Income Tax Appellate Tribunal - Mumbai
Income Tax Officer 13(3)(4), Mumbai vs Shiv Kumar Daga, Mumbai on 25 October, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
"I" Bench, Mumbai
Before Shri B.R. Baskaran (AM)& Shri Pawan Singh (JM)
M.A. No. 186/Mum/2017 in
I.T.A. No. 4656/Mum/2009 (Assessment Year 2003-04)
M.A. No. 187/Mum/2017 in
I.T.A. No. 4655/Mum/2009 (Assessment Year 2006-07)
M.A. No. 188/Mum/2017 in
I.T.A. No. 7790/Mum/2010 (Assessment Year 2007-08)
ITO 13(3)(4) Shri Shiv Kumar Daga
New I TO 17(3)(3) Vs. By Legal Heir Sushma S. Daga
Aayakar Bhavan 324, Umerigar Building
M.K. Road 3 r d Floor, Opp. Carwford
Mumbai-400 020. Market, Carnac Road
Mumbai-400 003.
PAN : AFOPD5166P
(Appellant) (Respondent)
Assessee by Shri Sudhir Mehta
Department by Ms. Arju Garodia
Date of Hearing 13.10.2017
Date of Pronouncement 25.10.2017
ORDER
Per B.R. Baskaran (AM) :-
These Miscellaneous Applications have been filed by the Revenue seeking recall of the order dated 29.11.2013 passed in I.T.A. No. 4656/Mum/2009, I.T.A. No. 4655/Mum/2009 & I.T.A. No. 7790/Mum/2010 relating to A.Y. 2003-04, 2006-07 & 2007-08 respectively. In these Miscellaneous Applications, the Revenue has pointed out that the issue relating to applicability of provisions of section 45(2) of the Act, even though urged by the Revenue in its grounds of appeal, was not adjudicated by the Tribunal. Accordingly, it has been prayed that the order may be recalled in order to adjudicate the issue relating to applicability of provisions of section 45(2) of the Act to the transactions carried on by the assessee.2
Sh r i S h i v K u m a r D a g a B y L e g a l H e ir S us h m a S . D a g a
2. These Miscellaneous Applications have been filed on 7.4.2017 against the order passed by the Tribunal on 29.11.2013.
3. Learned AR, at the outset, objected to the petition filed by the Revenue on the ground that these applications are barred by limitation. Learned AR submitted that the provisions of section 254(2) of the Act originally provided a time limit of four years from the date of the order for rectifying the order passed by the Appellate Tribunal. However, Finance Act, 2016 has amended the provisions of section 254(2) w.e.f. 1.6.2016 whereby the Appellate Tribunal has been empowered to rectify the order only within six months from the end of the month in which the order was passed. Learned AR contended that the amended provisions shall apply to the petitions filed by the Revenue and since these petitions have been filed beyond the period of six months, as provided in the amended provisions, they are barred by limitation. In this regard, he placed reliance on the order passed by the Bangalore Bench of the Tribunal in the case of Smt. Padma K. Bhat Vs. ACIT (166 ITD 172).
4. On the contrary, learned Departmental Representative submitted that the impugned order has been passed by the Tribunal on 29.11.2013 when old law prescribing the period of four years was available in the Statute. Accordingly, learned Departmental Representative submitted that these Miscellaneous Applications have been filed within the period of four years from the date of the order and hence they are not barred by limitation.
5. We heard the parties on this limitation issue. It was informed to the parties at the time of hearing that the Bench may follow the decision rendered by the Bangalore Bench of the Tribunal in the above cited case. After conclusion of the hearing, it came to the notice of the Bench that Hon'ble Madhya Pradesh High Court has decided an identical issue in the case of District Central Co-op. Bank Ltd. Vs. Union of India (2017) 86 taxamnn.com 176 (MP). Hence both the parties were given opportunity to advance arguments on this issue.
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6. Learned Departmental Representative placed reliance on the order passed by Hon'ble Madhya Pradesh High Court and learned AR filed written submissions supporting the stand of the assessee.
7. Learned AR, in the written submission, has taken the view that right to make an application for rectification is not substantive right, but procedural only. Learned AR has further placed reliance on the decision rendered by Hon'ble Supreme Court in the case of Vinod Gurudas Raikar Vs. National Insurance Co. Ltd. (1991) 4 SCC 333, wherein it has been held by Hon'ble Supreme Court as under :-
7. It is true that the appellant earlier could file an application even more than six months after the expiry of the period of limitation, but can this be treated to be a right which the appellant had acquired. The answer is in the negative. The claim to compensation which the appellant was entitled to, by reason of the accident was certainly enforceable as a right. So far the period of limitation for commencing a legal proceeding is concerned, it is adjectival in nature, and has to be governed by the new Act-subject to two, conditions. If under the repealing Act the remedy suddenly stands barred as a result of a shorter period of limitation, the same cannot be held to govern the case, otherwise the result will be to deprive the suitor of an accrued right. The second exception is where the new enactment leaves the claimant with such a short period for commencing the legal proceeding so as to make it impractical for him to avail of the remedy. This principle has been followed by this Court in many cases and by way of illustration we would like to mention New India Insurance Co. Ltd. v. Smt. ShantiMisra, [1976] 2 SCR 266. The husband of the respondent in that case died in an accident in 1966. A period of two years was available to the respondent for instituting a suit for recovery of damages. In March, 1967 the Claims Tribunal under section 110 of the Motor Vehicles Act, 1939 was constituted, barring the jurisdiction of the civil court and prescribing 60 days as the period of limitation. The respondent filed the application in July, 1967. It was held that not having filed a suit before March, 1967 the only remedy of the respondent was by way of an application before the Tribunal. So far the period of limitation was concerned, it was observed that a new law of limitation providing for a shorter-period cannot certainly extinguish a vested right of action. In view of the change of the law it was held that the application could be filed within a reasonable time after the constitution of the Tribunal; and, that the time of about four months taken by the respondent in approaching the Tribunal after its constitution, could be held to be either reasonable time or the delay of 4 Sh r i S h i v K u m a r D a g a B y L e g a l H e ir S us h m a S . D a g a about two months could be condoned under the proviso to section 110A(3).
8. We heard the parties on this preliminary issue. We noticed that Hon'ble Madhya Pradesh High Court has considered effect of amendment carried out in the provisions of section 254(2) of the Act, whereby period of limitation was reduced to six months. We noticed that Hon'ble Madhya Pradesh High Court has considered the decision rendered by Hon'ble Supreme Court in the case of M.P. Steel Corporation Vs. Commissioner of Central Excise (2015) 7 SCC 58.
We also noticed that Hon'ble Supreme Court has also considered the decision rendered by it in the case of Vinod Gurudas Raikar (supra)( on which learned AR had placed his reliance). After considering the decisions rendered by Hon'ble Supreme Court, the Hon'ble Madhya Pradesh High Court has held that new law of limitation providing shorter period cannot certainly extinguish vested right of action. Accordingly, Hon'ble Madhya Pradesh High Court held that applications preferred by the assessee should not have been dismissed by the Tribunal on account of amendment which has reduced period of limited of four years to six months.
9. In view of the decision rendered by Hon'ble Madhya Pradesh High Court, a higher forum in the judicial hierarchy, we are inclined to follow the same. Accordingly, we hold that Miscellaneous Applications filed by the Revenue are within the period of limitation of four years as provided in the pre-amended law and accordingly we admit them.
10. Since there is no dispute with regard to the fact that the Tribunal did not adjudicate the issue relating to applicability of section 45(2) of the Act, we recall the impugned order for the limited purpose of disposing the said issue. The Registry is directed to post the appeals for hearing in the normal course under intimation to the parties.
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11. In the result, all the three Miscellaneous Applications filed by the Revenue are allowed.
Order has been pronounced in the Court on 25.10.2017.
Sd/- Sd/-
(PAWAN SINGH) (B.R.BASKARAN)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Mumbai; Dated : 25/10/2017
Copy of the Order forwarded to :
1. The Appellant
2. The Respondent
3. The CIT(A)
4. CIT
5. DR, ITAT, Mumbai
6. Guard File.
BY ORDER,
//True Copy//
(Asstt. Registrar/Senior PS)
PS ITAT, Mumbai