Income Tax Appellate Tribunal - Raipur
Assistant Commissioner Of Income Tax, ... vs M/S. Raj Pipes, Rajnandgaon on 2 June, 2023
आयकर अपील य अ धकरण यायपीठ "एक-सद य" मामला रायपुर म
IN THE INCOME TAX APPELLATE TRIBUNAL
RAIPUR BENCH "SMC", RAIPUR
ी रवीश सूद, या यक सद य के सम
BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER
MA No.43/RPR/2023
(Arising out of ITA No.150/RPR/2022)
नधारण वष / Assessment Year : 2018-19
The Assistant Commissioner of Income Tax,
Circle-1(1), Raipur (C.G.)
.......अपीलाथ / Appellant
बनाम / V/s.
M/s. Raj Pipes,
Sadar Bazar,
Rajnandgaon-491 441
PAN: AAHFR6568H
...... यथ / Respondent
Assessee by : Shri Nikhilesh Begani, CA
Revenue by : Shri Piyush Tripathi, Sr. DR
सुनवाई क तार ख / Date of Hearing : 16.03.2023
घोषणा क तार ख / Date of Pronouncement : 02.06.2023
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ACIT, Circle-1(1), Raipur Vs. M/s. Raj Pipes
MA No.43/RPR/2023
आदे श / ORDER
PER RAVISH SOOD, JM
The present miscellaneous application filed by the department arises from the order passed by the Tribunal while disposing off the appeal in ITA No.150/RPR/2022 dated 05.09.2022, which thereafter pursuant to recalling of the aforesaid order in view of a miscellaneous application filed by the assessee in MA No.51/RPR/2023 dated 14.03.2023 was modified vide order passed in ITA No.150/RPR/2022 dated 17.03.2023. It is stated by the department that as the aforesaid order of the Tribunal is not found to be in conformity with the recent judgement of the Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd. Vs. Commissioner of Income Tax-I, Civil Appeal No.2833 of 2016 dated 12.10.2022, thus, the same suffers from a mistake which being glaring, apparent, patent and obvious from record had rendered the same amenable for rectification under sub-section (2) of Section 254 of the Act.
2. On a perusal of the miscellaneous application filed by the department in MA No.43/RPR/2023, I find that the revenue applicant under sub-section (2) of Section 254 of the Act has sought for recalling of the order passed by the Tribunal while disposing off 3 ACIT, Circle-1(1), Raipur Vs. M/s. Raj Pipes MA No.43/RPR/2023 the appeal in ITA No.150/RPR/2022, stating as under (relevant extract):
"2. In this case, an addition of Rs.91,150/-, was made by the A.O. by way of disallowance u/s 36(1)(va) on account of delayed payment of employee contribution towards EPF/ESIC. The Hon'ble ITAT while deciding the issue has vacated the said disallowance made by the AO by following its own decision on similar issue in the case of M/s Ind Synergy Limited in ITA No. 312/RPR/2016 dated 10/03/2022.
3. Subsequently, this issue has been decided by the Hon'ble Supreme Court in Civil Appeal No.2833 of 2016 in the case of Checkmate Services P. Ltd. vs. Commissioner of Income-tax-1. Vide Order pronounced on 12-10-2022, the Hon'ble Supreme Court has upheld the order of Hon'ble Gujrat High Court. In the case of Gujrat State Road Transport Corporation, Hon'ble Gujrat High Court has held that with respect to sum received by the assessee from any of his employees to which provision of sub-clause (x) of clause (24) of section (2) applies, the assessee shall be entitled to deduction in computing the income referred to in section 28 with respect to such sum credited by the assessee to the employee's account in the relevant fund or funds on or before the due date mentioned in explanation to section 36(1)(va).
4. In view of the above facts and circumstance, it is prayed that the above referred order may be recalled and suitable rectification may passed as per provision of u/s 254(2) of the I.T.Act, 1961."
3. I have heard the ld. Authorized Representatives of both the parties, perused the material available on record a/w. the respective written submissions filed by them, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions.
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ACIT, Circle-1(1), Raipur Vs. M/s. Raj Pipes MA No.43/RPR/2023
4. Issue leading to filing of the present miscellaneous application by the department lies in a narrow compass, i.e. as to whether or not the order passed by the Tribunal while disposing off the appeal not being in conformity with the subsequent judgment of the Hon'ble Supreme Court in the case of Checkmate Services P. Ltd. Vs. Commissioner of Income Tax-I, Civil Appeal No.2833 of 2016 dated 12.10.2022, had thus rendered the same as suffering from a mistake, which being manifest on the face of the record makes it amenable for rectification under sub-section (2) of Section 254 of the Act?
