Income Tax Appellate Tribunal - Jodhpur
M/S. Sudiva Spinners Private Limited,, ... vs Acit, Circle, Bhilwara on 18 January, 2024
IN THE INCOME TAX APPELLATE TRIBUNAL
JODHPUR BENCH, "DB", JODHPUR
Before Sh. Saktijit Dey, Vice President
Dr. B. R. R. Kumar, Accountant Member
ITA No.95/Jodh/2023 : Asstt. Year: 2012-13
Sudiva Spinners Private Limited, Vs ACIT,
91, KM Stone NH-79, Circle Bhilwara,
P.O. Sareri, Village Dhanuwalia, Rajasthan-311001
Bhilwara, Rajasthan-311024
(APPELLANT) (RESPONDENT)
PAN No. AAKCS5788C
Assessee by : Sh. S. S. Nagar, CA
Revenue by : Ms. Nidhi Nair, Sr. DR
Date of Hearing: 26.12.2023 Date of Pronouncement: 18.01.2024
ORDER
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been filed by assessee against the order of ld. CIT(A), National Faceless Appeal Centre, Delhi, dated 02.02.2023.
2. Following grounds have been raised by the assessee:
"1.0 That on the facts and in the circumstances of the case, the disallowance, imposition of tax and interest with reference thereto, the quantification of taxable income and the tax liability, has been grossly unjus tified, erroneous and unsustainable and nec essary direc tion be given to the AO to give appropriate relief in accordance with law .
2.0 That on the facts and in the circumstances of the case, the Ld. CIT-(A) was not justified and grossly erred in his order for not quantifying the MAT credit amounting Rs.2,45,646/-.2 ITA No.95/Jodh/2023
Sudiva Spinners Private Limited 3.0 That on the facts and in the circumstances of the case, the Ld. CIT-(A) was not justified and grossly erred in sustaining the order of Ld. AO w ithout considering the fact that the issues raised are within the purview of powers of rectification u/s 154 of the Act.
3.1 That on the facts and in the circumstances of the case, the Ld. CIT-(A) ought to consider that as per propo sition la id down by Hon'ble Apex Court abo ut the nature of subsidy, the claim of the appellant that TUF subsidy is capital rece ipt and not chargeable to tax is as per law and fall within the ambit of section 154 of the Act.
3.2 That on the facts and in the circumstances of the case, the Ld. CIT-(A) ought to consider that as per propo sition laid down by Hon'ble Apex Cour t and Hon'ble Jurisdictional High Court about the nature of subsidy, the claim of the appe llant that subsidy under RIPS is capita l receipt and not chargeable to tax is as per law and fall within the ambit of sec tion 154 of the Act."
Non-quantification of MAT Credit:
3. It was submitted before us that rectification application u/s 154 of the Act was filed which has been dispo sed off w ithout considering appellant's submission. The AO is dire cted to modify the order accordingly.
Interest Sub sidy - (TUFS):
4. Interest Subsidy received under Technology Upgradation Fund Scheme (TUFS) and Electricity duty subsidy under Rajas than Investment Promotion Sche me (RIPS) has been treated as revenue receipt by the AO as well as the ld. CIT(A).
3 ITA No.95/Jodh/2023Sudiva Spinners Private Limited
5. The appeal has been filed against non-carrying out of rectification u/s 154 of the Income Tax Act, 1961 as sought by the assessee. The order of the Assessing Officer rejecting the plea of the assessee is as under:
"To Th e Ex e c u ti v e D i r ec to r , M/ s S ud i v a S pin n e r s P v t . Lt d .
1 -F -3 3 . Old Hou sin g B oa r d , Sh a st ri Na g a r , Bh i l w a ra Si r / M ad am , Su b : Y ou r a p pl i ca t i on d a t ed 2 3 .0 5 .2 01 7 u/ s.1 5 4 o f t h e I n c om e T a x Ac t , 1 96 1 fo r t h e A Y 2 01 2 -1 3 - R ega rdi ng -
Pl ea s e r e f e r t o t h e s u bj e c t c it ed a b o v e .
In y ou r ap pl i cat i on , yo u h a v e r a i s ed t h e is su e of el i gib i lit y o f ta x c r e di t u / s 1 15 JA A h a s n ot qu a n ti fi ed i n t h e a ss e ss m ent o r d er . Th e sa id i s su e h a s be en r ai s ed a ft e r a pe ri o d of fi v e y e a r s w h ich h a s n o r e l e va n ce a t th i s j un ct u r e . Th e i ssu e h a s b e en ra i s ed ju st f o r th e s a k e o f ra i s in g a n i s su e .
