Income Tax Appellate Tribunal - Indore
The Acit,, Khandwa vs M/S. Minakshi Cottex, Barwani on 7 June, 2023
आयकर अपील य अ धकरण, इंदौर यायपीठ, इंदौर
IN THE INCOME TAX APPELLATE TRIBUNAL
INDORE BENCH, INDORE
BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER
AND
SHRI B.M. BIYANI, ACCOUNTANT MEMBER
MA No.22/Ind/2020
(Arising out of I.T.A. No. 46/Ind/2017)
Assessment Year : 2006-07
DCIT बनाम/ M/s. Minakshi
Khandwa Cottex, Warla
Vs.
Road, Sendhwa,
Barwani
PAN No. : AAKFM 6462C
(Appellant) .. Respondent)
Revenue by : Shri Ashish Porwal Sr. D.R
Respondent by : Ms. Shreya Jain, AR.
Date of Hearing 02.06.2023
Date of Pronouncement 07.06.2023
ORDER
Per Vijay Pal Rao, JM:
By way of this Misc. Application the revenue is seeking rectification of mistake in the order dated 21.08.2019 of this Tribunal on the ground that the Tribunal has dismissed the appeal of the revenue due to low tax effect however, this case falls in the exceptions provided in para 10(c) of CBDT Circular No.23 of 2019 dated 06.09.2019 being the revenue audit objection which has been accepted by the department.
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2. Since the Misc. Application was filed on 22nd June 2020 which is beyond the period of limitation provided u/s 254(2) of the Act, therefore, the AO was asked to explain the maintainability of the present Misc. Application. In response the Ld. DR has filed the affidavit of the AO wherein the AO has explained the delay in filing the Misc. Application due to administrative reasons to decide whether the department should go to the High Court or to file Misc. Application.
3. Ld. DR has further submitted that since the case falls in the exception provided in para 10(c) of CBDT circular No.23 of 2019 therefore, there is a mistake apparent from the impugned order of the Tribunal dismissing the appeal of the revenue on the ground of low tax effect but without considering the exceptions.
4. On the other hand, Ld. AR has submitted that since there is a delay in filing the Misc. Application and there is no provision of condonation of delay as per section 254(2) of the Act therefore, the present Misc. Application is not maintainable and liable to be dismissed. She has relied upon the decision of the Coordinate Bench of this Tribunal in case of DCIT vs. Smt. Renudevi Nachani 41 TTJ 470.
5. We have considered the rival submission as well as relevant material on record. There is no dispute that the present Misc. Application has been filed by the department after the expiry of limitation period prescribed u/s 254(2) of the Act. The AO in affidavit has made the statement as under:
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6. Thus, it is clear that the AO has admitted this fact that limitation for filing the Misc. Application expired on 28.02.2020 whereas the present Misc. Application was filed on 22nd June 2020 and consequently there is a delay of three month 22 days. We are conscious about the judgment of Hon'ble Supreme Court in case of Suo-moto Cognizance of extending the Limitation reported in 441 ITR 722 (SC). However, the benefit of the judgment of the Supreme Court is available only when the limitation expired on or after 15.03.2020 till 30.05.2022. In the case in hand the MA No.22/Ind/2020 Minakshi Cottex 4- limitation was already expired on 28.02.2020 and therefore the benefit of the judgment of Hon'ble Supreme Court extending the limitation would not be available to the department. Once the Misc. application is filed belatedly then the question of maintainability of the Misc. Application arises as there is no provision of condonation of delay in filing the Misc. application. The limitation for filing the Misc. Application is provided in the Income Tax Act itself, therefore, the provision of general statute i.e. limitation Act are not applicable.
7. The coordinate Bench of this Tribunal in case of DCIT vs. Smt. Renudevi Nachani (supra) has dealt with this issue in para 5 to 7 as under:
5. We have heard rival submissions of both the parties. Ld. counsel for the assessee has taken an objection regarding limitation it is stated that the present Misc. Application is barred by time as the order sought to be rectified was passed on 21st August 2019 and the same was received on 30.12.2019. The present Misc.
