The ITO, Kannur V. The Irinave service Co-op Rural Bank Ltd, Kannur

MA 84/COCH/2021

AI Insights

The case involves multiple miscellaneous petitions filed by the Income Tax Officer against various Service Co-operative Banks in Kerala, seeking rectification of earlier Tribunal orders. These petitions were based on a change in legal interpretation following a High Court decision. However, the Tribunal dismissed the petitions as they were filed beyond the statutory time limit. The Tribunal emphasized that rectification under section 254(2) must adhere to the prescribed time limits, and any delay cannot be condoned, as it would oust the jurisdiction of the Tribunal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 115512 (ITAT-COCHIN)
• Duration Of Justice: 3 year(s) 10 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 17-08-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 29-09-2019
• Other Referred Cases: Chirakkal Service Co-operative Bank Ltd. vs. CIT [2016] 384 ITR 490 (Ker), CIT vs. Poonjar Service Co-operative Bank Ltd. [2019] 414 ITR 67 (Ker)(FB), Perinthalmanna Service Co-operative Bank Ltd. [2014] 363 ITR 268 (Ker), Mavilayi Service Co-operative Bank Ltd. vs. Pr. CIT [2021] 431 ITR 1 (SC), Kil Kotagiri Tea & Coffee Estates Co. Ltd. vs. ITAT [1988] 174 ITR 579 (Ker), Asst. CIT v. Saurashtra Kutch Stock Exchange Ltd. [2008] 305 ITR 227 (SC), CIT v. Aruna Luthra [2001] 252 ITR 76 (P&H)(FB), CIT v. Gracemac Corporation [2023] 456 ITR 135 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order; Question of law
• Section: 154; 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Sanjay Arora, AccountantMemberand Shri Manomohan Das, JudicialMember MPNos. 84 to 87/Coch/2021 (Arising out of ITA Nos. 715 to 718/Coch/2013) (Assessment Years:2007-08 to 2010-11) The Income Tax Officer Ward -1, Kannur vs. Irinav Service Co-operative Bank Ltd. KPW 11, 569, CRC Haji Road Irinave, Kannur [PAN:AABAT3987B] Applicant Respondent (Represented by Shri George Thomas, CA) MPNo. 149/Coch/2021 (Arising out of ITA No. 483/Coch/2017) (Assessment Year: 2013-14) The Income Tax Officer Ward -2(4), Kozhikode vs. Kalpetta Service Co-operative Bank Ltd. Kalpetta Post, Wayanad [PAN:AAAAT9488J] Applicant Respondent (Represented by None) MPNo. 180/Coch/2021 (Arising out of ITA No. 07/Coch/2018) (Assessment Year: 2013-14) The Income Tax Officer Ward -2, Kollam vs. Punalur Service Co- Operative Bank Ltd. Sivan Koil Road, Punalur Kollam [PAN: AAGAS6534C] Applicant Respondent (Represented by None) MP Nos. 84 to 87/Coch/2021,& Others ITO v. Irinav Service Co-operative Bank Ltd.& Ors. 2 MPNo. 204/Coch/2021 (Arising out of ITA No. 434/Coch/2017) (Assessment Year:2013-14) The Income Tax Officer Ward 2, Kalpatta North Wayanad vs. Vellamunda Service Co- OperativeBank Ltd. Meenangadi P.O., Wayanad [PAN:AABAV0725H] Applicant Respondent (Represented by Shri P. Subramonian, CA) MPNo. 226/Coch/2021 (Arising out of ITA No. 513/Coch/2014) (Assessment Years: 2007-08) The Income Tax Officer Ward -2, Kannur vs. Pinarayi Service Co- Operative Bank Ltd. Pinarayi, Thalassesry Kannur [PAN:AAJFP7993E] Applicant Respondent (Represented by Shri T.M. Sreedharan, Advocate) Applicant by: Smt. J.M. Jamuna Devi, Sr. D.R. Date of Hearing: 18.08.2023 Date of Pronouncement:18.08.2023 O R D E R Per: Sanjay Arora, AM The captioned miscellaneous petitions (MPs) by the Revenue under section 254(2) of the Income Tax Act, 1961 (‘the Act’) involving a common issue, were posted for hearing and, accordingly, heard together, and which also explains their disposal per a common order for the sake of convenience. 2. The order u/s. 254(1) of the Act by the Tribunal in all the appeals giving rise to the instant MPs was passed by it following the decision by the Hon'ble jurisdictional MP Nos. 84 to 87/Coch/2021,& Others ITO v. Irinav Service Co-operative Bank Ltd.& Ors. 3 High Court in Chirakkal Service Co-operative Bank Ltd. vs. CIT [2016] 384 ITR 490 (Ker), on it being held as no longer good law per it’s subsequent decision in CIT vs. Poonjar Service Co-operative Bank Ltd. [2019] 414 ITR 67 (Ker)(FB) dated 19.3.2019, confirming it’s earlier decision in Perinthalmanna Service Co-operative Bank Ltd. [2014] 363 ITR 268 (Ker). The same were accordingly filed on 30.09.2019. The assessees, on the other hand, plead non-maintainability thereof in view of the time limitation attending the filing of the instant MPs. On merits, it is stated that the decision in Poonjar Service Co-operative Bank Ltd. (supra) obtains no longer, having been since reversed in Mavilayi Service Co-operative Bank Ltd. vs. Pr. CIT [2021] 431 ITR 1 (SC). Reinstating the appeals, accepting the MPs, would therefore be an exercise in futility. 3. We have heard the rival contentions, and perused the material on record. 3.1 We tabulate hereinbelow, for ready reference, the date of passing of the impugned orders along with the date of filing the corresponding MP by the Revenue: MP No. Date of Tribunal Order Date of filing MP 84 to 87/Coch/2021 19.07.2016 30.09.2019 149/Coch/2021 20.06.2018 30.09.2019 180/Coch/2021 01.08.2018 30.09.2019 204/Coch/2021 12.10.2018 30.09.2019 226/Coch/2021 28.09.2016 30.09.2019 3.2 As apparent, all the impugned orders are passed after 01.06.2016, whereat the time limitation for filing a Miscellaneous Application u/s.254(2) of the Act stood reduced, from the erstwhile four years from the date of the order sought to be rectified, to six months from the end of the month in which the said order was passed, i.e., by Finance Act, 2016, w.e.f. 01.06.2016. The date of filing the MPs in all the instant cases is 30.9.2019 and, thus, the applications are, as apparent, out of time, i.e., barred by time. The Revenue’s reliance on the decision in Kil Kotagari Tea MP Nos. 84 to 87/Coch/2021,& Others ITO v. Irinav Service Co-operative Bank Ltd.& Ors. 4 &Coffee Estates Co. Ltd. vs. ITAT [1988] 174 ITR 579 (Ker) is misplaced. The same clarifies, inter alia, that the decision by the High Court or Supreme Court shall have retrospective operation. Rectification u/s. 154 or, as the case may be, s. 254(2) of the Act, can arise on it’s basis, even if rendered subsequent to the order sought to be amended, i.e., where it is inconsistent with the decision by the said Courts. The same in fact represents trite law, as once the law is interpreted by a constitutional court, the same is to be read as it always was. That is, the law, irrespective of the date of pronouncement of the judgement, is to be read as declared since its inception. Reference in this context may also be made to decisions in Asst. CIT v. Saurashtra Kutch Stock Exchange Ltd. [2008] 305 ITR 227 (SC); and CIT v. Aruna Luthra [2001] 252 ITR 76 (P&H)(FB), to cite two. 3.3 The same, however, to be given effect to, would require rectification provision in its respect having been invoked within a statutory time limit. True, any court or tribunal has an inherent power to rectify the mistake in its order inasmuch as no court or tribunal can, by its error or omission, cause prejudice to either side before it. Section 254(2) of the Act, however, places a limitation of time within which the Tribunal can do so. The delay in filing the rectification application, which the Tribunal has no power to condone, would operate to oust the jurisdiction of the Tribunal in passing a rectification order inasmuch as it’s order is to be within the time limit prescribed by the statute therefor. Even if non-applicability of the said time limitation was to be argued on the basis of the principle of acutus curiae neminem gravabit, or otherwise taken account of, the instant, it needs to be borne in mind, is not a case of suo motu rectification, but only one following a reversal by the Hon’ble High Court of it’s earlier decision, obtaining at the relevant time. There has been, therefore, no mistake or omission by the Tribunal per se, and it’s order becomes mistaken, liable for amendment, in view of the subsequent decision on the question of law by the Hon’ble jurisdictional High Court. MP Nos. 84 to 87/Coch/2021,& Others ITO v. Irinav Service Co-operative Bank Ltd.& Ors. 5 3.4 Continuing further, the decision in Kil Kotagiri Tax & Coffee Estates Co. Ltd. (supra), even as it provides a legal basis for the Revenue to initiate the rectification proceedings, the same would have necessarily to be within the time limit provided in its respect by law. As explained recently in CIT v. Gracemac Corporation [2023] 456 ITR 135 (SC), once a judgement is passed by a court following another judgement and, subsequently, the latter judgement is overruled on a question of law, it cannot have an effect of reopening or reviving the former judgement passed following the overruled judgement, nor can be the same be reviewed. 3.5 The instant MPs are, for the reasons afore-stated, barred by time. We decide accordingly. 4. In the result, the captioned MPs by the Revenue are dismissed as not maintainable. Order pronounced on August 18, 2023 in the open court on the conclusion of the hearing. Sd/- Sd/- (Manomohan Das) (Sanjay Arora) Judicial Member Accountant Member Cochin, Dated: August 18, 2023 Copy to: 1. The Appellant 2. The Respondent 3. The CIT concerned 4. The DR, ITAT, Cochin 5. Guard File By Order Assistant Registrar n.p. ITAT, Cochin