F urt h e r , y ou have a ls o r a i s ed th e is s u e of claim of i n t e r e st su b s i dy r e c eiv e d u n d e r TU F S ch e m e a n d c la i m of El ec tr i ci ty D u ty E x em pt i on & In t e r es t su b sid y a s c a pi ta l r ec e ip t u nd e r R a j a s th a n In v e st m en t P r om ot io n Sc h e m e (R I PS ) . I n t hi s r ega r d, it i s st a t ed th a t th e i s s u e do e s n ot c o m e u nd e r th e p u rv i e w o f s e ct i on 15 4 of th e I n c om e Ta x A c t , 1 9 6 1 . On th e s ai d is s u e, r el i a n c e i s p l a c ed on th e ju d gm e nt o f Ho n ' bl e Su p r e me C ou rt in th e ca s e of M/ s M e p c o I n du s t ri e s Lt d . , Ma d ur a l V s. C I T & A n oth e r in th e ci vi l app ea l N o s. 7 6 62 - 7 66 3 o f 20 0 9 ( A ris i n g ou t a t S L P .( C) N o s . 9 9 7 9 -9 9 80 o f 2 00 8 ) . In t hi s ca s e i t h a s b e en h el d t h a t a ' r e c ti fi a bl e m is ta ke i s a mi st ak e w hi c h i s o bv i o u s a n d not s o m e th in g wh i ch h a s t o b e es t a b l i sh ed by a l on g dr a wn p r oc e s s o f r e a s on in g o r w h er e t w o op in i on s a r e p oss i b le D e ci s i on on deb ata bl e p oi nt o f la w ca n 't b e t r e a t ed a s " m i st a k e a p pa r en t f r o m th e r e c or d" .4 ITA No.95/Jodh/2023
Sudiva Spinners Private Limited In vi e w o f t h e ab ov e fa c t s , y ou a p p l i ca t ion i s n ot m a in t a i n a bl e. Th e s am e is t r ea t ed a s di s p o s ed of f ."
Y ou r s fai th fu ll y , S d /-
( Um e s h Sin h a ) As s tt . C om m i s s i on er of I n c om e Ta x, C i rc l e, B h i lw a ra
6. Aggrieve d, the assessee filed appeal before the ld. CIT(A).
7. The ld. CIT(A) dismissed the appeal of the assessee holding that the issue s raised in grounds of a ppeal are not "mistake appa rent from the record" for rectification of mistake for the purposes of Section 154 of the Act. The ld. CIT(A) held that for the purpose of Section 154, a mistake is not some thing which has to be established by a long draw n process of reasoning or where two opinions are possible or which are debatable in nature or which are not obvious.
8. Before us, the ld. AR argued and submitted the arguments in wr itten form which are as under:
Gr. Cl a i m o f I nt e re st Su b si d y I ss u e f a l ls u / s 1 5 4 p ur v ie w N o. 3 re c e i v e d u nd e r Te c h no lo g y Up g r ad a ti o n I n co m e t a x a u th o rit y ca n a m en d a n y F u n d S c h e m e (T U FS ) a nd o rd e r , if t h er e is any m i st a k e El ec t r ic it y d ut y su b si d y a pp a r en t f r om r e c o rd. Now a un d er R a j a st h an qu e s ti on a r i s e s a s t o w h a t c on sti t u t e I nv es t m e nt P r om o t io n mi s ta k e a p p a r ent fr om r e c o r d. S c he m e ( R IP S) as c ap it a l W h et h e r , a S up r e m e c ou r t ju dg m en t re c e i p t w hil e c o m p ut i ng del iv e r ed a t a l a t e r p oin t of ti m e t h e T ot a l I nco m e. a ft e r pa s s in g of o rd e r ca n con s ti tu t e mi s ta k e a p p a r en t f r om r e c or d o r n ot .
B ri e f F ac ts
R el i a n c e i s pl a c ed o n C i r cu la r N o . 6 8
Th e a p p el l a n t r e c ei v ed da t ed 17 - 11 - 19 7 1 (K in dl y r e f er p a g e
I n t e r es t su b si d y u n de r T UF n o . 1 o f PB ).
5 ITA No.95/Jodh/2023
Sudiva Spinners Private Limited
s ch em e a m ou n ti n g to
R s .1 ,0 4 ,3 7 , 6 40 / - a nd M/ s BR Ag r ot e ch Lim it ed v s. AC IT
El e ct ri ci t y du t y su b sid y ( IT A N o . 62 4 4 t o 6 24 7 /D el/ 2 01 9 )
u nd e r R aja st ha n I n v est m en t ( Ki nd l y r e f er p a g e no . 2 t o 1 3 o f
Pr o m oti on S ch e m e ( R IP S) PB) . D C T T v s . M/ s K a sh m ir St e el
am oun ti ng R s .1 8 ,0 8 ,4 5 4/ - . R ol l in g M il l s ( I TA N o . 1 3 0 of 2 01 4 )
H on 'bl e I T A T A m ri t s a r ( K i nd l y r ef e r
Th e app el la nt w h i l e f i lin g pa g e n o . 1 4 t o 2 6 o f PB ).
th e r etu rn of i nc o m e
in clu d ed th e a f o r e sa id M/ s Nu lu x En gi n e e r s v s. D CI T ( IT A
sub si d i e s in it s t ot a l i nc o m e N o. 20 7 3 /Mu m/ 2 01 7 ) H on 'b l e I T A T
an d pai d t a x on t h e s a m e. Mu mb a i . (K in d ly r e f e r p a g e n o . 2 7 to
3 5 o f P B ).
Th e Ld . A O c o m pl et ed t h e
as s e ss m en t b y pa s s in g t h e Aft e r c on s id e rin g t h e a b o v e ci r cu la r
o rd e r u/ s 1 43 ( 3) o f th e A ct a n d ju di cia l p r on o u nc em en t s, it i s
da t ed 0 2 -0 6 - 2 0 1 4 . cl ea r th a t th e p et i t i on su b m it t e d b y
th e a p p el la n t fa ll s w it hi n th e s c op e
H ow e v e r, th e L d . A O fa i l e d o f s e ct i on 15 4 o f t h e A c t.
to ac k n owl e dg e t h e fa c t th a t
th e am ou n t o ff e r e d t o t a x TU F S s u b s id y ob j e cti v e G ra n t e d t o
by th e a p pe l la n t in c lu d ed im p r ov e t e c hn ol og y u pg r a da t i o n i n
c e rtai n i n c om e s in th e th e c on t ext to im p r o v e its
n atu r e of in t e r es t su b sid y c omp e ti ti v en es s a n d o v e ra ll l on g-
r e c eiv e d un d e r TUF s ch em e te rm v ia bil it y in case of
an d El e c t ri c it y su b sid y mo d er n iz a t i on / ex pa n si on of u n it s.
r e c eiv e d un d e r R I P sch e m e ( Ki nd l y r e f e r p a g e n o , 3 6 t o 4 0 of
w hi ch w e r e t o b e t r ea t ed a s PB) .
ca p i tal r ec e i pt s on th e b a si s
of v a r i ou s ju di c ia l R I P S su b s id y ob j e c ti v e Gi v en fo r
pr on ou n c em en ts . gen e ra t i on of e m p l o ym en t , s ett in g
u p n e w un it &/ o r f or e xp a ns i o n o f
Af o r es ai d m i s ta k e a p pa r en t ( Ki nd l y r e f e r p a g e n o . 4 1 t o 4 7 of
f ro m r ec o rd , t h e A R o f th e PB) .
app ell a n t fi l ed an
app li ca ti on u / s 1 5 4 o f t h e Ap p el l a n t ' s ow n ca s e . ( I TA N o . 65 &
Ac t b e fo r e t h e L d. A O on 2 6- 6 6/ J odh / 2 0 1 8 ) . ( Ki n dly r e f e r p ag e
0 7- 20 1 6 a nd 2 3 - 0 5- 2 01 7 n o . 48 t o 6 8 o f P B ) .
s e eki ng to c on si de r the
cla i m of th e a f o r e sa id PC TT v s. M /s N it in S pin n e r s Li mit ed
sub si d i e s as c a p it a l in ( 11 6 t a x ma n n . c om 2 6 ) J u ri sdi c ti on
n atu r e. ( K in dl y r e f e r pa g e Hi gh c ou r t ( K in dl y r e f er p a g e n o . 6 9
n o . 74 t o 7 6 o f P B ) . to 7 1 of PB) . Fu rt he r y ou r H on ou r
w o u ld a p p r e ci a t e t he f a c t th a t S L P
Ab ru pt l y th e L d. A O p a ss e d fil ed a g a in s t t h e a f o r e sa id o r d er w a s
th e o rd e r u /s 1 5 4 o f th e A c t di s mi ss e d b y th e H on ' bl e S up r em e
on 16 - 11 -2 0 17 r ej e c ti ng th e c ou rt. (K in dl y r ef e r pa g e n o. 72 t o
6 ITA No.95/Jodh/2023
Sudiva Spinners Private Limited
app ell a n t 's a p pl ic a ti on 7 3 o f P B ) . O r d er o f H on ' b l e Mu mb a i
stat in g t h a t t h e c a s e d o e s I TA T i n t h e c a s e of M / s Vi n at i
n ot f a ll u nd e r pu rv i ew of O rg a n ic s L i mi t e d v s. A CI T (Ι ΤΑ Ν ο .
s ect i on 15 4 of t h e A ct , s in c e 1 66 7 t o 1 6 6 9 / M um / 2 0 21 ) .
th e s e a r e d eb a t a bl e is su e s
an d n ot the mi s ta k e s In v i ew of the a b ov e ju di ci al
app a r en t f ro m r e c o r d. pr on ou n c em en t, the r es p on d en t
h um bl y st a t e t h a t, in te r e st sub si d y
O rd e r o f L d. C I T(A ) T he Ld . u nd e r T UF / R I PS a s ca p i ta l r e c eip t
C I T- (A ) v i d e o rd e r d a t ed 02 - a n d n o t cha rg e a b l e t o t a x .
