THE ASSISTANT COMMR. OF INCOME TAX, CIRCLE-2(1), RAJKOT-GUJARAT V. M/S BHAVANI INDUSTRIES, RAJKOT-GUJARAT

MA 11/RJT/2025

AI Insights

The case involves the Income Tax Department (Revenue) filing a miscellaneous application against M/s Bhawani Industries, seeking rectification of an earlier Tribunal order which allowed certain deductions under section 80-IC of the Income Tax Act for the assessment year 2011-12. The Revenue argued that there was a mistake apparent from the record in the Tribunal's previous order. However, the Tribunal found the application to be time-barred by 21 months and 21 days and noted the absence of a condonation of delay petition. Consequently, the Tribunal dismissed the application without addressing the merits of the case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314105 (ITAT-RAJKOT)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-05-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Other Referred Cases: Tax Appeal No. 145 of 2023, ITA No. 125/Coch/2012
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIMANYU SINGH YADAV; LD.
• Assessee Lawyers: MEHUL RANPURA; LD
• Keywords: Condonation of delay; Rule of consistency; Rectification of order; Revision of order
• Section: 143(3); 263

Judgement Text

"आयकर अपीलȣय अͬधकरण, राजकोट Ûयायपीठ, राजकोट। IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER िविवध आवेदन सं./MA No.11/RJT/2025 (a/o ITA No.108/RJT/2016) Ǔनधा[रणवष[ / Assessment Year: 2011-12 The ACIT, Cir.2(1) Rajkot. बनाम Vs. M/s.Bhawani Industries C/1-B, 236/3, GIDC Aji Industrial Estate Rajkot. PAN : AACFB 8046 R (अपीलाथȸ/Appellant) : (Ĥ×यथȸ/Respondent) Ǔनधा[ǐरती कȧ ओर से/Assessee by : Shri Mehul Ranpura, ld.AR राजèव कȧ ओर से/Revenue by : Shri Abhimanyu Singh Yadav, ld.Sr.DR सुनवाई कȧ तारȣख /Date of Hearing : 07/03/2025 घोषणा कȧ तारȣख /Date of Pronouncement : 06/05/2025 ORDER PER Dr. ARJUN LAL SAINI, ACCOUNTANT MEMBER: By way of this Miscellaneous Application, the Revenue has sought to point out that a mistake apparent from record, has crept in the order of the Tribunal dated 03.10.2022, in assessee’s case, in ITA No.108/RJT/2016. 2. Learned DR for the Revenue, at the outset, pointed out that this miscellaneous application (MA) filed by the Revenue is barred by limitation by 21 Months and 21 days. Although, the revenue has not filed any petition for condonation of delay, but, it comes in the inherent power of the Tribunal to MA No.11 /RJT/2025 IA No.108/Rjt/2016) M/s Bhavani Industries) 2 condone the delay, even without filing petition for condition of delay, the Tribunal can condone the delay. Therefore, delay in filing the miscellaneous application, may be condoned by the Tribunal by using its inherent powers. 3. The ld.DR also pointed out that the Tribunal in its order, vide ITA No.108/RJT/2016, for assessment year (AY) 2011-12, order dated 3.10.2022, has committed error in para Nos.-10 to 10.5 of its order. Therefore, the finding of the Tribunal in para 10 to 10.5 contains the apparent mistake on record, which needs to be rectified. In order to support his stand, the ld.DR for the Revenue has also relied on the contents of the miscellaneous application, which are reproduced below: “2. The assessee had e-filed its ITR for the AY 2011-12 on 26.09.2011, declaring therein total income at Rs. 22,72,11,610/-. Thereafter the assessment in this case was finalized u/s 143(3) of the Act on 31.03.2014 wherein (i) disallowance of Rs. 6,58,98,942/- was made under 80-IC of the Act, (ii) disallowance/addition of Rs. 30,05,1167- i.e. GP on sale of Rudrapur Unit from Rajkot Unit @ 2 % of Rs. 12,95,30,904/-, (iii) Disallowance/Addition of Rs. 35,80,077/- i.e. administrative and selling expenses at 13.7% of Rs. 11,11,38,030/-, (iv) disallowance /addition of Rs.82,20,000/- i.e. remuneration paid to partners at 13.7% of Rs. 6,00,00,000/-. The total income was accordingly assessed at Rs. 30,79,15,750/- for the AY 2011-12. 2.1 The assessee thereafter moved an appeal before Ld. CIT(A)-2, Rajkot vide appeal no. CIT(A)-2/0056/14-15. The CIT(A)-2, Rajkot vide order dated 17.01.2016, deleted the entire addition made by the AO and held that: \"Considering the facts of the case and submission of the appellant and the judgments relied upon in support, cited supra, I am of the opinion that the AO was not justified in making addition of remuneration of Rs. 82,20,000/- to partners to be allocated to Rudrapur Unit and disallowances of gross profit difference of Rs.30,05,116/- as well as Admin. & Selling Expenses of Rs. 35,80,077/-. Thus, the addition of remuneration to partner, disallowances of the apportion of GP and administrative expenses etc. to the extent of Rs.1,48,05,193 made by (he assessing officer are deleted and this ground of appeal is allowed. \" 3. Subsequently, the revenue preferred an appeal before the Hon'ble ITAT on 05.04.2016, vide ITA NO. 108/RJT/2016. The Hon'ble ITAT vide order dated 03.10.2022, has held as under: 3.1. Disallowance of 6,58,98,942, u/s 80-IC of the Act: The Hon'ble ITAT has dismissed this ground of appeal and held that: MA No.11 /RJT/2025 IA No.108/Rjt/2016) M/s Bhavani Industries) 3 \"In view of the above and after considering the necessary details, we do not find any reason to interfere in the learned CIT-A and thus, we direct the AO allow the claim to the assessee under the provisions of section 80 1C of the Act. Hence the ground of appeal of the revenue is hereby dismissed. \" The Hon'ble ITAT vide para 10.1 of the order, has mentioned that\" Before we dwell upon the issue on hand, it is pertinent to note that the AO in the own case of the assessee in the immediate preceding assessment year has allowed the claim of deduction under section 80 1C of the Act. The copy of the assessment order under section 143(3) of the Act is placed on pages292 to 296 of the paper book. Undeniably, there is no change in the year under consideration viz a viz in the immediate preceding assessment year. Everything remained the same. Thus, in our considered view the principles of consistency need to be applied in the given facts and circumstances\" 5. However, it is pertinent here to mention here that the assessment order for AY 2010- 11 was overturned by the order of Ld. CIT-2, Rajkot vide their order u/s 263 passed on 19.01.2015 (copy attached), wherein the Ld. CIT-2, Rajkot has held the order as erroneous and prejudicial to the interest of Revenue. Thereafter, the assessment proceedings u/s 143(3) rws 263 of the Act were finalized on 21.01.2016 wherein Rs. 2,88,50,633/- were disallowed u/s 80-IC of the Act. 6. Given this crucial point, the reference made by ITAT on the order for AY 2010-11 in it order for AY 2011-12 appears to be erroneous and needs to be rectified. Accordingly, the present Miscellaneous Petition/Application MA is being filed with Hon'ble ITAT with a request to rectify the order dated 03.10.2022 in ITA No. 108/RJT/2016.” 4. On the other hand, Learned Counsel for the assessee, submitted before us, this miscellaneous application, filed by the Revenue, is barred by limitation by 21 Months and 21 days and the revenue did not file the petition for condonation of delay. Therefore such huge delay should not be condoned, without filing a petition for condonation of delay. Moreover, there is no provision in the Income tax Act to condone the delay in case of a miscellaneous application by the Tribunal by using its own inherent powers and discretionary powers. Therefore, the delay in filing the miscellaneous application should not be condoned and miscellaneous application of the revenue, should be dismissed on this score only. 5. On merit, the Learned Counsel for the assessee, stated that there is no apparent mistake in the order of the Tribunal. The Tribunal has considered the entire facts and arguments of learned DR, as well as, argument of Counsel for the MA No.11 /RJT/2025 IA No.108/Rjt/2016) M/s Bhavani Industries) 4 assessee and thereafter the order was passed on merit, therefore, Tribunal has passed the speaking order, which does not contain any error. To support his plea, Learned Counsel also submitted before the Bench, the written submissions, which are reproduced below: “This miscellaneous application is filed by the department against order passed by the Hon'ble Tribunal in the case of M/s. Bhavani Industries for the AY 2011-12 in ITA No. 108/RJT/2016 dated 03.10.2022. In this regard, brief facts of the case are narrated as under: i. The respondent has claimed deduction u/s 80IC of the Act for the assessment year under consideration, the claim was rejected by the assessing officer. ii. On appeal, Ld. CIT(A) allowed the deduction u/s 80IC, after verifying all the details related to business and manufacturing activities carried out by the respondent at Rudrapur Unit. iii. The revenue preferred appeal before the Hon'ble ITAT against allowing deduction u/s 80IC in ITA No. 108/RJT/2016. Hon'ble ITAT after going through paper books filed by the respondent, finding recorded by Ld.CIT(A) as also hearing arguments of the Ld. DR and Respondent's AR, upheld order of Ld. CIT(A) and allowed the deduction u/s. 80IC as also other claims of the respondent. iv) Being aggrieved, the revenue has preferred an appeal with the Hon'ble High Court and the same is admitted on the basis of question of low in Tax Appeal No. 145 of 2023 (copy attached at Page 3&4). The present Miscellaneous Application of revenue is not maintainable on the knowing grounds: 1.0 According to section 254(2) of the Income Tax Act, 1961 (hereinafter referred to as the Act\") time allowed for rectification of mistake is six months from the end of the month in which the order was passed. However, the present Miscellaneous Application has been filed after the prescribed statutory time limit, i.e., 6 months from the end of the month in which order sought to be rectified is passed. Hence, the application in question is time barred and legally invalid and should not be admitted. 2.0 As per grounds of MA by department, there is mistake at Para 10.1 of the order of Hon'ble ITAT. It is stated that Hon'ble Tribunal has relied upon the assessment order of the immediately preceding year and on that basis, as a rule of consistency, allowed the deduction. 2.1 However, as a matter of fact, Hon'ble ITAT has clearly given finding with respect to disputed issue in Para 10.2 to 10.4 of the said order. Further, Hon'ble ITAT has also considered decision of Ld. CIT(A) in detail at Para 5 of the order. Therefore, order of Hon'ble ITAT cannot be considered as erroneous and the same does not require any rectification. MA No.11 /RJT/2025 IA No.108/Rjt/2016) M/s Bhavani Industries) 5 3.0 It is also pertinent to consider that reference of order of Ld. CIT-2 passed u/s. 263 dated 19.01.2015 which has been referred itself is invalid order since it is not signed by the Ld. CIT-2. In this regard copies of show cause notice and order passed u/s. 263 are attached at Page 9 to 18). Since the order itself is invalid contention based on the same are also not maintainable. Reliance is placed on the decision of Hon'ble ITAT Cochin Bench, Cochin in ITA No. 125/Coch/2012 (copy attached at Page 19 to 25) 4.0 Revenue has filed the appeal with Hon'ble jurisdictional High Court which is admitted as Tax Appeal No. 145 of 2023, therefore in view of: a) Avoidance of Conflicting Decisions - If Miscellaneous Application is allowed while the same issue is pending before the High Court, it may lead to contradictory findings, causing confusion and legal complications. b) Supreme Court Precedents - Higher courts have consistently ruled that lower forums should not interfere in matters already taken up by a superior court; and c) Doctrine of Judicial Discipline” 6. We have heard both the parties, on this preliminary issue of condonation of delay. We find that the miscellaneous application filed by the revenue is barred by limitation by 21 Months and 21 days, (658 days approx.). The revenue did not file an application or petition for condonation of delay, requesting the Bench to condone such huge delay. The Tribunal does not have inherent power to condone the delay, without filing a petition for condonation of the day. We note that Tribunal has power to condone the delay in filing an appeal or cross objection as per provisions of section 253 of the Act, which reads as Follows: “5. The Appellate Tribunal may admit an appeal or permit the filing of a memorandum of cross objection after the expiry of the relevant period, referred to in sub -section(3) or sub-section(4), if it is satisfied that there was sufficient cause for not presenting it within that period” 7. From the above provisions of the Act, it is abundantly clear that Tribunal does not have power to condone the delay in case of miscellaneous application. The Tribunal can condone the delay in respect of Appeals and Cross objections. However, we find that the miscellaneous application of the revenue does not accompany by the petition of condonation of delay, therefore, the question to MA No.11 /RJT/2025 IA No.108/Rjt/2016) M/s Bhavani Industries) 6 condone such huge delay does not arise. The latin maxim,“Vigilantibus, non dormientibus, jura subveniunt”, has rightly stated that “Law is meant for the vigilant, and not for those who slumber and sleep”. This rule is designed to promote diligence on the part of suitors and discourage laches (unreasonable delay). When a party has slept-over his right, would not be benefited by the provisions of the Act. Based on these facts and circumstances, we dismiss the miscellaneous application filed by the revenue. 8. Since, we have dismissed the miscellaneous application of the revenue on the fact that revenue did not file the petition for condonation of delay and there is no provision in the Income tax Act to condone the delay of miscellaneous application, therefore we do not adjudicate this miscellaneous application, on merit. 9. In the result, the miscellaneous application of the Revenue is dismissed. Order is pronounced in the open court on 06/05/2025 Sd/- Sd/- (DINESH MOHAN SINHA) JUDICIAL MEMBER (DR.ARJUN LAL SAINI) ACCOUNTANT MEMBER राजकोट /Rajkot िदनांक/ Date: 06/05/2025 Dkp Outsourcing Sr.P.S MA No.11 /RJT/2025 IA No.108/Rjt/2016) M/s Bhavani Industries) 7 आदेश कì ÿितिलिप अúेिषत/ Copy of the order forwarded to :  अपीलाथê/ The Appellant  ÿÂयथê/ The Respondent  आयकर आयुĉ/ CIT  आयकर आयुĉ(अपील)/ The CIT(A)  िवभागीय ÿितिनिध, आयकर अपीलीय आिधकरण, राजकोट/ DR, ITAT, RAJKOT  गाडªफाईल/ Guard File // True Copy // By order/आदेश से , Tue copy/ /// Assistant Registrar/Sr. PS/PS ITAT, Rajkot "