Income Tax Appellate Tribunal - Amritsar
Estate Of Sh. Jagir Singh Bhullar, ... vs The Income Tax Officer, Tarn Taran on 7 September, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH, AMRITSAR
BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND
SH. N.K.CHOUDHRY, JUDICIAL MEMBER
M.A No.06(Asr)/2018
(Arising out of ITA No.306(Asr)/2014)
Assessment Year:2007-08
Estate of Sh. Jagir Singh Vs. Income Tax Officer,
Bhullar, through Sh. Jasbir Ward-1(3), Tarn Taran
Singh Bhuular,
E-250 Ranjit Avenue, Amritsa
PAN:AFVPH 1546N
(Appellant) (Respondent)
Appellant by: Sh. Padam Bhal (Ld. CA)
Respondent by: Sh. Charan Dass (Ld. DR)
Date of hearing: 13.07.2018
Date of pronouncement: 07.09.2018
ORDER
PER N.K.CHOUDHRY, JM:
This order shall dispose of the Misc. Application filed by the assessee, on feeling aggrieved against the order dated 16.03.2015 passed by the Co-ordinate Bench at Amritsar, in ITA No.306(Asr)/2014, whereby, the appeal of the assessee was dismissed in limine.
2. The brief facts of the care are that the assessee has preferred the appeal vide ITA No.306(Asr)/2014, on feeling aggrieved against the order dated 20.11.2012 passed by the ld. CIT(A), Amritsar, which came up for hearing on 16th March, 2015, on which date, it was observed by the Co-ordinate Bench at Amritsar that the assessee has filed the present appeal on 08.05.2014 and the Registry has pointed out the following defect " (i) Appeal is time barred by 460 days" in the present appeal 2 M.A.No.06/Asr/2018 (A.Y.2007-08) Estate of Sh. Jagir Singh Bhullar, Amritsar v. ITO and communicated the same to the assessee vide defect memo dated 08.05.2014, but the assesse has not rectified the same till date. The Co-ordinate Bench finally dismissed the appeal of the assessee in limine being defective, however liberty was granted to the assessee to approach the Tribunal for recalling of the said order after rectifying the defect raised by the Registry for adjudicating the appeal in accordance with law. The assessee sought rectification of the aforesaid order vide application dated 13.12.2017 which was registered by the Registry on 19.12.2017 which is under consideration. The controversy has cropped up qua maintainability of the application itself.
3. The ld. DR at the outset, submitted that according to limitation imposed u/s 254(2) of the Act, amendment came into effect from 1st June, 2016 and the period of for making of rectification of mistake in order, has been reduced from four years to six months, therefore, after the amendment of the provision stated above, the limitation period for rectification of mistake apparent from the record is only six months as the amendments stipulates : The Appellate Tribunal may, at any time within six months from the end of the month in which the order was passed, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the Assessing Officer:
Further it was argued by the Ld. DR that in the instant case, the application for rectification was filed on 19.12.2017 which is undisputedly after first June, 2016, hence, the limitation of six months shall apply, therefore, cannot be entertained and liable to be dismissed at the limine stage itself. Even otherwise, there is no such law applicable to the instant case, where the limitation 3 M.A.No.06/Asr/2018 (A.Y.2007-08) Estate of Sh. Jagir Singh Bhullar, Amritsar v. ITO can be extended further either on the application of the parties or suo moto by the Court.
The ld. DR also relied upon the order dated 31-03-2017, passed by the ITAT, 'A' Bench at Bangalore in the case of Ms. Shamsunissa Begum v. DCIT, [M.P. No.8 to 11(Ban)/2017 and submitted that the Co-ordinate Bench at Bangalore dealt with the identical and similar issue and while relying upon the order passed by the Hon'ble Bombay High Court in the case of Bharat Petroleum Corporation Ltd. v. ITAT and Ors. 359 ITR 371 dismissed the similar petition, therefore, the instant application of the assessee is also liable to be dismissed on account of limitation.
4. On the other hand, the ld. AR Sh. Padam Bahl vehemently argued that the order was passed on 16.03.2015 and up to that the limitation for filing an application for rectification of the defect in the order was four years and the time limit for filing application/appeal or any other petition is substantiative right and that cannot be curtailed by making any amendment until and unless there must be specification that amendment shall apply retrospectively, but not otherwise. In the instant case, the limitation of 04 years is applicable and therefore, the application is maintainable.
