TaxTMI 
TaxTMI 
2016 (9) TMI 1358
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....s on record, the Tribunal, vide order dated 18.07.2011 made in ITA No.638/Mds/2011 for the Assessment Year 2007-2008, disagreed with the finding of the Commissioner of Income Tax (Appeals), that the cost of acquisition in the hands of the assessee must be taken at Rs. 49,82,300/-. The Tribunal further held that the cost of acquisition must be taken at Rs. 24,00,000/- as adopted by the Assessing Officer and ordered hereunder: "7.......But, as the assessee has thereafter paid additional stamp duty and incurred other charges on the ground of underpayment of stamp duty, those amounts subsequently paid by the assessee should also be added to the amount of Rs. 24.00 Lakhs to arrive at the cost of acquisition. To this extent the assessee is entitled for the relief. Therefore we direct the assessing authority to refix the acquisition cost by adding the amount of Rs. 24 lakhs and the amount of additional stamp duty and expenses incurred by the assessee. But for this modification, the computation made by the assessing authority is upheld. 8. In the facts and circumstances of the case the order of the Commissioner of Income Tax (Appeals) on this point is vacated and the order of the Asses....
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.... H. Shah v. ACIT (91 ITD 101)(Ahd.). The time limit of four years to make rectification u/s.254(2) applies both to suo motu action of the Tribunal as well as to action taken by the parties on request. Being so, the MA is not maintainable, which is filed beyond time limit. Accordingly, this MA is dismissed." 7. Assailing the correctness of the order made in MA No.96/Mds/2015 in ITA No.638/Mds/2011, instant tax appeal is filed, on the following substantial question of law: "Whether on the facts and circumstances of the case the Hon'ble Income Tax Appellate Tribunal was right in law in rejecting the Miscellaneous Petition/Application filed under Order 25 of the Income Tax Tribunal Rules, 1963 read with under Section 254(2) of the Income Tax Act, 1961 for recall of the exparte order passed in ITA No.638/mds/2011 dated 18th July 2011 as barred by limitation taking into consideration the time taken for actual service of the Exparte order." 8. Inviting the attention of this court to Section 254 of the Income Tax Act, 1961, r/w Rule 25 of the Income Tax Appellate Tribunal Rules, 1963, Mr.J.Balachander, learned counsel for the appellant, submitted that whenever an ex-parte order is ....
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....371 Bom, Mr.M.Swaminathan, learned Standing Counsel for the Revenue submitted that even if an application for rectification is filed under Section 254(2) of the Act, 1961, the Tribunal can rectify its order, only within four years from the date of the order, which is sought to be rectified and in the case on hand, the very application for recalling the order filed under Section 254(2) of the Act has been filed beyond four years. For the above said reasons, he submitted that the order of the Tribunal dated 11.12.2015 made in MA No.96/mds/2015 in ITA No.638/mds/2011 does not call for any interference, and prayed for dismissal of the Tax Appeal. 12. Before adverting to the above contentions, let us have a cursory look at the provisions referred to by the learned counsel for the appellant. 13. Section 254 of the Income Tax Act, 1961 deals with the orders passed by the Tribunal and it reads as under: Orders of Appellate Tribunal. 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. (1A) [***] (2) The Appellate Tribunal may, at any time within six months from the end of the mon....
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....ixty-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. (3) The Appellate Tribunal shall send a copy of any orders passed under this section to the assessee and to the Principal Commissioner or Commissioner. (4) Save as provided in section 256 or section 260A, orders passed by the Appellate Tribunal on appeal shall be final. 14. Rule 24 of the Income Tax Appellate Tribunal Rules, 1963 deals with hearing of appeal exparte for default by the appellant. Hearing of appeal ex parte for default by the appellant. 24. Where, on the day fixed for hearing or on any other date to which the hearing may be adjourned, the appellant does not appear in person or through an authorised representative when the appeal is called on for hearing, the Tribunal may dispose of the appeal on merits after hearing the respondent : Provided that where an appeal has been disposed of as provided above and the appellant appears afterwards and satisfies the Tribunal that there was su....
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....ported in [2007] 295 ITR 466, the Supreme Court while dealing with the scope of rectification, held as follows: "As stated above, in this case we are concerned with the application under Section 254(2) of the 1961 Act. As stated above, the expression 'rectification of mistake from the record' occurs in Section 154. It also finds place in Section 254(2). The purpose behind the enactment of Section 254(2) is based on the fundamental principle that no party appearing before the Tribunal, be it an assessee or the Department, should suffer on account of any mistake committed by the Tribunal. This fundamental principle has nothing to do with the inherent powers of the Tribunal. In the present case, the Tribunal in its order dated September 10, 2003 allowing the rectification application has given a finding that Samtel Color Ltd. (supra) was cited before it by the assessee but through oversight it had missed out the said judgment while dismissing the appeal filed by the assessee on the question of admissibility/allowability of the claim of the assessee for enhanced depreciation under Section 43A. One of the important reasons for giving the power of rectification to the Tribunal ....
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....ITR 361 (Delhi) and the said line of decisions are also to be treated as not laying down the correct pro position of law that the Tribunal has no power to recall an order passed by it in exercise of power under Section 254(2) of the Act. (D) The Tribunal, while exercising the power of rectification under Section 254(2) of the Act, can recall its order in entirety if it is satisfied that prejudice has resulted to the party which is attributable to the Tribunal's mistake, error or omission and which error is a manifest error and it has nothing to do with the doctrine or concept of inherent power of review. (E) When the justification of an order passed by the Tribunal recalling its own order is assailed in a writ petition, it is required to be tested on the anvil of law laid down by the apex court in Honda Siel Power Products Ltd. [2007] 295 ITR 466 (SC) and Saurashtra Kutch Stock Exchange Ltd. [2008] 305 ITR 227 (SC)." 19. In Madanlal vs. State of UP and others reported in (1975) 2 SCC 779, the Hon'ble Apex Court held that the determination of the statutory period of limitation runs from the date of notice, actual or constructive, after the making of the order. 2....
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.... Act says is the time requisite for obtaining the copy being excluded from computing the period of limitation, or, in other words, as we have put it hereinabove, the time requisite for obtaining the copy being added to the prescribed period of limitation and treating the result of addition as the period prescribed. In adopting this methodology it does not make any difference whether the application for certified copy was made within the prescribed period of limitation or beyond it. Neither it is so provided in sub-section (2) of Section 12 of the Limitation Act nor in principle we find any reason or logic for taking such a view." 21. Even taking for granted that the judgments of the Apex Court are applicable to the case on hand and that the period of limitation of four years for filing an application for recalling an order filed under Section 254(2) of the Income Tax Act, 1961, has to be computed from the date of service of the order, averments made in the said petition, filed in the year 2015, are bereft of details, as to when the order was served in the address, where the office of the appellant is situated. Order of the Tribunal in ITA No.638/mds/2011, has been passed on....
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....ogs the work of the Court and impedes the work of the Court in considering legitimate grievances as also its normal work. We consider that the High Court was right in dismissing the appellant s petition as well as the appeal." (ii). In State of M.P. v. Bhailal Bhai reported in AIR 1964 SC 1006, the Supreme Court held that it is not either unreasonable delay denies to the petitioner the discretionary extraordinary remedy of mandamus, certiorari or any other relief. (iii). In State of M.P., v. Nandlal Jaismal reported in 1986 (4) SCC 566, the Supreme Court, at Paragraph 24, held as follows: "24. Now, it is well settled that the power of the High Court to issue an appropriate writ under Article 226 of the Constitution is discretionary and the High Court in the exercise of its discretion does not ordinarily assist the tardy and the indolent or the acquiescent and the lethargic. If there is inordinate delay on the part of the petitioner in filing a writ petition and such delay is not satisfactorily explained, the High Court may decline to intervene and grant relief in the exercise of its writ jurisdiction. The evolution of this rule of laches or delay is premised upon a....
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....r otherwise, is entitled to obtain the equitable relief under Article 226 of the Constitution if his conduct is blame-worthy because of laches, undue delay, acquiescence, waiver and the like. Moreover, how a citizen claiming discretionary relief under Article 226 of the Constitution against a State, could be relieved of his obligation to establish his unblameworthy conduct for getting such relief, where the State against which relief is sought is a welfare State, is also difficult to comprehend. Where the relief sought under Article 226 of the Constitution by a person against the welfare State is founded on its alleged illegal or wrongful executive action, the need to explain laches or undue delay on his part to obtain such relief, should, if anything, be more stringent than in other cases, for the reason that the State due to laches or undue delay on the part of the person seeking relief, may not be able to show that the executive action complained of was legal or correct for want of records pertaining to the action or for the officers who were responsible for such action not being available later on. Further, where granting of relief is claimed against the State on alleged unwarr....
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....stantially equitable. Two circumstances, always important in such cases, are, the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of Justice or injustice in taking the one course or the other, so far as it relates to the remedy." 21. Therefore, where a High Court in exercise of its power vested under Article 226 of the Constitution issues a direction, order or writ for granting relief to a person including a citizen without considering his disentitlement of such relief due to his blameworthy conduct of undue delay or laches in claiming the same, such a direction, order or writ becomes unsustainable as that not made judiciously and reasonably in exercise of its sound judicial discretion, but as that made arbitrarily." (v). In State of Rajasthan v. D.R.Laxmi reported in 1996 (6) SCC 445, the Supreme Court observed that though the order may be void, if the party does not approach the Court within a reasonable time, which is always a question of fact and have the order invalidated or acquiesced or waived, the discretion of the Court has to be exercised in a reasonable manner. (vi). In Chairm....
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....not be given a total go-by in the name of liberal approach. 21.10. (x) If the explanation offered is concocted or the grounds urged in the application are fanciful, the courts should be vigilant not to expose the other side unnecessarily to face such a litigation. 24. When we apply those principles to the case on hand, it has to be stated that the failure of the Respondents in not showing due diligence in filing of the appeals and the enormous time taken in the refiling can only be construed, in the absence of any valid explanation, as gross negligence and lacks in bonafides as displayed on the part of the Respondents. Further, when the Respondents have not come forward with proper details as regards the date when the papers were returned for refiling, the non-furnishing of satisfactory reasons for not refiling of papers in time and the failure to pay the Court fee at the time of the filing of appeal papers on 06.09.2007, the reasons which prevented the Respondents from not paying the Court fee along with the appeal papers and the failure to furnish the details as to who was their counsel who was previously entrusted with the filing of the appeals cumulatively considered, discl....