5. It is the claim of the Ld. Departmental Representative ("DR", for short) that as the view taken by the Tribunal that the assessee as per Section 43B of the Act was entitled for deduction of its delayed deposit of employees share of contributions towards Employees Provident Fund (EPF) and Employees State Insurance (ESI) is not in conformity with the subsequent judgment of the Hon'ble Supreme Court in the case of Checkmate Services P. Ltd. Vs. Commissioner of Income Tax-I, Civil Appeal No.2833 of 2016 dated 12.10.2022, therefore, the same had rendered its order that was passed while disposing off the appeal as suffering from a mistake, which being apparent from record is amenable for rectification under sub-section (2) of Section 254 of the Act. The Ld. DR in order to support his 5 ACIT, Circle-1(1), Raipur Vs. M/s. Raj Pipes MA No.43/RPR/2023 contention that pursuant to the order of the Hon'ble Apex Court in the case of Checkmate Services Pvt. Ltd. (supra), the order passed by the Tribunal, taking a view to the contrary, was amenable for rectification under sub-section (2) of Section 254 of the Act, had relied on the judgment of the Hon'ble Apex Court in the case of ACIT Vs. Saurashtra Kutch Stock Exchange Ltd. (2008) 305 ITR 227 (SC) and that of Hon'ble High Court of Punjab & Haryana in the case of CIT Vs. Smt. Aruna Luthra (2001) 252 ITR 76 ( P & H).
6. It was submitted by the ld. DR that the Hon'ble Apex Court in its recent judgment in the case of Checkmate Services Pvt. Ltd. Vs. Commissioner of Income Tax-I (supra), had held that the delayed deposit of the amount of employees share of contribution towards labour welfare funds by the assessee-employer was not to be allowed as a deduction under section 2(24)(x) r.w.s.36(1)(va) of the Act. Carrying his contention further, it was submitted by the ld. DR that the Hon'ble Apex Court, had observed, that as the assessee is not absolved from its obligation to deposit the employees share of contributions on or before the "due date" as contemplated in the respective Labour Welfare Acts, a pre-condition for claiming the same as a deduction under Section 2(24)(x) r.w.s. 36(1)(va) of the Act, therefore, it would not be saved by the non-obstante clause of Section 6 ACIT, Circle-1(1), Raipur Vs. M/s. Raj Pipes MA No.43/RPR/2023 43B of the Act. It was submitted by the ld. DR, that as the view taken by Tribunal while disposing off the captioned appeals was not found to be in conformity with the subsequent judgment of the Hon'ble Apex Court in the case of Checkmate Services (P) Ltd. (supra), therefore, the same were amenable for rectification under sub-section (2) of Sec. 254 of the Act.
7. Per contra, the Ld. AR had objected to the miscellaneous application filed by the department. It was submitted by the Ld. AR that the Tribunal was divested of its jurisdiction to carry out rectification of its order u/s.254(2) of the Act on the basis of the subsequent judgment of the Hon'ble Apex Court in the case of Checkmate Services Pvt. Ltd. Vs. Commissioner of Income Tax-I (supra).
8. I have given a thoughtful consideration to the issue before me and am unable to persuade myself to subscribe to the contentions advanced by the Ld. AR. Admittedly, it is a matter of fact borne from record that the view taken by the Tribunal, wherein it had vacated the additions made by the AO's w.r.t delayed deposit of employee's share of contribution towards labour welfare funds, viz. EPF & ESI by the assessee-employer, i.e. beyond the stipulated time period 7 ACIT, Circle-1(1), Raipur Vs. M/s. Raj Pipes MA No.43/RPR/2023 contemplated in the said respective Acts is not in conformity with the view taken by the Hon'ble Apex Court in the case of Checkmate Services Pvt. Ltd. Vs. Commissioner of Income Tax-I (supra). The genesis of the present controversy, is as to whether or not the aforesaid subsequent judgment of the Hon'ble Apex Court would render the order passed by the Tribunal while disposing off the appeal, wherein a view to the contrary had been taken, as suffering from a mistake which being apparent, patent, obvious and glaring from record would render the same amenable for rectification u/s. 254(2) of the Act?