The Ld AR also relied upon the following judgments (1) Bhilai Engineering Corporation Ltd. vs. DCIT, [2002] 81 ITD 0282 (2) Lucent Technologies GRL LLC vs. ADIT (International Taxation) [2017] 51 CCH 0224 (Mum Trib.) 4 M.A.No.06/Asr/2018 (A.Y.2007-08) Estate of Sh. Jagir Singh Bhullar, Amritsar v. ITO (3) District Central Co-op. Bank Ltd., Raisen vs. Union of India [Writ Petition No.4144/2017] (MP High Court) (4) Gifford & Partners Ltd. vs. ADI-1(1), Kolkata [M.A. No.39/Kol/2017] (ITAT, Kol.) (5) CIT vs. Vegetable Products Ltd. [1973] 88 ITR 0192 (SC)
5. Having heard the parties at length and perused the material on record. Legal issue raised in the instant case, relates to maintainability of application itself as to whether limitation period as prescribed prior amendment of Finance Act 2016 or post amendment shall be applicable. Let us to peruse the order passed by the ITAT 'A' Bench at Bangalore in the case of Ms. Shamsunissa Begum v. DCIT (supra) whereby it was held by the Court:
"We have no doubt in our mind that there is apparent mistake in the order dated 07.04.2016 as the Tribunal has not decided the appeals of the assesee on merit but dismissed the same in limine for want of prosecution. However, the question of rectification of mistake cannot be entertained until and unless, the Misc. Petition filed by the assessee is found to be maintainable. The Misc. Petition filed by the assessee are beyond the period of six months from 01.06. 2016 and therefore, the same are barred by limitation. In the absence of any provision to condone the delay under the Income Tax Act, it may be a case of omission in the provision of Act which cannot be supplied by us when there is no ambiguity in the provisions of Sec.254(2) of the Act. The Hon'ble Bombay High Court in the case of Bharat Petroleum Corporation Ltd. v. ITAT and Ors. 359 ITR 371, dealt with an identical issue and has held in para No.16 to 18.
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Estate of Sh. Jagir Singh Bhullar, Amritsar v. ITO In view of the facts and circumstances of the case as well as the decision of the Hon'ble Bombay High Court in the case of Bharat Petroleum Corporation Ltd. v. ITAT AND OTHERS (supra), we hold that the miscellaneous Petition filed by the assessee are beyond the period of limitation as provided under section 254(2) and are not maintainable. Accordingly, the same are dismissed being barred by limitation.
6. At this juncture, we feel it appropriate to reproduce the relevant provision prior and post amendment of section 254(2) by Finance Act 2016.
Section 254(2) of the Act of 1961 prior to the amendment reads as under:-
"254(2) The Appellate Tribunal may, at any time within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the Assessing Officer:
Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub-section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard [Provided further that any application filed by the assessee in this sub-section on or after the 1st day of October, 1998, shall be accompanied by a fee of fifty rupees.]"
Section 254(2) of the Act of 1961 after amendment reads as under:-
"254(2) The Appellate Tribunal may, at any time within six months from the end of the month in which the order was passed, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1), and shall make such 6 M.A.No.06/Asr/2018 (A.Y.2007-08) Estate of Sh. Jagir Singh Bhullar, Amritsar v. ITO amendment if the mistake is brought to its notice by the assessee or the Assessing Officer:
Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub-section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard [Provided further that any application filed by the assessee in this sub-section on or after the 1st day of October, 1998, shall be accompanied by a fee of fifty rupees.]"
From the provisions, it clearly reflects that prior to 1st June, 2016 the time limit for filing an application for rectification u/s 254(2) was 04 years , however, the same was substituted to 06 months by amendment vide Finance Act 2016, which came into effect from 1st June, 2016. In the instant case, no doubt, the order was passed on 16th March, 2015 and the application for rectification was filed only on 19th Dec., 2017 that was much later than the 1st June, 2016, therefore, the controversy has cropped up as to whether the limitation period prescribed post amendment shall apply to the instant Miscellaneous Application or not.
7. The Apex Court in the case of K. Ravendra Nathan Nair v. CIT, in Civil Appeal No. 3131 of 2006 clearly held that " right to appeal being a substantive right gets crystallized at the time of passing the original order unless the same is taken away by retrospective amendment" .
According to the dictum of the Apex Court, right to appeal is vested in the litigant at the commencement of the lis and therefore, such vested right cannot be taken away and cannot be 7 M.A.No.06/Asr/2018 (A.Y.2007-08) Estate of Sh. Jagir Singh Bhullar, Amritsar v. ITO impaired or made more stringent by subsequent legislation unless the subsequent legislation said so either expressly or by necessary intendment. An intention to interfere or impair a vested right cannot be presumed unless such intention be clearly manifested by the expressed words or by necessary implication.