0 2- 20 2 3 di s mi ss ed the
app ell a n t 's appeal sta t i ng
th a t th e i s su e s ra i s ed in t h e
gr oun d s of a p p ea l a r e n ot
mi s ta k e a p pa r ent fr om
r e c or d f o r th e p u rp o s e of
s ect i on 1 54 o f th e A c t .
Ag gr i ev ed b y t h e s a m e, t h e
app ell a n t i s in a pp e a l b e f o r e
y o u r Hon ou r .
9. On the other ha nd, the ld. DR argued that rectification cannot be carried at this juncture and assessee has already filed return u/s 139(1) and there is no mistake of the AO and the s ame cannot be rectified.
10. Heard the arguments of both the parties and peruse d the material available on record.
11. We have gone through the CBDT Circular No. 68 dated 17.11.1971 w hich is reproduced below:
" S EC T IO N 15 4 O F T HE I NC O M E- TA X A C T, 1 9 6 1 - R E C T IF I C ATI O N O F MIS TAK E - A PPA R EN T F R OM R E C O RD S - MI S TAK E S A P PAR E N T FR OM R EC OR D S - W HET H E R C AN B E TR EA T ED AS S UC H O N T H E BA S IS OF SU BS E Q U EN T D EC I S IO N OF SU PR EM E C OU RT C I R C U LAR N O. 68 [ F .N O . 2 45 / 17 / 71 - A& P A C ] D A T ED 1 7 - 1 1 -1 9 71 7 ITA No.95/Jodh/2023 Sudiva Spinners Private Limited 1 . T h e B oa rd a r e a d v i s ed t ha t a mi sta k e a ri si ng a s a r e sul t o f a s ub s eq u ent in t e r pr e t a ti on o f la w by t h e S up r em e Co ur t w oul d c on s ti t u te " a mi sta k e app a r en t f r om t h e r e c or d s " a n d r e c ti fi ca t o r y a ct i on un d e r se ct i o n 3 5 /1 5 4 o f t h e 1 9 22 A ct/ th e 1 9 61 A ct w ou ld b e i n or d e r. It h a s , t he r e fo r e, b e en de c id e d th at w h e r e a n a s s e s s e e m o v e s a n a p pl i c a t i on u n de r s e cti on 1 5 4 poi n ti ng ou t t ha t i n th e li gh t o f a l a t e r d e ci si on of th e Su p re m e C o u rt pr on ou n ci ng t h e c o r r e ct l e g a l p o s it i on , a m i st a k e ha s oc c u r r ed i n a n y of th e c omp l et ed a s s e s s m en t s in h i s c a s e, th e a pp li c a ti on sh a ll b e a ct e d u pon , p r ov id e d th e s a m e h a s b ee n f iled w it h i n t i me a n d is ot h e r wi s e i n o rd e r . W h er e any s u c h a pp li ca t i ons h a v e a l r ea dy b e e n r e j e ct ed a nd th e as s e ss e e fil e s f r e s h a p pl i c a ti on s w i th in t he st a t ut o r y t im e lim it , th e sa m e ma y al s o b e t r ea t e d o n p a r w i th th e a p pl ic a ti on s wh i ch ma y eith e r b e pen di n g or r e c eiv e d a ft e r th e i s s u e of t hi s c i rcu la r.
2 . Th e B oa rd d e si r e th a t a ny a pp ea ls o r r ef e r en ce s p end in g on th e p oin t a t is s u e m a y pl ea se b e w i th d ra wn . "
12. The Circular says that for the purpose of rectification, the assessee has to file application within the statutory time limit.
13. The statutory time limit for the purpose of Section 154 is as under:
" R e c ti fi ca ti on o f mi s t a k e.