Application is filed on 5th July 2020. Ld. counsel for the assessee submitted that the Misc. Application is filed beyond six month from the end of the month in which the order was pronounced. He Smt. Renudevi Nachani M.A.No.27/Ind/2020 contended that there is no provision of condonation of delay in filing Misc. Application. Ld. counsel for the assessee has placed reliance on the decision of the Coordinate Bench of this Tribunal rendered in Misc. Application 67/PUN/2018 in the case of DCIT vs. Veena Industries Ltd. The Tribunal has held as under:
8. It is a trite law that Tribunal has no jurisdiction to condone delay in filing of Miscellaneous Application u/s. 254(2) of the Act. In this context it would be relevant to mention the decision of Hon'ble Punjab & Haryana High Court in the case of Raja Malwinder Singh Vs. Union of India & Anr. reported as 278 ITR 568 and the decision of Delhi Bench of Tribunal in the MA No. 67/PUN/2018, A.Y. 2010- 11 case of Rahul Jee & Co. (P) Ltd. Vs. Assistant Commissioner of Income Tax reported as 120 ITD
481. Similar view has been taken by the Co-ordinate Bench of Tribunal in the case of Shri Kasturilal Sardarilal Luthra Vs. Dy. Commissioner of Income Tax in MA No. 38/PUN/2017 arising out of ITA No. 923/PUN/2011 for assessment year 2003-04 decided on 04-04-2018. Thus, in view of the facts and the case laws discussed above, the Miscellaneous Application filed by the Revenue is dismissed in limine, being barred by limitation.
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6. Reliance is also placed on the decision of Co-ordinate Bench in the case of Rahul Jee & Co. (P.) Ltd. vs. ACIT 120 ITD 481, the relevant contents are reproduced as under:
"10. Now let us examine whether the delay in filing application seeking rectification can be condoned under the provisions of the Limitation Act, 1963. Section 5 of the Limitation Act provides for the extension of the prescribed period in case of any appeal or any application other than an application under any of the provisions of order XXI of the Code of Civil Procedure, 1908 if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period. It is a settled law that the word "Court in section 5 of the limitation Act signifies a "Court" in strict sense. In Sakuru v. Tanaji AIR 1985 Hon'ble Supreme Smt. Renudevi Nachani M.A.No.27/Ind/2020 Court 1279, it is held that the provision of the Limitation Act 1963 apply only to proceedings in "Courts and not to appeal or applications before bodies other than courts such as quasi-
judicial Tribunals or executive authorities notwithstanding the facts such bodies or authorities may be vested with certain specified powers conferred on courts under the Code of Civil Procedure. In Sukhdeo v. State of UP AIR 1992 All. Acquisition Act before Collector are not proceedings in "courts" and hence the provisions of section 5 of Limitation Act do not apply. Therefore the provisions of section 5 of Limitation Act cannot be applied to the order passed by the Tribunal, a quasi-judicial authority.
11. Ld. AR of the assessee has placed reliance on several decisions referred to above in support of his contention that delay in filing of application for rectification dated 15.10.2006 should be condoned. We have gone through the ratios of the decisions referred by the Ld. AR of the assessee carefully. It is not clear under what context these decisions were rendered. It is also not clear whether relevant statute under which the said decisions were rendered contained provisions relating to limitation or were governed by the provision of the Limitation Act 1963. No such information has been provided in this regard by the Ld. counsel of the assessee. Moreover as pointed out by the Ld. Sr. DR that the ratio of a decision cannot be applied without reference to the context under which the same was rendered. We are inclined to agree with her in this regard. Hon'ble Supreme Court in the case of Sun Engineering Works(P.) Ltd. (supra) at page 320 observed as under:
It is neither desirable nor permissible to pick out a word or a sentence from the judgment of this Court, divorced from the context of the question under consideration and treat it to be the complete MA No.22/Ind/2020 Minakshi Cottex 6- 'law' declared by this Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before this Court. A decision of this Court takes its colour from the questions involved in the case in which it is rendered and while applying the decision to a later case, the courts must carefully try to ascertain the true principle laid down by the decision of this Court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by this Court, to support their reasonings. In Madhav Rao Jiwaji Rao Scindia Bahadur and Ors. v. Union of India this Court cautioned:
Smt. Renudevi Nachani M.A.No.27/Ind/2020 It is not proper to regard a word, a clause or a sentence occurring in a judgment of the Supreme Court, divorced from its context, as containing a full exposition of the law on a question when the question did not even fall to be answered in that judgment.
The Ld. AR of the assessee has not referred to the questions while citing the ratios of various decision which were answered by the Hon'ble Courts. The ld. AR of the assessee has not also demonstrated as to how the decisions relied upon by him were relevant in the context of condonation of delay particularly when there is no provision under section 254(2) of the Act empowering the Tribunal to condone the delay.
