2009 (9) TMI 76

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....2008, in the case of CIT v. Smt. Preetha S. Nair (I.T.A. No. 72 of 2008). The appeal before the Tribunal was filed by the Revenue. The grievance of the Revenue was against the direction of the Commissioner of Income-tax (Appeals) in directing the assessing authority to exclude the processing charges from the total turnover for the purpose of computing deduction under section 80HHC of the Income-tax Act, 1961. The Tribunal in the light of the judgment of the hon'ble High Court of Kerala in I.T.A. No. 105 of 2000 dated February 13, 2003 delivered in the case of K. Raveendranathan Nair [2004] 265 ITR 35 held that the order of the Commissioner of Income-tax (Appeals) is sustainable in view of the above judgment where the High Court has held ....

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....pointed out that the order of the Tribunal was delivered on July 30, 2003. The law has prescribed a period of four years under section 254(2) to file a rectification petition from the date of the order sought to be rectified. If that is the case, the Revenue ought to have filed the rectification petition on or before July 30, 2007 whereas in the present case, the Revenue has filed petition only on October 20, 2008. The petition has been filed after a period of five years and it is manifestly clear that the petition is delayed. The learned chartered accountant relied on the judgment of the Jaipur Bench of the Rajasthan High Court in the case of Harshvardhan Chemicals and Minerals Ltd. v. Union of India [2002] 256 ITR 767 where the court h....

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..... ITAT [1988] 174 ITR 579 has held that subsequent decision of the Supreme Court constitutes a mistake apparent from record. This is on the reasoning that a binding decision rendered by a court is always retrospective and the decision, which is overruled, was never the law. The overruling decision should be deemed to have been in force even on the date when the orders sought to be rectified was passed. The subsequent binding decision of the Supreme Court or of the High Court has retrospective operation as in the case of subsequent rectification and overruling has always retrospective effect. Therefore, on the merit of the case, even if the side of the Revenue is so strong, the period of limitation prevents the Revenue from pursuing the m....