1 54 . ( 1) W it h a vi e w to r e ct i fy i ng a n y m is t a k e a ppa r ent f r om th e r e c o rd a n in c om e - t a x au t h o rit y r e f e rr e d to in s ec t i on 1 1 6 m a y, --1
( a ) am en d a ny o rd e r pa s s ed by it un d e r t h e p r ov i si on s of th i s A ct ;
( b) a me n d an y in t i m a ti on o r d e e m ed i nt im a t i on un d e r su b -s e ct i on ( 1 ) o f s ect i on 1 43 ;
( c ) a m en d an y i nt i m a ti on un d e r s u b- s e ct i on (1 ) o f s e c ti on 2 0 0A ;
(d ) a m end an y i nt i m a ti on u n d e r s ub - s e c ti on (1 ) o f s e ct i on 2 0 6C B .8 ITA No.95/Jodh/2023
Sudiva Spinners Private Limited ( 1A ) W h e r e an y m a t t e r h a s b e en c on si d e r ed a n d d e c i d ed i n a n y pr o c e ed in g by wa y of ap p eal o r r e v i s i on r el a t in g to a n o rd e r r e f e rr e d t o in s u b- s ec t i on ( 1) , the au t h o rit y p a s si ng su c h o rd e r may, n otw i th s t a n di ng a n yt h in g c ont a i n ed i n an y l a w f o r th e ti m e b ei n g i n f o r c e , a m en d t h e o rd e r u nd e r th a t s u b- s ec t i on in r ela t i on t o a n y m a tt e r oth e r th a n t h e m a tt e r wh i ch ha s be en s o con sid e r ed a n d d ec i d ed .
( 2) S u b j e ct to th e o th er p r o v i si on s of this s e c ti on , the a u th o ri t y c onc e rn e d--
( a ) ma y m ak e a n a m en d m en t u n d e r s u b- se cti on (1 ) o f it s ow n m oti on , a n d ( b) sh all m ak e su c h a m en dm e nt f o r r e ct if y in g a n y su c h m i s ta k e w h i ch ha s be en b r ou g ht t o it s not i c e b y t h e a s s e ss e e o r b y th e d e d u ct o r o r by th e c oll e ct o r, a n d w h e r e t h e a u th o ri t y c on c e rn ed i s [ th e Joi n t C o mm i s si on e r ( App ea l s) o r] t h e C om mi ss i on e r ( Ap p ea l s) , by th e A ss e s si n g Of fi c e r a l s o.
( 3) A n am e n dm ent , wh ic h h a s th e e f f e c t of en h a n c in g a n a s s e ss m en t o r r edu c in g a r e fu n d o r oth e rw is e i n c r ea si ng t h e l ia bi li t y o f t h e a s s e ss e e o r th e d e d uc to r o r th e c oll e ct o r, sh a ll n ot b e m a d e u nd e r t hi s s e ct i on un l es s th e au th o ri ty c on c e rn ed ha s g iv en n oti c e t o t h e a ss e s s e e o r t h e d ed u ct o r o r t h e c ol l e ct o r o f i t s in t en ti on s o t o d o a n d h a s a ll ow e d t h e a s se s s e e o r th e d ed u ct o r o r th e c oll e ct o r a r e a s on a b l e opp o rtu n it y o f b e in g h ea r d.
( 4) Wh e r e a n am en dm ent i s m a d e u n d e r th i s s ec ti on, a n o rd e r s h a ll b e pa s s ed in w r it in g b y th e in co m e- t a x a u t ho ri t y c on c e rn ed .
( 5) Wh e r e an y su c h a m end m ent ha s th e e ff e ct o f r edu c in g t he a s s e s sm ent o r ot h e r w is e re d u c i ng th e l i a b ili t y o f t h e a s s e s se e or th e d ed u ct o r o r th e c oll e ct o r, t h e A s s es s in g O ff ic e r s h a l l m a k e a n y r efu n d w h ic h ma y b e du e t o su c h as s e s s e e o r t h e d edu c t o r o r t h e c o l le c t o r .
( 6) Where an y s u ch a m end me n t has the e f f ec t of en h a nc i ng th e as s e ss m en t o r r ed u ci ng a r e fu n d a l r ea d y m a d e o r oth e r w i s e in c r ea si n g th e li a bi l i ty of th e a s s e ss e e o r t h e d edu c t o r o r th e c oll e c t o r , th e A s se s s in g O ffi c e r sh a ll se r v e o n t h e a s s e ss e e o r t h e d edu c t o r o r t h e co ll e ct o r, a s th e ca s e ma y b e a n oti c e o f d em a nd i n t h e p r e sc ri b ed f o r m sp e ci fyi n g t h e s u m 9 ITA No.95/Jodh/2023 Sudiva Spinners Private Limited pa y a b l e , a n d su ch not i c e o f d em a nd s ha l l b e d ee m ed t o b e i s su ed u nd e r s ect i on 1 56 a n d th e p r ovi s i on s of t hi s A c t sh a ll a p pl y a cc o r d in gl y .
( 7) S av e a s o t h e r w i se p r o v id e d i n se c t io n 1 55 o r su b- se ct io n ( 4) o f se c t io n 1 8 6 no a m e n d m en t u nd e r th i s s ec t io n s h all be m a d e a ft er t h e ex p ir y o f fo u r ye a rs fr om t h e e nd o f t he fin a nc i a l y e a r i n w h ic h t h e o rd e r s o ug ht t o b e a m en d ed w a s p a s s e d .