12. We may also like to discuss the circumstances under which the decision in the case of Mrt. Katiji (supra) relied upon by the assessee was rendered. In this case the appeal was preferred by the State of Jammu & Kashmir before the Hon'ble Jammu & Kashmir High Court. The appeal was dismissed rejecting an application of condonation of delay as time barred being four days beyong time. Hon'ble Supreme Court condoned the delay on the ground that when substantial justice and technical considerations were pitted against each other, the cause of substantial justice deserved to be preferred. Hon'ble Supreme Court condoned the delay and remitted the matter to the High Court to dispose of the appeal on merits. In this case section 5 of Limitation Act was held to be applicable as the matter related to the appeal before Hon'ble J&K High Court. The matter before us does not relate to an appeal where Tribunal is empowered to condone the delay under section 253(5) of the Act. Thus, the decision in the case of Mst. Katiji (supra) relied upon by the assessee is not relevant to miscellaneous application seeking condonation of delay as this Tribunal has no power to condone the delay under section 254(2) of the Act. other decisions relied upon by the Ld. AR of the assessee referred to above are not relevant to all as the facts of the case and the context in which they have been rendered are not known. Accordingly, in MA No.22/Ind/2020 Minakshi Cottex 7-
view of the decision of the Hon'ble Supreme Court in the case of Sun Engg. Works (P.) Ltd. (supra) the ratios of various decisions cannot be applied to condone the delay.
13. Another contention of the Ld. AR of the assessee that the present application for rectification has been filed immediately after the decision of the I.T.A.T. on second rectification application is not relevant. The period of four years has to be considered from the date of original order i.e. 17.9.1990 and not from the date on which second application for rectification was decided. Finality of a proceeding is an important feature to be observed while deciding the Smt. Renudevi Nachani M.A.No.27/Ind/2020 matter. Orders passed under section 254(1) are final subject to provisions of section 256 of the Act. Before omission of section 256 by the National Tax Tribunal Act, 2005 with effect from 28.12.2005, a referred on question of law was to be made by the Tribunal. In the instant case the reference application was rejected by the Tribunal vide order dated 14.4.1994. There is nothing on record to suggest that a reference application was made by the assessee before High Court under section 256(2) of the Act. Therefore, the order passed by the Tribunal on 17.9.1990 has become final. The contention of the assessee that for mistakes committed by the Tribunal no time limit for rectification of mistake is necessary and the Tribunal can suo motu rectify the mistake. We are unable to agree with the proposition made by the Ld. AR of the assessee on single ground that section 254(2) does not provide for any condonation of delay. Fi the contention of the assessee is accepted it will open flood gates for litigation upsetting the settled principle of finality of assessment proceedings. The Ld. AR of the assessee has also contended that the assessee cannot be made to suffer from the wrong committed by the Tribunal by deciding the rectification application after expiry of 14 years. We are unable to agree with the submission made by thim. No doubt the application for rectification was made by the assessee on 28.7.1992 within the period of four year. The rectification application has been decided by the Tribunal on merits vide order dated 24.2.2006 after discussing of all the four issues. Therefore, the assessee cannot have any grievance against delayed decision on miscellaneous Application seeking rectification of mistake apparent from records. If the assessee was not satisfied with outcome of miscellaneous application he could have gone to Hon'ble High court seeking the remedy. Settled issued cannot be upset by moving rectification that too after expiry of period of 16 years.
14. Income Tax Appellate Tribunal Ahmedabad Bench C [Special Bench] (judgment rendered by the five member Bench) in the case of Arvindbhai H. shah (supra) held that no rectification can be made after the period of four years on the principle of equity and MA No.22/Ind/2020 Minakshi Cottex 8- justice or on the basis of theory that justice should be done. The time limit of four years to make rectification under section 254(2) applies to both suo motu action of the Tribunal as well as to action taken on request of the parties. Since in this case the miscellaneous application seeking the rectification of order passed by the Tribunal under section 254(1) has been filed after the expiry of a period of sixteen years and since there is no provision under the Income Tax Act and the provisions of section 5 of the Limitation Act are not application to Smt. Renudevi Nachani M.A.No.27/Ind/2020 proceedings before quasi-judicial authorities like I.T.A.T., condonation of delay cannot be allowed. Therefore, the miscellaneous application filed by the assessee is dismissed as barred by limitation.
7. The revenue has not brought to our notice any judgment by the Hon'ble High Court or the Hon'ble Supreme Court wherein it has been ruled that the Tribunal can condone delay in the case of Misc. Application filed u/s 254(2) of the Act. Therefore, respectfully following the decision of the Coordinate Bench the Misc. Application filed by the revenue is dismissed being barred by limitation.
8. Thus, the Misc. Application filed beyond the limitation is not maintainable being barred by limitation. We also fortify our view by the judgment of Hon'ble Bombay High Court in case of BPCL vs. ITAT, 359 ITR 371 wherein an identical issue has been considered in para 17 to 20 as under:
"17) the facts of the present case there can be no denial that the order dated 6 December 2007 suffers from an error apparent from the record. The error is in having ignored the mandate of Rule 24 of the Tribunal Rules which required the Tribunal to dispose of the matter on merits after hearing the respondents. In these circumstances, an application for rectification would lie under Section 254(2) of the Act. The recall of an order would well be a consequence of rectifying an order under Section 254(2) of the Act. In these circumstances, we find no reason to interfere with the order of the Tribunal holding that Miscellaneous Application filed by the appellant is barred by limitation under Section 254(2) of the Act as it was filed beyond a period of four years from the order sought to be rectified.
18) Before concluding, we would like to make it clear that an order passed in breach of Rule 24 of the Tribunal Rules, is an irregular order and not a void order. However, even if it is assumed that the order in breach of Rule 24 of the Tribunal Rules is an void order, yet the same would continue to be binding till it is set aside by a MA No.22/Ind/2020 Minakshi Cottex 9-
competent Tribunal. In fact, the Apex Court in the Sultan Sadik v/s. Sanjay Raj Subba reported in 2004(2) SCC 277 has observed as under:-
ASN 24/25 WP-1740-13.doc " Patent and latent invalidity In a well-known passage Lord Radcliffe said : " An order, even if not made in good faith, is still an act capable of legal consequences. It bears no brand of invalidity upon its forehead. Unless the necessary proceedings are taken at law to establish the cause of invalidity and to get it quashed or otherwise upset, it will remain as effective for its ostensible purpose as the most impeccable of orders."
This must be equally true even where the brand of invalidity is plainly visible, for there also the order can effectively be resisted in law only by obtaining a decision of Court."
Further the Supreme Court in Sneh Gupta v/s. Dev Sarup (2009) 6 SCC 194 has observed " We are concerned herein with the question of limitation. The compromise decree, as indicated herein before, even if void was required to be set aside. A consent decree as is well known, is as good as a contested decree. Such a decree must be set aside if it has been passed in violation of law. For the said purpose, the provisions contained in Limitation Act 1963 would be applicable. It is not the law that where the decree is void, no period of limitation shall be attracted at all."
Therefore, in this case also the period of four years from the date of order sought to be rectified/recalled will apply as provided in Section 254(2) of the Act. This is so even if it is assumed that the order dated 6 December 2006 is a void order.
19) We shall now answer the questions arising in this case as raised by us in Paragraph 4 above as under:-
ASN 25/25 WP-1740-13.doc Question(a) No. The Tribunal has no power in terms of Rule 24 of the Tribunal Rules to dismiss an appeal before it for non prosecution.
Question(b): The Miscellaneous application for recall of an order falls under Section 254(2) of the Act and not under Section 254(1) of the Act.
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Question(c): Does not arise in view of our response to query
(b) above.
20) In view of the reasons given herein above, we find the Tribunal was correct in dismissing the Miscellaneous Application by its order dated 10 April 2013 as being beyond the period of four years as provided under Section 254(2) of the Act."
9. Accordingly in the facts and circumstances as well as in view of the proposition of law laid down by binding precedence, we hold that the Misc. Application filed by the revenue is not maintainable being barred by limitation and the same is liable to be dismissed. We order accordingly.
10. In the result, Misc. appeal filed by the Revenue is dismissed.
Order pronounced in Open Court on 07/ 06 /2023
Sd/- Sd/-
(B.M. BIYANI ) (VIJAY PAL RAO)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Indore. Dated 07/06 /2023
Patel. Sr. PS
आदे श क त ल प अ े षत / Copy of Order Forwarded to:-
1. राज व / Revenue
2. आवेदक / Assessee
3. संबं धत आयकर आयु"त / Concerned CIT
4. आयकर आय"
ु त- अपील / CIT (A)
5. &वभागीय )*त*न ध, आयकर अपील य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड1 फाइल / Guard file.
By order/आदे श से, Sr. Pri vat e Secret ar y I.T.A.T., In dor e