8. Further, the Hon'ble High Court of Madhya Pradesh in the case of District Central Co-operative Bank Ltd., Raisen, v. Union of India [Writ Petition No.4144/2017, decided on 9th October, 2017] dealt with the identical and similar issue and while relying upon the decision rendered by the Apex Court in the case of M.P. Steel Corporation v. Commissioner of Central Excise, {reported in [2015] 07 SCC 58} , decided the issue that the new law of limitation providing a shorter period cannot certainly extinguish a vested right of action.
9. The ITAT Kolkata Bench at Kolkata in the case of Gifford & Partners Ltd. v. Addl. Director of Income Tax (International Taxation) in MA No.39(Kol)/ 2017, vide its order dated 2nd Feb. 2018 and the ITAT Bench at Mumbai in the case of Lucent Technologies GRL LLC v. Addl. Direction of Income Tax (International Taxation), in MA NO. 411/Mum/2016 to 414/Mum/ 2016 (arising out of ITA No.7001/Mum/2010 decided on 9th Oct., 2017 ) also dealt with similar and identical issue and while relying upon the ratio laid down by the Hon'ble Apex Court and High Courts decided that the application can be filed within four years, if the order which sought to be rectified has been passed before the 1st June, 2016.
10. While coming to the case of Ms. Shamsunissa Begum v. DCIT (supra) as relied upon by the Ld. DR, we are of the considered view that once it is clearly held by the Apex Court 8 M.A.No.06/Asr/2018 (A.Y.2007-08) Estate of Sh. Jagir Singh Bhullar, Amritsar v. ITO that the right to appeal being a substantive right gets crystallized at the time of passing of the original order until or unless the same is taken away by retrospective amendment by clear manifestation, either by express word or by necessary implication, the right to appeal being a substantive right cannot be taken away. Even Apex Court in the case of CIT v. Vegetable Products Ltd. [1973] 88 ITR 0192, clearly held that " if two reasonable constructions of a taxing provision are possible that construction which favours the assessee must be adopted. This is a well 'accepted rule of construction recognized by this Court in several of its decisions.
Further it was held by Apex court " If we find that language to be ambiguous or capable of more meanings than one, then we have to adopt that interpretation which favours the assessee" . In view of the dictum of Apex Court, we have to see whether interpretation can be possible of Sec. 254(2), as we realized that there is an omission in the section with regard to the rectification of the orders passed prior to amendment which came into effect from 1st June, 2016 by Finance Act 2016. Even we observe that in the amendment, it is not clarified that the amendment shall be made applicable retrospectively or prospectively, however, it can be construed that the order passed after 1st June, 2016 can be rectified at any time within six months from the end of the month in which the order was passed. From the conclusion drawn by the Hon'ble Apex Court, the High Court and the Co-ordinate Benches, it trite to say that post amendment provision shall only be applicable to the order passed on or after 1st June, 2016 onwards, but not otherwise. An order passed prior to the 1st June, 2016 can be subjected to challenge for rectification up to 4 years from the date of the order.
9 M.A.No.06/Asr/2018 (A.Y.2007-08)Estate of Sh. Jagir Singh Bhullar, Amritsar v. ITO While coming to the instant case, it is undisputed fact that the order has been passed on 16th March, 2015, which was prior to the date of amendment and the application for rectification was filed on 19th December, 2017, which undisputedly is within 4 years from the date of the order. Hence, we do not have any hesitation to hold that the same is within the limitation period and thus, maintainable in the eyes of law.
5. Now coming to the merits of application, the liberty was granted to the Asseeee to approach the Tribunal for recalling of the said order after rectifying the defect raised by the Registry for adjudicating the appeal in accordance with law. We therefore direct the assessee to rectify the defect raised by the registry within 01 month of this order which will be within the limitation period of four years, as held by us. We clarify that this order shall be subjected to the rectification of defect by the Asseeee within stipulated time.
6. In the result, the Miscellaneous Application filed by the assessee is allowed. Registry is directed to list the appeal for hearing, after rectification of defect by Assessee, by issuing notice to the parties.
Order pronounced in the open Court on 07.09.2018.
Sd/- Sd/-
(SANJAY ARORA) (N.K.CHOUDHRY)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated:07.09.2018
/PK/ Ps.
Copy of the order forwarded to:
(1) Estate of Sh. Jagir Singh Bhullar, through Sh. Jasbir Singh Bhuular, E-250 Ranjit Avenue, Amritsa (2) The ITO, Ward 1(3), Tarn Taran (3) The CIT(A), Amritsar 10 M.A.No.06/Asr/2018 (A.Y.2007-08) Estate of Sh. Jagir Singh Bhullar, Amritsar v. ITO (4) The CIT, concerned (5) The SR DR, I.T.A.T., Amritsar True copy By order