9. In my considered view, the aforesaid issue can safely be resolved by referring to the judgment of the Hon'ble Supreme Court in the case of ACIT Vs. Saurashtra Kutch Stock Exchange Ltd. (2008) 305 ITR 227 (SC). The Hon'ble Apex Court by referring to the order of the Hon'ble High Court of Gujarat in the case of Suhrid Geigy Ltd. Vs. CIT (1999) 237 ITR 834 (Guj), had observed, that if a point is covered by the decision of the Hon'ble Jurisdictional High Court rendered prior to or even subsequent to the order proposed to be rectified, then it could be said to be a mistake apparent from record u/s. 254(2) of the Act and could be corrected by the Tribunal. The Hon'ble Apex Court drawing support from Blackstonian theory, had observed that it 8 ACIT, Circle-1(1), Raipur Vs. M/s. Raj Pipes MA No.43/RPR/2023 is not the function of the court to pronounce a "new rule" but to maintain and expound the old one. The Hon'ble Apex Court had observed that if a subsequent decision altered the earlier one, then the later decision does not lay down any new law but only discovers the correct principle of law which had to be applied retrospectively. It was further observed by the Hon'ble Apex Court that even where an earlier decision of the court operated for quite some time, the decision rendered later on would have retrospective effect, clarifying the legal position which was earlier not correctly understood. Referring to its historical decision in the case of I.C Golaknath Vs. State of Punjab & ors, 1967 SCR (2) 762, it was further observed by the Hon'ble Supreme Court that though the Court in the said judgment had accepted the doctrine of "prospective overruling", however, the same was an exception to the general rule of the doctrine of precedent. For the sake of clarity, the relevant observations of the Hon'ble Apex Court in the case of ACIT Vs. Saurashtra Kutch Stock Exchange Ltd. (supra) are culled out as under:
"40. The core issue, therefore, is whether non-consideration of a decision of Jurisdictional Court (in this case a decision of the High Court of Gujarat) or of the Supreme Court can be said to be a "mistake apparent from the record"? In our opinion, both - the Tribunal and the High Court - were right in holding that such a mistake can be said to be a "mistake apparent from the record" which could be rectified under Section 254(2).9
ACIT, Circle-1(1), Raipur Vs. M/s. Raj Pipes MA No.43/RPR/2023
41. A similar question came up for consideration before the High Court of Gujarat in Suhrid Geigy Limited v. Commissioner of Surtax, Gujarat, (1999) 237 ITR 834 (Guj). It was held by the Division Bench of the High Court that if the point is covered by a decision of the Jurisdictional Court rendered prior or even subsequent to the order of rectification, it could be said to be "mistake apparent from the record" under Section 254 (2) of the Act and could be corrected by the Tribunal.
42. In our judgment, it is also well- settled that a judicial decision acts retrospectively. According to Blackstonian theory, it is not the function of the Court to pronounce a `new rule' but to maintain and expound the `old one'. In other words, Judges do not make law, they only discover or find the correct law. The law has always been the same. If a subsequent decision alters the earlier one, it (the later decision) does not make new law. It only discovers the correct principle of law which has to be applied retrospectively. To put it differently, even where an earlier decision of the Court operated for quite some time, the decision rendered later on would have retrospective effect clarifying the legal position which was earlier not correctly understood.
43. Salmond in his well-known work states;
"The theory of case law is that a judge does not make law; he merely declares it; and the overruling of a previous decision is a declaration that the supposed rule never was law. Hence any intermediate transactions made on the strength of the supposed rule are governed by the law established in the overruling decision. The overruling is retrospective, except as regards matters that are res judicatae or accounts that have been settled in the meantime". (emphasis supplied)
44. It is no doubt true that after a historic decision in Golak Nath v. Union of India, (1967) 2 SCR 762, this Court has accepted the doctrine of `prospective overruling'.
It is based on the philosophy: "The past cannot always be erased by a new judicial declaration". It may, however, be stated that this is an exception to the general rule of the doctrine of precedent.
45. Rectification of an order stems from the fundamental principle that justice is above all. It is exercised to remove the error and to disturb the finality." Also, I find support from the judgment of the Hon'ble Supreme Court in the case of S.A.L. Narayana Row, CIT v. Model Mills Nagpur Ltd. [1967] 64 ITR 67 (SC), wherein the levy of additional tax on excess dividend was declared by the High Court of Bombay as illegal. The assessee company had by relying on the said decision of the Hon'ble 10 ACIT, Circle-1(1), Raipur Vs. M/s. Raj Pipes MA No.43/RPR/2023 Jurisdictional High Court filed an application with the Income Tax Officer for refund of the additional tax that was deposited by it. The Income-tax Officer declined to accede to the request of the assessee on the ground that the assessment was completed long before the judgment was pronounced by the High Court. The revision application filed by the assessee before the Commissioner of Income Tax under section 33A was also rejected. Against the order passed by the Commissioner of Income Tax the assessee company filed a writ petition with the High Court. The Hon'ble High Court allowed the assessee's petition and directed the Commissioner of Income Tax to revise the order and refund the taxes which were illegally collected. On appeal by the revenue against the order of the High Court which had decided the issue in favour of the assessee, the Supreme Court upheld the decision of the High Court in which the Income-tax Officer was directed to revise the order and rectify the mistake. In Kil Kotagiri Tea and Coffee Estates Co. Ltd. v. ITAT [1988] 174 ITR 579 (Ker.), the Hon'ble High Court of Kerala, had held that an order of assessment passed upon an interpretation or application of law which is ultimately found to be wrong in light of judicial pronouncements rendered subsequently discloses a mistake apparent from the record. The Hon'ble High Court of Karnataka in 11 ACIT, Circle-1(1), Raipur Vs. M/s. Raj Pipes MA No.43/RPR/2023 the case of Mysore Cements Ltd. v. Deputy Commissioner of Commercial [1994] 93 STC 464, had observed, that it was needless to point out that when a point is covered by a decision of the Supreme Court or concerned Court, either rendered prior to or subsequent to the order proposed to be rectified, then the point ceases to be a debatable point and it also ceases to be a point requiring elaborate arguments or detailed investigation/enquiry. The High Court of Andhra Pradesh in the case of B.V.K. Seshavataram Vs. CIT [1994] 210 ITR 633 (AP) followed the ratio of the decision of the Hon'ble Supreme Court in the case of S.A.L. Narayana Row [1967] 64 ITR 67(SC), and came to the conclusion that a subsequent decision can form a valid basis for rectifying an order of assessment under section 154 of the Income-tax Act, 1961. The Hon'ble High Court of Madras in the case of M. K. Kuppuraj Vs. ITO [1995] 211 ITR 853 (Mad.), was of the view that an assessment made contrary to a judgment subsequently rendered by jurisdictional High Court constitutes an error on the face of the record amenable to rectification proceedings under section 154 of the Income tax Act, 1961. The Hon'ble High Court of Delhi in the case of Lakshmi Sugar Mills Co Ltd. Vs. CIT (2012) 22 taxmann.com 300 (Delhi), referring to the judgment of the Hon'ble Apex Court in the case of Saurashtra Kutch Stock Exchange 12 ACIT, Circle-1(1), Raipur Vs. M/s. Raj Pipes MA No.43/RPR/2023 Ltd. (supra), had observed, that as judges do not make law and only discover or find the law, therefore, a judicial decision acts retrospectively. It was observed by the High Court, that where a decision of the Hon'ble Supreme Court overrules an earlier decision, the views expressed in the later decision would have to be regarded as having always been the law. Also, I find that the issue in hand had exhaustively been looked into by the Hon'ble High Court of Punjab & Haryana in the case of CIT Vs. Smt. Aruna Luthra (2001) 252 ITR 76 (P&H). Indulgence of the Hon'ble High Court was sought for adjudicating the following question of law:
"Can proceedings for rectification of an order passed under the provisions of the Income Tax Act, 1961, be initiated on the basis of a judgment delivered by the jurisdictional or a superior court after the passing of the said order?"
The Hon'ble High Court on the basis of its exhaustive deliberations on the issue under consideration, had observed that the proceedings for rectification of an order passed under the provisions of Income Tax Act can be initiated on the basis of a judgment delivered by Jurisdictional High Court or a superior court after passing of the said orders. For the sake of clarity, the observations of the Hon'ble High Court are culled out as under:
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ACIT, Circle-1(1), Raipur Vs. M/s. Raj Pipes MA No.43/RPR/2023 "13. Apparently, the argument of Mr. Bansal appears to be attractive. If the issue of error in the order is to be examined only with reference to the date on which it was passed, it may be possible to legitimately contend that it was legal on the date on which it was passed. The subsequent decision has only rendered it erroneous or illegal. However, there was no error much less than an apparent error on the date of its passing.
Thus, provision of Section 154 is not applicable. However, such a view shall be possible only if the provision were to provide that the error has to be seen in the order with reference to the date on which it was passed. Such words are not there in the statute. Resultantly, such a restriction cannot be introduced by the court. Thus, the contention raised by the counsel for the assessee cannot be accepted.
14. There is another aspect of the matter. In a given case, on interpretation of a provision, an authority can take a view in favour of one of the parties. Subsequent to the order, the jurisdictional High Court or their Lordships of the Supreme Court interpret the same provision and take a contrary view. The apparent effect of the judgment interpreting the provision is that the view taken by the authority is rendered erroneous. It is not in conformity with the provision of the statute. Thus, there is a mistake. Should it still be perpetuated? If the contention raised on behalf of the assessee were accepted, the result would be that even though the order of the authority is contrary to the law declared by the highest court in the State or the country, still the mistake couldn't be rectified for the reason that the decision is subsequent to the date of the order.
15. Only the dead make no mistake. Exemption from error is not the privilege of mortals. It would be a folly not to correct it. Section 154 appears to have been enacted to enable the Authority to rectify the mistake. The legislative intent is not to allow it to continue. This purpose has to be promoted. The legislature's will has to be carried out. By placing a narrow construction, the object of the legislation shall be defeated. Such a consequence should not be countenanced.
16. Still further, it deserves mention that the Parliament has prescribed a period of four years for correction of the mistake. While assessment under Section 143 or 144 has to be normally made within a period of one or two years, the mistake can be rectified at any time during the period of four years. The obvious intention of the Legislature is that if the mistake has come to the notice of the authority within the prescribed time, it should not be allowed to continue. It should 14 ACIT, Circle-1(1), Raipur Vs. M/s. Raj Pipes MA No.43/RPR/2023 be rectified. Regardless of the fact that the limitation for passing an order of assessment or filing an appeal has elapsed.
17. Still further, the provision has inbuilt safeguards. It provides for the issue of notice. It ensures the grant of an opportunity. It limits the jurisdiction of the authority. The action can benefit the assessee as well as the Revenue. In this situation, there appears to be no ground for placing an unduly restricted interpretation on the provision.
18. Mr. Bansal contended that a judgment of a court operates only prospectively and not retrospectively. Thus, a decided cause cannot be re-decided. Is it so?
19. A court decides a dispute between the parties. The cause can involve decision on facts. It can also involve a decision on a point of law. Both may have bearing on the ultimate result of the case. When a court interprets a provision, it decides as to what is the meaning and effect of the words used by the legislature. It is a declaration regarding the statute. In other words, the judgment declares as to what the legislature had said at the time of the promulgation of the law. The declaration is -- This was the law. This is the law. This is how the provision shall be construed.
20. Julius Stone in 'Social Dimensions of Law and Justice' () Ist Indian Reprint 1999 (Chapter (XIV) while dealing with the subject of 'Judge and Administrator in Legal Ordering', observes as under:--
"If, then, a main impulse underlying the stare decisis doctrine is that justice should respect reasonable reliance of affected parties based on the law as it seemed when they acted, this impulse still has force when reliance is frustrated by an overruling. Despite this, it has long been assumed that a newly emergent rule is to be applied not only to future facts, and to the necessarily past facts of the very case in which it emerges, but to all cases thereafter litigated, even if these involved conduct, which occurred before the establishment of the new rule. This has proceeded ostensibly on the conceptual basis, clearly formulated since Blackstone, that the new holding does not create but merely declares, law. So that any prior putative law under which the 15 ACIT, Circle-1(1), Raipur Vs. M/s. Raj Pipes MA No.43/RPR/2023 parties acted is to be regarded as simply not law".
(Emphasis supplied.)
21. The above observations clearly support the principle that the court merely declares law. An earlier decision as declared by the court is "simply no law".
22. Notwithstanding the above observations, the issue of judge-made law being prospective or retroactive is not free from difficulty. However, the system as followed in Indian courts ensures a "suitable legal order". It promotes "dignity and good repute of judicial institutions". It is only equitable and fair that similar cases lead to identical results.