( 8) W it h ou t p r eju d ic e t o th e p r ov is i o n s o f sub - se c t io n ( 7 ), w h e r e a n app li ca ti on fo r a m e nd m en t u n d e r t h is s ect i o n i s ma d e by t h e a s s e s s e e o r by t h e d edu c t o r o r by th e c ol l e ct o r on o r a ft e r t h e 1 st d a y o f Ju n e , 2 0 0 1 t o an in c om e- t a x a u th o ri t y r e f e rr e d t o in s u b- s e ct i on ( 1 ) , t h e a u th o ri t y sh a l l pa s s a n o rd e r , w it h in a p er i od o f s ix m o nt h s f ro m t he en d of t h e m o nt h in w hic h th e a p p li cat i on i s r ec e iv ed b y it , --
( a ) mak i ng th e am e n dm en t; o r ( b) r e fu sin g t o al l o w t h e c la im ."
14. The Act provides for a period of 4 years fro m the date of order sought to be rectified and not 4 years from original order. Hence, if an order is revised, se t aside, etc., the n the per iod of 4 years will be counte d from the date of such fresh order and not from the date of or iginal order.
15. In this case, the assessee filed return of income on 29.09.2012 and the same has been assessed u/s 143(3) vide order dated 02.06.2014. The asse ssee file d letter for rectification o n 23.05.2017. Thus, we find that the rectification application filed by the assessee is within the time allowed, hence the observation of the revenue authorities that the issue has been raise d after a period o f 5 years is wrong on facts.
10 ITA No.95/Jodh/2023Sudiva Spinners Private Limited
16. The similar issue has been adjudicated by the Co-ordinate Bench of Tribunal in the case of DCIT Vs. M/s. Kashmir Steel Rolling Mills in ITA No. 130/Asr ./2014, order date d 16.01.2015. The o perative part of the said order is re produced as under:
"8... ...Now, the question ar ises whe ther powe r u/s 154 can be invo ked when the iss ue is decided in favo ur of as sessee by the Juris dic tio nal High Cour t after the order by an autho rity has bee n passed. In this regard, the Ld. Counsel for the as ses see, Mr . Tar un Bansal , re lied upon the decision o f the Hon' ble Punjab & Haryana High Co urt (FB) in the case of CIT vs. Smt. Aruna Luthra (supr a), where the facts and the decisio n of the Ho n'ble High Court are repro duce d for the sake of convenie nce here in below:
"The powe r given to the authority under section 154 of the Income-tax Act, 1961, is very wide . It can correct "any mistake "
provide d it is "a ppare nt from the record". Section 154 does not provide tha t the e rror has to be see n in the order with refere nce to the date which it was passed. T he mistake has to be on the record o f the case. The record wo uld include eve rything on the case file. The re turn, the evidence and the order are a part o f the record. Thus , even in the case of an assessment u/ s 143(1) , it canno t be ass umed that there can be no erro r apparent from the record. Section 154 has been enacted to enable the autho rity to rectify the mistake. The legislative intent is not to allo w it to conti nue . This pur pose has to be promoted. The legis lature's will has to be c ar ried out. By placing a nar row constructio n, the object of the legislatio n would be de fea ted. Parliament has prescr ibe d a period of fo ur years fo r co rrection of mistake. While an assessment u/s 143 or 144 has to be normally made wit hin a period o f one or two years, the mistake can be rectified at any time during the pe riod o f four years . The obvious intentions within the pres cri bed tim e, it should not be allowe d to continue. Sec tion 11 ITA No.95/Jodh/2023 Sudiva Spinners Private Limited 154 clearly provides for the inte rventio n of the authority within the spe cified time, subject to the conditio n that the mistake is apparent and the issue is not debatable . Thus , any right under an order is subject to the provisio ns of the statute. That being so there is no veste d right which can be said to have been taken away. The provision has inbuilt sa feguar ds . It pro vides for the issue o f no tice. It ensures the gr ant o f an o ppo rtunity to be heard. It limits the jurisdiction of the authority. The action can benefit the assessee as well as the Revenue . In thi s situatio n, there is no gro und fo r placing an unduly restricted interpretation on the provision. The powe r u/s 154 can be invoke d e ven when an issue is dec ided by the jurisdictional High Court or a s upe rio r court a fte r the order had been passe d.
In her return for the assessment year 1987- 88, the assessee claimed a deduction from the profits of business, of a sum represe nting loss in chit fund. This was a llowed in an assessment u/s 143(1). Subse quently, on the basis o f a judgment of the High Court ho ld that the transactions did no t invo lve any taxable income or revenue expenditure, the Assessing Office r added the sum in question, in proceedings u/s 154. The Tribunal he ld in favour of the asse ssee. On appeal:
Held, tha t the dispute re lated to the assessment ye ar 1987-88. The pa rties had been litigating fo r more than 13 years . The ultimate tax effect was limited. Thus, even though the decision on the question of law was in fa vour of the Revenue, the o rde r passed by the Tr ibunal w as not be ing inter fere d with."
6.1. Also the de cision o f the Hon'bl e Kerala High Co urt, in the c ase of Ki l Kota giri Tea and Coffee Estates Co. Ltd. (supra) relied upon by the Ld. Counsel for the assessee , Mr. Tarun Bans al, Advocate , is repro duce d for the sake of convenie nce (Head Note) he rein be low:12 ITA No.95/Jodh/2023
Sudiva Spinners Private Limited "An order of assessment, based upon an inte rpretation or applic ation of law which is ultimately fo und to be wrong in the light o f judic ia l pronouncements rendered subse quently, discloses a mistake apparent from the record When the court decides a matter, it does not make the law in any sense but all it does is that it interprets the law and states what the law has always been and mus t be understood to have be en Where an orde r is made by an autho rity , on the basis of a particular decision, the revers al o f such de cis ion in further proceedings will justify a rectification o f the o rder based on that decision.
A binding dec ision rendere d by a co urt is always re trospective and the dec isio n which is o verrule d was ne ver the law . The overruling decisio n should be deemed to have bee n in force e ven on the day when the order sought to be rectified was passed. A subsequent binding decision of the Supreme Cour t or of the High Court has retrospective ope ra tio n as in the case of subsequent legis la tion and ove rruling is always retrospective.
Section 254(2) and section 154 of the Income-tax Act enable the concerne d authorities to rectify any mistake appare nt from the record. The said expression has a wider content than the expres sion error apparent on the face of the reco rd" occurring in Orde r 47, rule 1 of the Civil Proce dure Co de The restrictions on the powe r of re vie w under Order 47, rule 1, Civil Procedure Co de, 1908. The res trictions on the power of re view u/s 47, rule 1, I do not hold good in the case of section 254(2) and section 154 of the Income-tax Act.
Even for the purpose of orde r 47, rule 1 of the Civil Procedure Code, 1908, which is more res tr ictive , a subsequent binding authority tak ing a differe nt view of law is a good ground for revie w, on the ground that the order so ught to be reviewed 13 ITA No.95/Jodh/2023 Sudiva Spinners Private Limited passed on an antecede nt decisio n, which stands overruled, constitutes an err or a pparent o n the face o f the record.
For the assessme nt ye ar 1974-75, the assessee claimed interest on the adv ance ta x pa id by it in excess but beyond the due da tes . The income tax officer disa llowed the claim of the as s essee. The Commissioner (Appeals) upheld the claim of the ass essee. The Tribunal following the decision of a single judge of the Kerala High Court in A. Sethumadha van v. CIT (1980) 122 ITR 587 (Ke r.) by order date d October 31, 1981, he ld that the belated payments were no t to be ta ken into account as advance tax for the purpose of section 214 of Income-tax Act, 196, and hence interest was not admiss ible for such belated payme nts. A Division B ench of the High Co urt by order dated January 22, 1982 in Santha S. Sheno y v. Unio n of India ( 1982) 135 ITR 39 (Ker) reversed the decisio n of the single judge in A Sethumadha van v. CIT (1980) 122 ITR 587 and held that payments of tax m ade within the financ ial year, though not within specified dates should be treated as advance tax and the assessee was entitle d to interest on the excess tax paid. The asse sse e filed an a pplication u/s 154 fo r re ctification o f the order of the Tribunal date d October 31, 1981, in view of the decis ion of the Division Bench in S antha S. Shenoy v. Union of India (1982) 135 ITR 39 (Ker.) , ho lding that interes t w as admiss ible even belated payments of advance tax. The Tribunal dismisse d the applicatio n on the gro und that rec tific ation u/s 154 of the Act must be of a mistake which was a mistake in the light of the law in fo rce at the time w hen the or der so ught to be rectifie d was passed and the subsequent dec isio n of the Division Bench o f the High Cour t had no re trospective operation as in the case of subse que nt legislation or the decision o f the Supreme Court. O n an original pe tition filed by the assessee challenging the order of the T ribunal:14 ITA No.95/Jodh/2023
Sudiva Spinners Private Limited Held: tha t the o rder passed by the Appe llate Tr ibunal da ted October 31, 1981, rel ying on the decision of the s ingle judge in Sethumadhavan' s case (1980) 122 ITR 587 (Ke r.) , disc losed a mistake a pparent from the reco rd, in the light of the subsequent overruling of the very decision re lied on by the Appellant T ribunal, by a Div isio n Bench in the decisio n reported in Santha S. Shenoy's case (1982) 135 ITR 39 (Ke r). When the Bench o f the High Court overrule d the decision o f the single judge in Sethumadhavan's case (1980) 122 ITR 587 (Ker.), the earlier decis ion was ne ver the l aw . The law on the point at all times was as stated by the Bench in the decision reported in Sa ntha S. Shenoy's case (1982) 135 ITR 39 (Ker.) The applicatio n fo r rectification, dated June 17, 1982 wa s w ithin four years from the date o f the o rder of the Tribunal, a nd was one filed within the time allo wed by law. The order passed by the Appellate Tribunal in the appeal disc losed a mistake a pparent from the record, as it held that the assessee was no t entitled to inte rest on the advance- tax paid beyond the due date , which had to be rectifie d. This should have been done by the Appe llate T ribunal in exercise of the po wers vested in it u/s 254(2) re ad w ith section 154 o f the Income-tax Act.
The Appellate Tr ibunal was directed to dispose o f the applicatio n for rectification in the light of section 254(2) read w ith section 154 o f the Income tax Act and in accordance with the law."
7. Fur ther, lately, vide order dated 24.11.14, passe d in CWP Nos. 2548, 2722 a nd 2152 o f 2014, in the case of 'Supre me Industries Ltd. vs . The Additional Commissioner of Income-Tax and Others' , the Hon'ble Bombay High Co urt has he ld, following the decision o f the Hon'ble Supreme Court in 'Grindlays Bank L td. vs . Central Government Industrial T ribunal' , 1980 SCC 420, while dealing with a similar s ituation, though unde r section 254 o f the Income Tax Act, that:
15 ITA No.95/Jodh/2023Sudiva Spinners Private Limited "12. I t is a settled positio n in la w that e very author ity exercis ing quas i judicial pow ers has inhe rent/incidental power in discharging of its functions to ensure that justice is done between parties i.e. no prejudice is caused to any o f the parties . This power has no t to be traced to any provision o f the Act but inheres in every quasi judicia l author ity. This has been so held by the S upre me Court in Grindla ys Bank Ltd. vs. Centr al Government Industrial Tribunal 1980 SCC 420. T herefo re, the afo resaid principle of law s hould have been adopted by the Tr ibunal. It is expecte d from the Tribunal to adopt a justice or iente d appro ach and no t de feat the legitima te r ights o the altar o f proce dures and technicalities . This is particularly so when there is no specific bar in the Act to correct an or der passed on rectificatio n. 13. It is fundamental principle o f law that no party sho uld be prejudice d o n account of any mistake in the orde r of the Tribunal. Tho ugh not necessary fo r the dis posal of this Petition, we express our disapproval of the stand taken in the impugned order that section 254(2) of the Act are meant only fo r rectifying the mistakes of the Tribunal and not of the parties . The Tribunal and the parties are not advers ar ial to each othe r. In fact, the T ribunal and the partie s normally represe nted by Advocates/ Chartered Accountants are comrades in arms to achieve justice . Therefo re, a mistake from any source be it-the parties o r the Tribunal so long as it becomes a part o f the record, would require e xamina tion by the Tribunal under se ctio n 254(2) o f the Act. It cannot be dismissed at the thre shold on the above ground." 8. Thus, this issue , it is seen, has bee n decide d in favour o f the asse ssee by the Ho n'ble Supreme Court as well as by various Hon' ble High Courts ITA N o.130(Asr)/2014 C.O.Nos. 10 & 11(Asr)/ 2014 11 across the country. The Department has no t been able to cite any decision to the co ntrar y. Thus, the legal position in this re gard is unanimous and the re is no divergence o r cleav age of o pinion interse amongst the Courts with re gard thereto."16 ITA No.95/Jodh/2023
Sudiva Spinners Private Limited
17. Similar stand has been taken by the Hon'ble Supreme Cour t and Co-ordinate Bench of ITAT as mentioned below:
PCIT Vs. Nitin Spinners Ltd. (130 taxmann.com 40 2) (SC) M/s B. R. Agrotech L td. Vs. ACIT in ITA No. 6244 to 6247/Del/2019, order dated 02.09.2021 DCIT Vs. Kashmir Steel Rolling Mills in ITA No. 130/Asr./2014, order dated 16.01.2015 M/s Nulux Engineers Vs. DCIT in ITA No. 2073/Mum/2017, order dated 05.10.2018 M/s Sudiva Spiners Pvt. Ltd. Vs. DCIT in ITA Nos. 65 & 66/Jo dh/2018
18. Since, the matter stands covered by the orders of the Co- ordinate Benc h of Tribunal and also by the judgment of Hon'ble Supreme Court, the appeal of the assessee is here by allowed.
19. In the re sult, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 18/01/202 4.
Sd/- Sd/-
(Saktijit Dey) (Dr. B. R. R. Kumar)
Vice President Accountant Member
Dated: 18/01/2024
*Subodh Kumar, Sr. PS*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR