISPOSING OFF THE APPLICATION AND CANNOT REJECT THE APPLICATION ON THE GROUND THAT 4 YEARS HAS BEEN ELAPSED. THE RELEVANT OBSERV ATION OF THE APEX COURT ARE EXTRACTED HEREUNDER FOR THE SAKE OF REFERENCE: 4 IN THIS CASE, WE ARE ONLY CONCERNED WITH THE INTER PRETATION OF SECTION 254(2) REGARDING THE POWERS OF THE TRIBU NAL IN THE MATTER OF RECTIFICATION OF MISTAKES APPARENT FROM T HE RECORD. THIS CONTROVERSY HAS ARISEN BECAUSE ON DECEMBER 9, 1996, THE INCOME- TAX APPELLATE TRIBUNAL IN ITA NO.719(MDS)/94 HAD PA SSED AN ORDER UPHOLDING THE ORDER OF THE CIT(A) ON COMPUTATION OF INCOME UNDER SECTION 155J OF THE SAID ACT. BY THE SAID ORDER, T HE INCOME-TAX APPELLATE TRIBUNAL HAD DISMISSED THE APPEAL OF THE ASSESSEE ON THE GROUND THAT THE PROFIT AND LOSS ACCOUNT OF THE ASSE SSEE DID NOT REFLECT THE CORRECT PICTURE FOR THE ASSESSMENT YEAR 1989-90. ON AUGUST 2, 2000, THE ASSESSEE HAD MOVED A MISCELLANE OUS APPLICATION BEARING NO.40/2000 PRAYING FOR RECALL O F THE ORDER DATED DECEMBER 9, 1996, BY MAINLY RELYING UPON THE JUDGEM ENT OF THE COURT IN APOLLO TYRES CASE (2002) 255 ITR 273. AT THIS STAGE, IT MAY BE NOTED THAT THE MISCELLANEOUS APPLICATION DAT ED AUGUST 2, 2000, WAS FILED WITHIN FOUR YEARS FROM THE DATE OF THE TRIBUNALS ORDER DATED DECEMBER 9, 1996. TO COMPLETE THE CHRO NOLOGY OF EVENTS, IT MAY BE STATED THAT ON JANUARY 31, 2003, FOLLOWING THE JUDGEMENT OF THIS COURT IN APOLLO TYRES LIMITED (20 02) 255 ITR 273 THE TRIBUNAL ALLOWED THE RECTIFICATION APPLICATION FILED BY THE ASSESSEE AGAINST WHICH THE DEPARTMENT CARRIED THE M ATTER IN APPEAL TO THE HIGH COURT UNDER SECTION 260A OF THE INCOME-TAX ACT. BY THE IMPUGNED JUDGEMENT THE HIGH COURT CAME TO T HE CONCLUSION THAT UNDER SECTION 254(2) THE TRIBUNAL C OULD NOT HAVE ALLOWED RECTIFICATION BEYOND FOUR YEARS. THAT THE TRIBUNAL HAD NO POWER TO RECTIFY THE MISTAKE AFTER FOUR YEARS WHICH TIME IS SET OUT IN SECTION 254(2) ITSELF FOR PASSING AN ORDER OF RE CTIFICATION EITHER SUO MOTU OR ON AN APPLICATION FILED EITHER BY THE A SSESSEE OR BY THE ASSESSING OFFICER. THE HIGH COURT DID NOT GO INTO THE MERITS OF THE CASE. THE HIGH COURT ALLOWED THE APPEAL AND SET AS IDE THE ORDER OF THE TRIBUNAL ONLYON THE GROUND OF LIMITATION. HENC E, THIS CIVIL APPEAL BY SPECIAL LEAVE. IN THE LIGHT OF THE ABOVE CONTROVERSY, WE SET OUT HEREINBELOW THE PROVISIONS OF SECTION 254(2) OF THE 1961 ACT WHICH READ AS FOLLOWS: THE APPELLATE TRIBUNAL, MAY AT ANY TIME WITHIN FO UR YEARS FROM THE DATE OF THE ORDER, WITH A VIEW TO RECTIFYI NG ANY MISTAKE APPARENT FROM THE RECORD, AMEND ANY ORDER PASSED BY IT UNDER SUB-SECTION (1), AND SHALL MAKE SUCH AMENDMENT IF T HE MISTAKE IS BROUGHT TO ITS NOTICE BY THE ASSESSEE OR THE ASSESS ING OFFICER. ANALYSING THE ABOVE PROVISIONS, WE ARE OF THE VIEW THAT SECTION 254(2) IS IN TWO PARTS. UNDER THE FIRST PA RT, THE APPELLATE TRIBUNAL MAY, AT ANY TIME, WITHIN FOUR YEARS FROM T HE DATE OF THE ORDER, RECTIFY ANY MISTAKE APPARENT FROM THE RECORD AND AMEND ANY ORDER PASSED BY IT UNDER SUB-SECTION (1). UNDER TH E SECOND PART OF SECTION 254(2), THE REFERENCE IS TO THE AMENDMENT O F THE ORDER 5 PASSED BY THE TRIBUNAL UNDER SUB-SECTION (1) WHEN T HE MISTAKE IS BROUGHT TO ITS NOTICE BY THE ASSESSEE OR THE ASSESS ING OFFICER. THEREFORE, IN SHORT, THE FIRST PART OF SECTION 254( 2) REFERS TO THE SUO MOTU EXERCISE OF THE POWER OF RECTIFICATION BY THE TRIBUNAL WHEREAS THE SECOND PART REFERS TO RECTIFICATION AND AMENDME NT ON AN APPLICATION BEING MADE BY THE ASSESSING OFFICER OR THE ASSESSEE POINTING OUT THE MISTAKE APPARENT FROM THE RECORD. IN THIS CASE, WE ARE CONCERNED WITH THE SECOND PART OF SECTION 25 4(2). AS STATED ABOVE, THE APPLICATION FOR RECTIFICATION WAS MADE WITHIN FOUR YEARS. THE APPLICATION WAS WELL WITHIN FOUR YEARS. IT IS THE TRIBUNAL WHICH TOOK ITS OWN TIME TO DISPOSE OF THE APPLICATION. THEREFORE, IN THE CIRCUMSTANCES, THE HIGH COURT HAD ERRED IN HOLDING THAT THE APPLICATION COULD NOT HAVE BEEN EN TERTAINED BY THE TRIBUNAL BEYOND FOUR YEARS. IN THIS CONNECTION, OUR ATTENTION IS ALSO INVITED T O THE JUDGEMENT OF THE RAJASTHAN HIGH COURT IN THE CASE O F HARSHVARDHAN CHEMICALS AND MINERALS LTD. VS. UNION OF INDIA (2002) 256 ITR 767 WHEREIN AN IDENTICAL CONTROVERSY AROSE FOR DETERMINATION AND THE VIEW TAKEN BY THAT COURT WAS AS FOLLOWS (HEADNOTE): ONCE THE ASSESSEE HAS MOVED THE APPLICATION WITHI N FOUR YEARS FROM THE DATE OF APPEAL, THE TRIBUNAL CANNOT REJECT THAT APPLICATION ON THE GROUND THAT FOUR YEARS HAVE LAPS ED, WHICH INCLUDES THE PERIOD OF PENDENCY OF THE APPLICATION BEFORE THE TRIBUNAL. IF THE ASSESSEE HAS MOVED THE APPLICATIO N WITHIN FOUR YEARS FROM THE DATE OF THE ORDER, THE TRIBUNAL IS B OUND TO DECIDE THE APPLICATION ON THE MERITS AND NOT ON THE GROUND OF LIMITATION. SECTION 254(2) OF THE INCOME-TAX ACT, 1961, LAYS DOW N THAT THE APPELLATE TRIBUNAL MAY AT ANY TIME WITHIN FOUR YEAR S FROM THE DATE OF THE ORDER RECTIFY THE MISTAKE APPARENT FROM THE RECORD BUT THAT DOES NOT MEAN THAT IF THE APPLICATION IS MOVED WITH IN THE PERIOD ALLOWED, I.E., FOUR YEARS, AND REMAINS PENDING BEFO RE THE TRIBUNAL, AFTER THE EXPIRY OF FOUR YEARS THE TRIBUNAL CAN REJ ECT THE APPLICATION ON THE GROUND OF LIMITATION. WE ARE IN AGREEMENT WITH THE VIEW EXPRESSED BY THE RAJASTHAN HIGH COURT IN THE CASE OF HARSHVARDHAN CH EMICALS AND MINERALS LTD. (2002) 256 ITR 767. 6. WE HAVE ALSO EXAMINED THE OTHER JUDGEMENTS REFER RED TO BY THE PARTIES BUT WE DO NOT FIND ANYWHERE IN ANY OF THE J UDGEMENTS THAT NO TIME LIMIT IS PRESCRIBED FOR THE PARTIES FOR MAKING THE RECTIFICATION APPLICATION TO THE TRIBUNAL SEEKING RECTIFICATION IN THE ORDER OF THE TRIBUNAL. WE THEREFORE FOLLOWING THE JUDGEMENT OF THE APEX COURT ARE OF TH E CONSIDERED VIEW THAT THE APPLICATION FOR RECTIFICATION SHOULD BE FILED WITHI N THE PERIOD OF 4 YEARS FROM THE DATE OF ORDER OF THE TRIBUNAL. THE TRIBUNAL MA Y HOWEVER DISPOSE OFF THE 6 MISCELLANEOUS APPLICATION FILED WITHIN THE 4 YEARS AFTER THE PRESCRIBED PERIOD, BECAUSE FOR THE LAPSES OF THE TRIBUNAL, THE PARTIES MAY NOT SUFFER. 7. TURNING TO THE FACTS OF THE CASE, THE ASSESSEE H AS FILED THE PRESENT M.A. AFTER MORE THAN 8 YEARS EVEN WITHOUT REALIZING THE FACT THAT EARLIER APPLICATION FOR THE SAME RELIEF WAS REJECTED BY THE TRIBUNAL. IN THE CASE OF CIT VS. PEARL SPINNING & WEAVING MILLS (SUPRA) THE PUNJAB & HARYANA HIGH COURT HAVE CATEGORICALLY HELD THAT IF FIRST MISCELL ANEOUS APPLICATION IS REJECTED, THE SECOND MISCELLANEOUS APPLICATION SHOULD NOT BE ACCEPTED ON SIMILAR GROUNDS. KEEPING IN VIEW THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT THE MIS CELLANEOUS APPLICATION OF THE ASSESSEES IS BARRED BY TIME AND IS NOT MAINTAIN ABLE. WE THEREFORE, DISMISS THE SAME BEING BARRED BY LIMITATION. PRONOUNCED IN THE OPEN COURT ON 5.7.2010 SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM, DATED 5 TH JULY, 2010 COPY TO 1 SRI POTHINA VENKATESWARA SWAMY, SHOP NO.46, PRAKA SH MARKET, VIJAYAWADA-520 001. 2 SRI POTHINA VENKATA RAMA RAO, SHOP NO.35, PRAKASH MARKET, VIJAYAWADA- 520 001 3 DCIT, CENTRAL CIRCLE, VIJAYAWADA 4 THE CIT CENTRAL, HYDERABAD 5 THE CIT(A) (CENTRAL), HYDERABAD 6 THE DR, ITAT, VISAKHAPATNAM. 7 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM