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Income Tax Appellate Tribunal - Jaipur

Chandra Mohan Garg, Hindaun City vs Ito, Sawai Madhopur on 24 August, 2020

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 IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR

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BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM

                                  M.A. No. 55/JP/2018
                    (Arising out of ITA No. 1021/JP/2016)
                    fu/kZkj.k o"kZ@Assessment Years : 2009-10

Sh. Chandra Mohan Garg                     cuke     The ITO,
C/o M/s Garg Agencies                      Vs.      Ward-03,
Todabhim                                            Sawai Madhopur
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AIYPG76420Q
vihykFkhZ@Appellant                               izR;FkhZ@Respondent

           fu/kZkfjrh dh vksj l@
                               s Assessee by : Sh. P. C. Parwal (CA)
            jktLo dh vksj ls@ Revenue by : Smt. Rumi Pal (JCIT)

          lquokbZ dh rkjh[k@ Date of Hearing       : 21/08/2020
          mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 24/08/2020

                                vkns'k@ ORDER

PER: VIKRAM SINGH YADAV, A.M. The present miscellaneous application has been filed by the assessee against the order passed by the Co-ordinate Bench decision in ITA No. 1021/JP/2016 dated 20/06/2017.

2. At the outset, it is noted that order was passed by the Co-ordinate Bench decision on 20/06/2017 and the miscellaneous application has been filed by the assessee on 02.05.2018 which is beyond the limitation period as provided u/s 254(2) of the Act.

Sh. Chandra Mohan Garg vs. ITO, Sawaimadhopur

3. In this regard, the ld. AR submitted that there is no dispute that the order has been pronounced by the Tribunal on 20.06.2017. However, order so passed by the Tribunal has not been received by the assessee and therefore, miscellaneous application could not be filed by the assessee within the stipulated time period provided u/s 254(2) of the Act. Subsequently, when the assessee came to know about the passing of the order, the assessee has moved the present miscellaneous application and the same may be admitted and the order so passed by the Tribunal may be recalled.

4. The ld. DR has objected to the misc. application so filed by the assessee and stated that in the present case, the order has been passed on the same day the matter was heard by the Tribunal and subsequently dispatched by the Registry at the given address and nothing has been brought on record which suggest that the order so dispatched by the Registry has been returned back unserved. Further, referring to the provisions of section 254(2) of the Act, the ld DR submitted that there is no provision under law wherein the delay in filing the Misc. Application can be condoned by the Tribunal and the same is the consistent position of this Bench and accordingly, the misc. application so filed may be dismissed being barred by limitation.

5. Heard the rival contentions and purused the material available on record. In this regard, on perusal of the records, we find that the matter was fixed for hearing on 20.06.2017 and after hearing the Counsel of the assessee and the ld DR, the order was pronounced by the Co-ordinate Bench on the very same date and was dispatched by the Registry at address given by the assessee in Form No. 36 on 06.07.2017 through 3 M.A. No. 55/JP/2018 Sh. Chandra Mohan Garg vs. ITO, Sawaimadhopur registered AD. There is nothing available on record which suggest that the order so dispatched at given address has been returned back unserved by the postal department. Therefore, it is a case where the matter has been pronounced in the open Court on the same day it was heard and thereafter, the order was dispatched and duly delivered to the assessee. It is also a fact that the order has also been uploaded on the Tribunal's website as soon as the same was pronounced. Therefore, the contention advanced by the ld. AR that the order passed by the Coordinate Bench has not been received by the assessee cannot be accepted. The provisions of section 254(2) has prescribed the limitation period of six months of moving the application from the end of the month in which the order is passed, therefore, the present miscellaneous application filed belatedly is not maintainable. The limitation period is provided in the Act itself and there is no provision for condonation of delay, if any, in filing the miscellaneous application and consequently, the Tribunal has no jurisdiction/power to condone the delay in filing the miscellaneous application. The Tribunal has taken a consistent view on this issue and in case of Shri Vinod Kumar Singh vs. ITO in M.A. No. 12/JP/2018, the Coordinate Bench of this Tribunal vide order dated 06.02.2018 has considered an identical issue of delay in filing the miscellaneous application and maintainability of such application in para 4 as under :-