23. Mr. Sanjay Bansal contended that the judicial principle of retroactive operative of judge-made law has now been negated by the Parliament by introducing the 'Explanation' in Order 47 Rule 1. A subsequent decision is no longer a good ground for review. Thus, the counsel contended that the same principle should be followed while construing the provisions of the Income Tax Act.
24. This contention cannot be accepted. Firstly, because a similar provision has not been made in S. 154. The plain language is materially different. Still further, we have the authoritative pronouncement of their Lordships of the Supreme Court in Income Tax Officer, Alwaye v. Asok Textiles Ltd., Alwaye AIR 1961 SC 699. It was held that the High Court had "fallen into an error in equating the language and the scope of Section 35 of the Act (Income Tax Act, 1922) with that of Order 47 Rule 1 CPC. The language of the two is different because according to Section 35 of the Act which provides for rectification of mistakes the power is given to the various income-tax authorities within four years from the date of any assessment passed by them to rectify any mistake 'apparent from the record' and in the Code of Civil Procedure the words are an error apparent on the face of the record and the two provisions do not mean the same thing". As such, the contention raised by the learned counsel cannot be accepted.
25. Mr. Bansal also pointed out that in the case of Jiyajeerao Cotton Mills Ltd. v. Income Tax Officer (1981) 130 ITR 710 a Division Bench of the Calcutta High Court had categorically taken the view that the judgment of the Supreme Court does not have retrospective effect. This decision was affirmed by 16 ACIT, Circle-1(1), Raipur Vs. M/s. Raj Pipes MA No.43/RPR/2023 their Lordships of the Supreme Court as SLP (c) Nos. 8791- 8793 of 1980 were dismissed. Mr. Bansal also referred to the decision of the Andhra Pradesh High Court in Pingle Madhusudan Reddy v. Controller of Estate Duty, to contend that the judgment of the court does not operate retrospectively.
26. It is undoubtedly true that the view taken by the Andhra and Calcutta High Courts supports the argument of the petitioner. Even the Madras High Court has taken a veiw in favour of the assessee in State of Tamil Nadu v. K.S.M.G Meenambal and Co.,(1984) 56 STC 82 However, the view of the Kerala and Karnataka High Courts is to the contrary, In Kotagiri Tea and Coffee Estates Co. Ltd. v. Income Tax Appellate Tribunal (1988) 174 ITR 579, the Kerala High Court relying upon the principle enunciated in 'Salmond's Jurisprudence' had held in favour of the Revenue. Similar view was expressed by the Karnataka High Court in Mysore Cemets Ltd. v. Deputy Commissioner of Commercial Taxes () (1994) 116 CTR (Karnataka) 284.
27. Learned counsel referred to the decision of a Bench of this Court in CIT v. Haryana State Co-operative Supply and Marketing Federation () (1990) 182 ITR 53. In this case, it was inter alia observed that "once the matter has been decided by the High Court, it is not possible for the Department to carry out rectification on the solitary ground that in a later decision, the Supreme Court has impliedly overruled the decision". In Hero Cycles Ltd. v. The State of Punjab, () (1995) 99 STC 611 and Ram Dass Rice and General Mills v. The State of Punjab, () (1996) 100 STC 211 the opinion was in favour of the Revenue.
28. On an examination of the judgments cited by the counsel for the Assessee, it appears that the rectification was not sought on the basis of a binding decision of the jurisdictional High Court or the Supreme Court. There was no such judgment when the application under S. 154 had been filed. The pronouncement had come at a later stage when the prescribed period of four years had already expired. Thus, the decisions have been given in a different context. Thus, these are distinguishable from the facts of the case in hand.
29. The basic principle is the certainty of law. Even though considerations of justice, equity and fair-play sometimes compel courts to deviate from a view expressed in an earlier case, yet the common law principle of stare decisis has been 17 ACIT, Circle-1(1), Raipur Vs. M/s. Raj Pipes MA No.43/RPR/2023 followed with the avowed object of ensuring that the litigant must be able to act on the view expressed by a court. Law can't move with the wind. It is not a weather cock. The citizen is entitled to act on the basis of the law declared by the court. Once he acts, he should not be told that this summer is very hot. Thus, the law has changed even though the legislature has not intervened. The gnawing uncertainty has certainly to be avoided.
30. It was then contended that in a case where the Income Tax Officer intimates the assessee that the return has been accepted under Section 143(1), the provision of rectification cannot be invoked. Learned counsel placed reliance on the decision of their Lordships of the Supreme Court in Commissioner Of Income-Tax v. Hero Cycles (P) Ltd. (1997) 228 ITR 463 in support of his contention.
31. On a perusal of Section 154, we find that the provision does not provide for rectification only when a mistake in the order is detected. The mistake has to be on the record of the case. The record would include everything on the case file. The return, the evidence and the order are a part of the record. The mistake can be detected from anything on the file. Thus, even in case of an assessment under Section 143(1), it has not to be assumed that there can be no error apparent from the record. As for the decision in the case of Hero Cycles, the rule laid down by their Lordships is that the mistake can be of fact and law. However, the rectification can be made only when "a glaring mistake of fact or law committed by the officer passing the order becomes apparent from the record. Rectification is not possible if the question is debatable". We cannot read this decision to mean that only the order has to be seen and not the record. Thus, the contention raised by the counsel cannot be accepted.
32. It was also contended that the decision of an authority decides the rights of the parties. It vests a right in them. The vested right can't be taken away except when specifically permitted by a retrospective law.
33. There is no quarrel with the proposition. However, what deserves notice is that the right, if any, is subject to the provisions of law. Section 154 clearly provides for the intervention of the Authority within the specified time. Subject to the condition that the mistake is apparent. The issue is not debatable. Thus, any right under an order is subject to the 18 ACIT, Circle-1(1), Raipur Vs. M/s. Raj Pipes MA No.43/RPR/2023 provision of the statute. That being so, there is no vested right which can be said to have been taken away."
10. On the basis of my aforesaid deliberations read along with the settled position of law as had been expounded by the Hon'ble Courts, I am of the considered view, that as a subsequent decision of the Hon'ble Supreme Court do not enact the law but declare the law as it always was, therefore, an order can be rectified on the basis of a subsequent judgment of the Hon'ble Supreme Court. My aforesaid view is further fortified by Article 141 of the Constitution of India, which reads as under:
"A law declared by the Hon'ble Supreme Court is binding on the Courts within the territory of India".
11. Apart from that, I find that a "Third Member" of the ITAT, Mumbai, Bench "E" in the case of Kailashnath Malhotra Vs. JCIT, Special Range 56, Mumbai (2010) 129 TTJ 393 (Mum.), had after drawing support from the judgment of the Hon'ble Supreme Court in the case of ACIT Vs. Saurashtra Kutch Stock Exchange Ltd. (2008) 305 ITR 227 (SC), observed that if the order passed by the Tribunal is not found to be in conformity with the judgment of the Hon'ble Supreme Court or that of the Hon'ble Jurisdictional High Court, which may be rendered prior to or subsequent to the impugned order 19 ACIT, Circle-1(1), Raipur Vs. M/s. Raj Pipes MA No.43/RPR/2023 then the same would constitute a mistake apparent from record amenable for rectification u/s. 254(2) of the Act. For the sake of clarity, the relevant observations of the Tribunal are culled out as under:
"... I have absolutely no doubt in my mind that the non- consideration of a judgment of the Hon'ble Supreme Court or that of the Hon'ble jurisdictional High Court delivered prior to or even subsequent to the order constitutes a mistake apparent from record as has been held by the Hon'ble Supreme Court in Saurashtra Kutch Stock Exchange Ltd. (supra). Similar view was expressed earlier by the Hon'ble Gujarat High Court in CIT Vs. Subodhchandra S Patel (2004) 265 ITR 445. In view of these judgments, it is vivid that even if the Hon'ble Supreme Court or the Hon'ble Jurisdictional High Court render a judgment after the passing of the order, the same has to be strictly followed. Interpretation of a statutory provision by the Hon'ble Supreme Court is always understood from the inception of the provision and it is never considered as a prospective ruling unless so specified."
On a perusal of the aforesaid order, it transpires that the Tribunal had observed that even if the Hon'ble Apex Court renders a judgment after passing of the order sought to be rectified, the same is to be strictly followed, as the judgment of the Hon'ble Apex Court is always understood from the inception of the provision and it is never considered as a prospective ruling unless so specified. My aforesaid conviction is further fortified by the judgment of the Hon'ble Supreme Court in the case of M/s New Noble Educational Society Vs. The Chief Commissioner of Income Tax, (2023) 290 Taxman 206 (SC). The 20 ACIT, Circle-1(1), Raipur Vs. M/s. Raj Pipes MA No.43/RPR/2023 Hon'ble Apex Court in its aforesaid judgment, had while departing from its previous rulings regarding the meaning of the term "solely" used in Section 10(23C)(vi) of the Act, had held, that in order to avoid disruption, and to give time to institutions likely to be affected to make appropriate changes and adjustments, it would be in the larger interests of society that the law declared in the said judgment operates prospectively. For the sake of clarity, the observations of the Hon'ble Supreme Court are culled out as under:
"78. In the light of the foregoing discussion, the assessees' appeals fail. It is however clarified that their claim for approval or registration would have to be considered in the light of subsequent events, if any, disclosed in fresh applications made in that regard. This court is further of the opinion that since the present judgment has departed from the previous rulings regarding the meaning of the term 'solely', in order to avoid disruption, and to give time to institutions likely to be affected to make appropriate changes and adjustments, it would be in the larger interests of society that the present judgment operates hereafter. As a result, it is hereby directed that the law declared in the present judgment shall operate prospectively. The appeals are hereby dismissed, without order on costs.
(emphasis supplied by me) On the basis of my aforesaid deliberations, it can safely be concluded that as and where the Hon'ble Apex Court had intended that its judgment be given a prospective applicability, a specific rider to the said effect as in the case of M/s New Noble Educational Society Vs. The Chief Commissioner of Income Tax (supra) had been provided.
However, I am afraid that no such rider is found in the judgment of 21 ACIT, Circle-1(1), Raipur Vs. M/s. Raj Pipes MA No.43/RPR/2023 the Hon'ble Apex Court in the case of Checkmate Services Pvt. Ltd.
Vs. Commissioner of Income Tax-I (supra), which means that the same would have a retrospective application. I, thus, considering the facts involved in the case before me r.w the aforesaid settled position of law, is of the considered view, that as stated by the department in its miscellaneous application and, rightly so, as the view taken by the Tribunal in the captioned appeal is not found to be in conformity with the judgment of the Hon'ble Apex Court in the case of Checkmate Services Pvt. Ltd. Vs. Commissioner of Income Tax-I (supra), therefore, the same had rendered the order passed while disposing off the appeal as suffering from a mistake, which being apparent from record had therein rendered it amenable for rectification under sub-
section (2) to Section 254 of the Act.
12. I, thus, in terms of my aforesaid observations allow the miscellaneous application filed by the department u/s. 254(2) of the Act. Accordingly, the order passed by the Tribunal while disposing off the appeal in ITA No.150/RPR/2022 dated 05.09.2022, which thereafter was modified by me vide order dated 17.03.2023 on the basis of recalling of the earlier order passed in miscellaneous application filed by the assessee on a MA No.51/RPR/2023 dated 14.03.2023 is recalled for the limited purpose of adjudicating the 22 ACIT, Circle-1(1), Raipur Vs. M/s. Raj Pipes MA No.43/RPR/2023 issue in light of the judgment of the Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd. (supra).
13. Resultantly, the miscellaneous application filed by the department in MA No.43/RPR/2023 is allowed in terms of my aforesaid observations. The registry is directed to fix the respective appeals for hearing for the limited purpose of giving effect to the judgment of the Hon'ble Apex Court in the case of Checkmate Services P. Ltd. Vs. Commissioner of Income Tax-I (supra) on 13.06.2023 after putting both the parties to notice.
Order pronounced in open court on 02nd day of June, 2023.
Sd/-
(रवीश सूद /RAVISH SOOD) या यक सद य/JUDICIAL MEMBER रायपुर / Raipur; दनांक / Dated : 02nd June, 2023.
SB
आदे श क त ल प अ े षत / Copy of the Order forwarded to :
1. अपीलाथ / The Appellant.
2. यथ / The Respondent.
3. The CIT(Appeals), Raipur (C.G.)
4. The Pr. CIT-1, Raipur (C.G.)
5. वभागीय त न ध, आयकर अपील य अ धकरण, "एक-सद य" बच,
रायपुर / DR, ITAT, "SMC" Bench, Raipur.
6. गाड फ़ाइल / Guard File.
आदे शानुसार / BY ORDER,
// True Copy //
नजी स चव /Private Secretary
आयकर अपील य अ धकरण, रायपुर / ITAT, Raipur