The Addl .Director of Income Tax (Intelligence & Criminal Investigation), Hyderabad V. The Cumbum Co-operative Town Bank Limited , Prakasam

MA 89/Hyd/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4515 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 12 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-05-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2013-2014
• Appeal Filed On: 22-11-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T. SUNIL GOUTAM
• Keywords: Set aside
• Section: 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “A”: HYDERABAD BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER AND LAXMI PRASAD SAHU, ACCOUNTANT MEMBER M.A. No. 89/Hyd/2021 (in ITA No. 2040/H/2018 Assessment Year: 2013-14) The Asst. Director of Income-tax, (Intelligence & Criminal Investigation), Hyderabad. Vs. The Cumbum Cooperative Town Bank Ltd., Cumbum, Prakasam Dist. PAN – AABAT 3057A (Applicant) (Respondent) Revenue by: Shri T. Sunil Goutam Assessee by: Smt. S. Sandhya Date of hearing: 29/04/2022 Date of pronouncement: 05/05/2022 O R D E R PER L.P. SAHU, A.M.: This Miscellaneous Application is filed by the Revenue u/s 254(2) of the Income Tax Act seeking rectification of the order of the Tribunal dated 07/05/2021 in ITA No. 2040/Hyd/2018. 2. Before us, it was the contention of the ld. DR that the Tribunal had allowed the appeal of the assessee for the M.A. No. 89//Hyd/2021 T h e C u m b u m C o o p e r a t i v e T o w n B a n k L t d . , P r a k a s a m D t . :- 2 -: reasons mentioned in 3.1 & 3.2 of the order. The ld. DR submitted that amendments substituting filing SFT instead of AIR return were effective from FY 2015-16 relevant to AY 2016-17 onwards. Whereas the reporting entity for the year under consideration i.e. AY 2013-14 and there was an obligation to file Annual Information Return (AIR) but not SFTs for reporting the specified transactions under code 001 i.e. cash deposits over 10 lakhs, which is effective from 01/04/2004. The ld. DR, therefore, submitted that there is a mistake apparent from the record and the said mistake is required to be rectified by recalling the order passed in ITA No. 2040/Hyd/2018 dated 07/05/2021. 3. Per contra, the ld. AR of the assessee submitted that there is a paradigm shift in the jurisprudence in the provisions of section 254 as held by the Hon’ble Supreme Court in the case of CIT Vs. Reliance Telecom Ltd., [2021] 133 taxmann.com 41 (SC) in paragraphs No. 3.1 & 3.2 to 6 of the judgment, which are as under: “3.1 We have considered the order dated 18.11.2016 passed by the ITAT allowing the miscellaneous application in exercise of powers under Section 254(2) of the Act and recalling its earlier order dated 06.09.2013 as well as the original order passed by the ITAT dated 06.09.2013. 3.2 Having gone through both the orders passed by the ITAT, we are of the opinion that the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013 is beyond the scope and ambit of the powers under Section 254(2) of the Act. While allowing the application under Section M.A. No. 89//Hyd/2021 T h e C u m b u m C o o p e r a t i v e T o w n B a n k L t d . , P r a k a s a m D t . :- 3 -: 254(2) of the Act and recalling its earlier order dated 06.09.2013, it appears that the ITAT has re-heard the entire appeal on merits as if the ITAT was deciding the appeal against the order passed by the C.I.T. In exercise of powers under Section 254(2) of the Act, the Appellate Tribunal may amend any order passed by it under sub-section (1) of Section 254 of the Act with a view to rectifying any mistake apparent from the record only. Therefore, the powers under Section 254(2) of the Act are akin to Order XLVII Rule 1 CPC. While considering the application under Section 254(2) of the Act, the Appellate Tribunal is not required to re-visit its earlier order and to go into detail on merits. The powers under Section 254(2) of the Act are only to rectify/correct any mistake apparent from the record. 4. In the present case, a detailed order was passed by the ITAT when it passed an order on 06.09.2013, by which the ITAT held in favour of the Revenue. Therefore, the said order could not have been recalled by the Appellate Tribunal in exercise of powers under Section 254(2) of the Act. If the Assessee was of the opinion that the order passed by the ITAT was erroneous, either on facts or in law, in that case, the only remedy available to the Assessee was to prefer the appeal before the High Court, which as such was already filed by the Assessee before the High Court, which the Assessee withdrew after the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013. Therefore, as such, the order passed by the ITAT recalling its earlier order dated 06.09.2013 which has been passed in exercise of powers under Section 254(2) of the Act is beyond the scope and ambit of the powers of the Appellate Tribunal conferred under Section 254 (2) of the Act. Therefore, the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013 is unsustainable, which ought to have been set aside by the High Court. 5. From the impugned judgment and order passed by the High Court, it appears that the High Court has dismissed the writ petitions by observing that (i) the Revenue itself had in detail gone into merits of the case before the ITAT and the parties filed detailed submissions based on which the ITAT passed its M.A. No. 89//Hyd/2021 T h e C u m b u m C o o p e r a t i v e T o w n B a n k L t d . , P r a k a s a m D t . :- 4 -: order recalling its earlier order; (ii) the Revenue had not contended that the ITAT had become functus officio after delivering its original order and that if it had to relook/revisit the order, it must be for limited purpose as permitted by Section 254(2) of the Act; and (iii) that the merits might have been decided erroneously but ITAT had the jurisdiction and within its powers it may pass an erroneous order and that such objections had not been raised before ITAT. 6. None of the aforesaid grounds are tenable in law. Merely because the Revenue might have in detail gone into the merits of the case before the ITAT and merely because the parties might have filed detailed submissions, it does not confer jurisdiction upon the ITAT to pass the order de hors Section 254(2) of the Act. As observed hereinabove, the powers under Section 254(2) of the Act are only to correct and/or rectify the mistake apparent from the record and not beyond that. Even the observations that the merits might have been decided erroneously and the ITAT had jurisdiction and within its powers it may pass an order recalling its earlier order which is an erroneous order, cannot be accepted. As observed hereinabove, if the order passed by the ITAT was erroneous on merits, in that case, the remedy available to the Assessee was to prefer an appeal before the High Court, which in fact was filed by the Assessee before the High Court, but later on the Assessee withdrew the same in the instant case. 3.1 Referring to this, the ld. AR submitted that once the Tribunal passed the order on merits, then, the Tribunal does not have powers to recall the order, but, it has power to rectify the mistakes which are apparent from record. 4. We have considered the rival submissions and perused the material on record. It is clear that only Annual Information Return (AIR) under code 001 was relevant to FY 2012-13 for AY 2013-14 (relevant AY before us). Having M.A. No. 89//Hyd/2021 T h e C u m b u m C o o p e r a t i v e T o w n B a n k L t d . , P r a k a s a m D t . :- 5 -: said so, the Tribunal instead of applying the provisions of AIR, inadvertently, applied the provisions as available for SFT. Therefore, there is an apparent mistake on record and it is a simple mistake committed by the Tribunal. Now coming to the issue raised by the ld. AR, we are of the opinion the Hon’ble Supreme Court vide para No. 3.2 (supra) has mentioned that the powers u/s 254(2) are only to rectify any mistake apparent from the record. In our view, the subsequent observation of the Hon’ble Supreme Court in Para No. 6 (supra), that it does not confer jurisdiction upon the ITAT to pass the orders de hors section 254(2) of the Act. In the present case, there is an apparent mistake on record and, therefore, the said precedent cannot be applied. There are many class of cases, which may fall within the category of mistake apparent from record. For example, in case, the Tribunal dismissed the appeal on account of non-appearance of the assessee, it is within the relm of section 254(2) to recall the order dismissed for non-compliance by the assessee. Similarly, if the Tribunal dismissed the appeal on account of low tax effect and subsequently, it is brought to notice that tax effect more, then, the order can be recalled u/s 254(2). Similarly, in case, the Tribunal fails to decide or adjudicate any ground, the order can be recalled to adjudicate the grounds, as the Tribunal is final/last fact finding Authority. M.A. No. 89//Hyd/2021 T h e C u m b u m C o o p e r a t i v e T o w n B a n k L t d . , P r a k a s a m D t . :- 6 -: 4.1 In the light of the above, we are of the view that there is a mistake apparent from record in the order passed by the Tribunal dated 07/05/2021 while deciding the issue as instead of applying the provisions of AIR, Tribunal had applied the provisions of SFT. Therefore, we deem it fit and proper to recall the order passed by the Tribunal and direct the Registry to fix the appeal for hearing in due course of time for deciding the appeal in accordance with law, by issuing the notice of hearing to the parties. 5. In the result, the M.A. filed by the revenue is allowed in above terms. Order pronounced in the Open court on 5 th May, 2022. Sd/- Sd/- (LALIET KUMAR) (L. P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Dated: 5 th May, 2022. kv Copy to : 1 ADIT (Intelligence & Criminal Investigation) Hyderabad. 2 M/s The Cumbum Cooperative Town Bank Ltd., 10-2-25, Main Bazar, Cumbum, Prakasam District. 3 CIT(A) – 1, Hyderabad 4 DIT (I&CI), Hyderabad. 5 ITAT, DR, Hyderabad 6 Guard File. M.A. No. 89//Hyd/2021 T h e C u m b u m C o o p e r a t i v e T o w n B a n k L t d . , P r a k a s a m D t . :- 7 -: S . N o . D e t a i l s D a t e 1 D r a f t d i c t a t e d o n 2 D r a f t p l a c e d b e f o r e a u t h o r 3 D r a f t p r o p o s e d & p l a c e d b e f o r e t h e S e c o n d M e m b e r 4 D r a f t d i s c u s s e d / a p p r o v e d b y S e c o n d M e m b e r 5 A p p r o v e d D r a f t c o m e s t o t h e S r . P S / P S 6 K e p t f o r p r o n o u n c e m e n t 7 F i l e s e n t t o B e n c h C l e r k 8 D a t e o n w h i c h t h e f i l e g o e s t o H e a d C l e r k 9 D a t e o n w h i c h f i l e g o e s t o A . R . 10 D a t e o f D i s p a t c h o f o r d e r