"4. Having considered the rival submissions as well as relevant material on record we note that the certified copy of the impugned order was issued and send to the assessee on 21.04.2017. We further note that the assessee provided address for communication in the form No. 36 as the address of the counsel who was authorized and representing the assessee in the appeal. The 4 M.A. No. 55/JP/2018 Sh. Chandra Mohan Garg vs. ITO, Sawaimadhopur assessee now come up with the plea that the assessee has taken the certified copy only on 08.09.2017 which is only another copy of the impugned order provided to the assessee on his request. However, once the order was duly send to the assessee at the given address then, this plea of the assessee cannot be accepted. Undisputedly the present miscellaneous application has been filed by the assessee beyond the period of 6 months from the end of the month in which the impugned order was passed. Thus, in the absence of any provision u/s 254(2) or any other provisions of the Income Tax Act to condone the delay in filing the miscellaneous application we do not find any substance in the plea of the assessee to condone the dely. The Coordinate Bench of this Tribunal has considered an identical issue of maintainability of the miscellaneous application filed beyond the period of limitation in case of ITO vs. Shri Ram Ratan Modi in MA No. 93/JP/2017 vide order dated 27.12.2017 as has in para 3 as under:-

"3. We have considered the rival submissions as well as relevant material on record. We note that the present miscellaneous petition was filed by the Revenue for recalling of the order dated 18.12.2015 and therefore, as per un- amended provisions of Section 254(2) of the Act, the limitation period provided for rectification of the mistake was 4 years from the date of order. However, the provisions of Section 254(2) has been amended by the Finance Act, 2016 w.e.f. 01.06.2016 providing the limitation period for rectification of mistake as 6 months from the end of the month in which the order is passed. For ready reference, we quote section 254(2) as under:-

"(2) The Appellate Tribunal may, at any time within 72[six months from the end of the month in which the order was passed], with a view to rectifying any mistake apparent 5 M.A. No. 55/JP/2018 Sh. Chandra Mohan Garg vs. ITO, Sawaimadhopur from the record73, amend any order passed by it under sub-

section (1), and 73shall make such amendment73 if the mistake is brought to its notice by the assessee or the 74[Assessing] Officer :

Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub-section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard :

[Provided further that any application filed by the assessee in this sub-section on or after the 1st day of October, 1998, shall be accompanied by a fee of fifty rupees.] 76 [(2A) In every appeal, the Appellate Tribunal, where it is possible, may hear and decide such appeal within a period of four years from the end of the financial year in which such appeal is filed under sub-section (1) 77[or sub-section (2)] 78[***] of section 253 :

[Provided that the Appellate Tribunal may, after considering the merits of the application made by the assessee, pass an order of stay in any proceedings relating to an appeal filed under sub-section (1) of section 253, for a period not exceeding one hundred and eighty days from the date of such order and the Appellate Tribunal shall dispose of the appeal within the said period of stay specified in that order:

Provided further that where such appeal is not so disposed of within the said period of stay as specified in the order of stay, the Appellate Tribunal may, on an application made in this behalf by the assessee and on being satisfied that the delay in disposing of the appeal is not attributable to the assessee, extend the period of stay, or pass an order of stay for a further period or periods as it thinks fit; so, however, that the aggregate of the period originally allowed 6 M.A. No. 55/JP/2018 Sh. Chandra Mohan Garg vs. ITO, Sawaimadhopur and the period or periods so extended or allowed shall not, in any case, exceed three hundred and sixty-five days and the Appellate Tribunal shall dispose of the appeal within the period or periods of stay so extended or allowed:

[Provided also that if such appeal is not so disposed of within the period allowed under the first proviso or the period or periods extended or allowed under the second proviso, which shall not, in any case, exceed three hundred and sixty-five days, the order of stay shall stand vacated after the expiry of such period or periods, even if the delay in disposing of the appeal is not attributable to the assessee.]] (2B) The cost of any appeal to the Appellate Tribunal shall be at the discretion of that Tribunal."

Thus, by Virtue the amendment in the provisions of Section 254(2) of the Act w.e.f. 01.06.2016 the time period within which the mistake apparent from record can be rectified has been reduced from 4 years 6 months. There is no quarrel on the point that this amendment in Section 254(2) cannot be given effect retrospectively so as to take way of right of the parties to file the application of rectification. The Hon'ble M.P. High Court in case of District Central Cooperative Bank Ltd. Vs. Union of India(supra) has observed in paras 9 and 10 as under:-

" 09- The amendment has been made effective virtually in case of assessee with retrospective effect though the amendment does not show that it is applicable with respective effect, however, the existing right has been extinguished with retrospective effect in case of the assessee.

10- In the considered opinion of this Court, the legislature should have granted some time to the assessees who could have filed an appeal within a period of fours and the some has not been done till the amendment came into force extinguishing the right to file an appeal."

Sh. Chandra Mohan Garg vs. ITO, Sawaimadhopur Therefore, the Hon'ble High Court has observed that the amendment in the said provisions is not applicable with retrospective effect otherwise it would extinguish the right of the applicant with retrospective effect. Hence, to the extent of the applicability of the amendment prospectively we do agree with the ld. DR, however since the amendment came into forced w.e.f. 01.06.2016 then after the substitution of the provision w.e.f. 01.06.2016 the limitation period for rectification of mistake would be available only up to 6 months from the end of the month in which the order was passed. In the case in hand since the order was passed prior to the amendment, therefore, the said period of limitation will be available to the assessee from the date of amendment i.e. on 01.06.2016 for a period 6 months. Thus, the present miscellaneous petition filed by the Revenue on 22.05.2017 is beyond the period of limitation which has expired on 30.11.2016. We may clarify that in case the impugned order is prior to the amendment w.e.f. 01.06.2016 then the limitation period of 6 months would reckon from 01.06.2016 so that the right of the applicant is not curtail by the subsequent amendment. We further, note that the Bangalore Benches of this Tribunal in case of Smt. Padma K. Bhat vs. ACIT 166 ITD 172 had the occasion to consider an identical issue and one of us the Judicial Member is party to the said order and held in paras 5 to 8 as under:-

"5. We have considered the above submissions and carefully perused the relevant record. The assessee has filed this miscellaneous petition on 10.03.2017 for recalling of order of the Tribunal dated 04.01.2016. The provision of rectification of mistake apparent from record is provided under section 254(2) as under:

"254. (1) The Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit 46.

Sh. Chandra Mohan Garg vs. ITO, Sawaimadhopur (1A) 48[***] (2) The Appellate Tribunal may, at any time within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the [Assessing] Officer:

Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub-section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard:

[Provided further that any application filed by the assessee in this sub-section on or after the 1st day of October, 1998, shall be accompanied by a fee of fifty rupees.]"

6. The time period within which the mistake apparent from record can be rectified has been reduced from 4 years to 6 months by the amendment vide Finance Act, 2016 w.e.f. 01.06.2016. Thus after the substitution of this provision w.e.f. 01.06.2016, the limitation period for rectification of mistake apparent from record is provided only for 6 months from the end of the month in which the order was passed. In the case in hand, the impugned order was passed by the Tribunal on 04.01.2016 and after the amendment in section 254(4) w.e.f. 01.06.2016, these miscellaneous petition was required to be filed before 31.07.2016. Prior to the amendment, the limitation was provided as 4 years for rectification of mistake apparent from record and therefore there was no provision in the Income-tax Act for condonation of any delay of any petition for rectification of mistake filed after the said period of 4 years. Even otherwise, the limitation of 4 years was more than the limitation for filing of the suit and as per the general statute i.e., the Limitation Act where the limitation for institution of suit is provided as 3 years onwards from the date of cause of action arose and therefore there was no provision even in the Limitation Act for 9 M.A. No. 55/JP/2018 Sh. Chandra Mohan Garg vs. ITO, Sawaimadhopur condonation of delay in respect of delay in filing the suit. Since the limitation for rectification of mistake is provided in the Income-tax Act itself, therefore the provisions of Limitation Act are not applicable so far as the limitation provided in the Income-tax Act.

This principle is well settled that when there is a provision in special statute, then the general statute is not applicable to the extent of the provision provided in the special statute. We find that prior to the amendment the limitation for rectification of mistake was 4 years as provided under section 254(2) and therefore there was no question of providing any provision or power to the Income Tax Appellate Tribunal to condone the delay after the expiry of such 4 years of limitation. However, in the amended provisions of the Act under section 254(2), the limitation for rectification of mistake apparent from the record has been drastically reduced from 4 years to 6 months and in case of a delay in applying for rectification of mistake apparent from record, the party who is aggrieved by the order of this Tribunal suffering from mistake will be subjected to a great hardship and deprivation of valuable right of pursuing the appeal before the Tribunal. But in the absence of any provision giving power or jurisdiction to this Tribunal to condone the delay in filing the petition for rectification of the mistake apparent from the record, the Tribunal has no option but to proceed strictly as per the provisions as provided in the statute.

7. We have no doubt in our mind that there is an apparent mistake in the order dated 04.01.2016 as the Tribunal has not decided the appeals of the assessee on merit but dismissed the same in limine for want of prosecution. However, the question of rectification of mistake cannot be entertained until and unless the Miscellaneous Petition filed by the assessee is found to be maintainable. The miscellaneous petition filed by the assessee is beyond the period of 6 months from 04.01.2016 and therefore the same is barred by limitation. In the absence of any provision to condone the delay under the Income-tax Act, it may be a case of omission in the provision of Act which cannot be supplied by us when there is no ambiguity in the provisions of section 254(2) of the Act. The Hon'ble Bombay High Court in the case of Bharat Petroleum Corpn.

Sh. Chandra Mohan Garg vs. ITO, Sawaimadhopur Ltd. v. ITAT [2013] 359 ITR 371/[2014] 42 taxmann.com 25, while dealing with an identical issue has held in paras 16 to 18 as under:

"16. It was next contended on behalf of the petitioner that the power of the Tribunal under section 254(2) of the Act is only to rectify an error apparent from the record. It does not empower the Tribunal to recall its earlier order dated December 6, 2007, for which the miscellaneous application was filed on August 6, 2012. It was submitted on behalf of the petitioner that the application under section 254(1) of the Act would be the only provision under which an application could be made for recall of an order, as under section 254(2) of the Act only the order can be rectified but cannot be recalled. We find that there is an error apparent on record and the miscellaneous application is to correct the error apparent from the record. The consequence of such rectification application being allowed may lead to a fresh hearing in the matter after having recalled the original order. However, the recall, if any, is only as a consequence of rectifying the original order. It is pertinent to note that section 254(2) of the Act does not prohibit the recall of an order. In fact the power/jurisdiction of the Tribunal to recall an order on rectification application made under section 254(2) of the Act is no longer res integra. The issue stands covered by the decision of the apex court in Asstt. CIT v. Saurashtra Kutch Stock Exchange Ltd. [2008] 305 ITR 227 which held that though the Tribunal has no power to review its own order, yet it has jurisdiction to rectify any mistake apparent on the face of the record and as a consequence, therefore, the Tribunal can even recall its order. In the above case, before the apex court on October 27, 2000, the Tribunal dismissed the appeal of stock exchange holding that it was not entitled to exemption under section 11 read with section 12 of the Act. On November 13, 2000, the stock exchange filed a rectification application under section 254(2) of the Act before the Tribunal. The Tribunal by its order dated September 5, 2001, allowed the application and held that there was a mistake apparent on the record which required rectification. Accordingly, the Tribunal recalled its order dated October 27, 2000, for the purpose of entertaining the appeal afresh. The Revenue filed a writ petition in the Gujarat High Court challenging the order dated September 5, 2001. The above 11 M.A. No. 55/JP/2018 Sh. Chandra Mohan Garg vs. ITO, Sawaimadhopur challenge by the Revenue was turned down by the Gujarat High Court. The Revenue carried the matter in appeal to the apex court which also dismissed the appeal of the Revenue. The apex court observed that the Tribunal in its original order while dismissing the stock exchange (assessee's) appeal overlooked the binding decisions of the jurisdictional High Court. This mistake was corrected by the Tribunal under section 254(2) of the Act. The Supreme Court held that the rectification of an order stands on the fundamental principle that justice is above all and upheld the exercise of power under section 254(2) of the Act by the Tribunal in recalling its earlier order dated October 27, 2000. Thus, recall of an order is not barred on rectification application being made by one of the parties. In these circumstances, the application would be an application for rectification of the order dated December 6, 2007, and would stand governed by section 254(2) of the Act.

17. In the facts of the present case there can be no denial that the order dated December 6, 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 the merits after hearing the respondents. In these circumstances, an application for rectification would be 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 the 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 competent tribunal. In fact, the apex court in the Sultan Sadik v. Sanjay Raj Subba reported in [2004] 2 SCC 377 observed as under: "Patent and 12 M.A. No. 55/JP/2018 Sh. Chandra Mohan Garg vs. ITO, Sawaimadhopur latent invalidity In a well known passage Lord Radcliffe said: 'An order, even if not made in good faith, is still an act capable at 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 the court." Further, the Supreme Court in Sneh Gupta v. Devi Sarup [2009] 16 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 the 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 December 6, 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 :

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.

Question (c) : Does not arise in view of our response to query (b) above.

20. In view of the reasons given hereinabove, we find the Tribunal 13 M.A. No. 55/JP/2018 Sh. Chandra Mohan Garg vs. ITO, Sawaimadhopur was correct in dismissing the miscellaneous application by its order dated April 10, 2013, as being beyond the period of four years as provided under section 254(2) of the Act.

21. Accordingly, the petition is dismissed with no order as to costs."

8. In view of the facts and circumstances of the case as well as the decision of the Hon'ble Bombay High Court in the case of Bharat Petroleum Corpn. Ltd. (supra), we hold that the miscellaneous petition filed by the assessee are beyond the period of limitation as provided under section 254(2) and are not maintainable. Accordingly the same is dismissed being barred by limitation." Accordingly, in view of the above facts and circumstances as discussed in foregoing paras as well as the decision of the Bangalore Benches of the Tribunal (supra) the miscellaneous petition filed by the Revenue on 22.05.2017 is beyond the period of limitation expired on 30.11.2016 and according the same is not maintainable."

Accordingly, in view of the facts and circumstances of the case when the miscellaneous application is barred by limitation and following the earlier order of this Tribunal in case of ITO vs. Shri Ram Ratan Modi (Supra) we dismissed the miscellaneous application as not maintainable being barred by limitation."

Accordingly, when there is no provision for condonation of delay for filing of the miscellaneous application, then the miscellaneous application filed belatedly is not maintainable being barred by limitation provided under section 254(2) of the Act.

In the result, miscellaneous application so filed by the assessee is dismissed.

Sh. Chandra Mohan Garg vs. ITO, Sawaimadhopur Order pronounced in the Open Court on 24/08/2020.

               Sd/-                                           Sd/-
        ¼fot; iky jko½                                 ¼foØe flag ;kno½
       (Vijay Pal Rao)                          (Vikram Singh Yadav)
U;kf;d lnL;@Judicial Member              ys[kk lnL;@Accountant Member

Tk;iqj@Jaipur
fnukad@Dated:- 24/08/2020.
*Ganesh Kr.

vkns'k dh izfrfyfi vxzfs 'kr@Copy of the order forwarded to:

1. vihykFkhZ@The Appellant- Sh. Chandra Mohan Garg, Todabhim

2. izR;FkhZ@ The Respondent- ITO, Ward-03, Sawaimadhopur

3. vk;dj vk;qDr@ CIT

4. vk;dj vk;qDr@ CIT(A)

5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur.

6. xkMZ QkbZy@ Guard File {M.A No. 55/JP/2018} vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar