TaxTMI 
TaxTMI 
2019 (4) TMI 1307
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....assessee in this M.A. are as follows: "Application under Sec.254 (2) of Income Tax Act, 1961: 1.1 This application is filed by the applicant company under Sec.254(2) of the LT Act, '61 seeking rectification of certain mistakes apparent from the record that have crept into the order of the Hon'ble Income Tax Appellate Tribunal in its order in LT A No.546/Hyd/2017 dated 29-11-2017. 2.1 Aggrieved by the decision of the C.IT (Appeals), the applicant filed appeal before the Hon'ble I.T.A.T. Five grounds of appeal were raised by the applicant in the appeal. Ground No.2 to 4 raised by the applicant read as under: "2. Commissioner of Income Tax (Appeals)-8 grossly erred in holding that the contention of the Appellant that the time limit of 4 years for completion of proceedings u/s.201(1) and 201(1A) of the Act is required to be counted from the date of occurrence of default is not based on interpretation of statute. Commissioner of Income Tax (Appeals)-8 ought to have seen that no time limit was provided in the Act for completion of proceedings u/s.201(1) & 201(1A) at the relevant time when the alleged default had occurred. It is only later that a provision was introduc....
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....e which forms the first sentence in paragraph 6 of the Appellate Tribunal's order makes this clear. "As regards ground of appeal No.2, we find that it is on the question of time limit for initiation of proceedings u/s.201(1) of the Act." 2.3 In fact the entire decision on ground No.2(vide paragraphs 6 and 7 of the order) does not even contain a reference to Sec.201(1A) whereas ground No.2 raised by the applicant challenges the decision of the Commissioner of Income Tax (Appeals) that the order levying interest u/s.201(1A) is within the time limit. The last sentence in ground No.2, which reads as under, makes this very clear. "Hence Commissioner of Income Tax (Appeals)-8 is not justified in holding that interest levied u/s.201(1A) is within the time limit." 2.4 The applicant submits that a mistake apparent from record has crept into the order of the Hon'ble Appellate Tribunal, in that, the Hon'ble Appellate Tribunal has not adjudicated upon the specific ground taken by the applicant as above. 2.5 Paragraph 8 of the Hon'ble Appellate Tribunal's order dealt with the issue of chargeability of interest u/s.201(lA). The gist of the finding is that the provis....
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....e delay. Though the assessee's appeal was dismissed, the revenue apprehended that ITAT's order may prevent the A.O from passing the consequential order and hence filed appeal before the High Court. The Hon'ble Delhi High Court, inter alia, held (in page 5 of its order) that it was of the view that where no period of limitation is prescribed, then, in any event, a reasonable period of limitation ought to be adopted and in the light of the time allowed by C.I.T, three years and eight months was certainly much beyond the reasonable period that could be allowed to the A.O to pass the order. In paragraph 4 of the order on page 5, the Hon'ble High Court held that even if there is no period of limitation prescribed under Section 153(3)(ii) of the Act, the Assessing Officer was required to pass the order within reasonable period and non-specification of period of limitation would not mean that Assessing Officer can wait for indefinite period. This is a case where the principle that action should be taken within reasonable period has been reiterated and about 3 years and eight months has been held as beyond reasonable period. 3.3 The Applicant also relied upon the decisi....
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....where no period of limitation is prescribed, statutory authority must exercise jurisdiction within reasonable period, say 3 or 5 years. 3.6 The Applicant also relied upon the decision of Hon'ble High court of Delhi in the case of CIT vs NHK Japan Broadcasting Corpn 172 Taxmann 230 Delhi High Court (Paper book pages 51 to 54) In the said case, the High Court held that where no limitation is prescribed, as in Sec.201, action must be initiated by the competent authority under the Act within a period of four years. The Court also held that date of knowledge is not relevant for purposes of exercising jurisdiction in so far the provisions of the Act are concerned and also that acceptance of liability by assessee would not, by itself, extend period of limitation nor would it extend reasonable time. 3.7 The applicant also cited the decision of Hon'ble Supreme Court in the case of State of Punjab & others vs Bhatinda District.Coop. Milk Producers Union Ltd.ll SCC 363 SC (Paper book pages 55 to 59) wherein Hon'ble Supreme court held 'it is trite that if no period of limitation has been prescribed, statutory authority must exercise its jurisdiction within a reasonable peri....
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....bviously, sub-section (3) refers to time limit for deeming a person to be "an assessee in default" for failure to deduct the whole or any part of the tax from a resident in India. Thus, though there is no elaborate discussion about the same, the Tribunal has considered and given a finding on the same. The assessee's contention that it had placed reliance on various decisions (which are also referred to in the MA) and that the Tribunal has omitted to consider the same appear to be correct because there is no reference or discussion about the same in the order. But does that make the order erroneous?. The learned Counsel for the assessee has relied upon the decision of the Hon'ble Gujarat High Court in the case of Subodh Chandra S Patel, reported in 138 Taxmann 185 (Gu.) High Court in which it was held that non-consideration of jurisdictional High Court or Apex Court would always constitute a mistake apparent from record and the Tribunal in exercise of powers u/s 254(2) can rectify it. The other decision relied upon by the learned Counsel for the assessee is the decision of the Coordinate Bench of the Tribunal at Ahmedabad in the case of Pyramid Plastics in M.A. No.147/Ahd/2012,....
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....1(1) of the Act." 2.4 In support of ground No.2 [ground Nos.2(a) and 2(b) in concise grounds] the applicant relied upon decisions of various judicial authorities, copies of which have been filed before the Hon'ble I.T.A.T in the form of paper books. 3.1 Hon'ble I.T.A.T recorded its findings and decision in paragraph 13 in its order which is reproduced here under: "Having regard to the rival contentions and the material on record/ we find that the requirement to make the payment and the genuineness of the payment of non-compete fee by the assessee to Shri Ramoji Rao (HUF) has been adjudicated by the Tribunal in the assessee's own case for A. Y 2008-09 and the contention of the assessee that the non-compete fee is the business expenditure of the assessee has been upheld. The assessee has always contended that it is its business expenditure and therefore/ it was required to deduct tax at source u/s.194J of the Act. For failure to deduct tax inspite of being liable to do so/ the penalty u/s.271C is clearly leviable. Though the learned counsel for the assessee has placed reliance on various case law/ we find that these cases are distinguishable on facts. In view of t....
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.... Hon'ble I.T.A.T may kindly rectify the mistake apparent from its order. OMISSION TO CONSIDER THE RATIO OF DECIDED CASES CITED BY THE APPLICANT: 5.1 The Hon'ble Tribunal recorded (in paragraph 13) "though the Learned Counsel for the assessee has placed reliance on various case law, we find that these cases are distinguishable on facts." In this connection the applicant submits as under: 5.2 In ground NO.2 of the grounds of appeal [Ground Nos.2(a) and 2(b) of concise grounds of appeal] the applicant contested the decision of C.I.T (Appeals) who held that the penalty imposed is within the time limit. The applicant contested the finding and pleaded that where there is no time limit stipulated in the statute, proceeding should be initiated within reasonable time and that in the case of the applicant, initiation of proceedings was done after a lapse of more than 6 and % years and that in the light of the ratio of decided cases relied on by the applicant, the proceedings initiated under Sec.271C ought not to have been upheld by the learned C.I.T (Appeals). 5.3 The Applicant relied upon the decision of Hon'ble Delhi High Court in the case of C,I.T vs Goyal M,G Gases (I....
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.... Hon'ble High Court held that the I.T.A.T was justified in roping in the theory of reasonable period for passing orders u/s.201(lA) of the Act and also that inspite of continuous breach and default, the finding of the Hon'ble I.T.AT that levy of interest u/s.201(lA) cannot be said to be within reasonable time is legal and valid. 5.5 Applicant also relied upon the decision of Hon'ble I.T.AT, "A" Bench Hyderabad in the case of ACIT Vs Good Health Plan Ltd., (ITA. No.155/Hyd/2013 dated 22-01-2014. (Paper book pages 19 to 34) In this case the assessee pleaded that since the assessee was not treated as in default u/s.201(l), there was no scope for levy of penalty u/s.271C Assessee pleaded that penalty was only consequential in nature and when there is no amount in default, the possibility of imposing penalty will automatically be ruled out. Hon'ble I.T.A.T recorded that AD has not treated the assessee as in default/s.201(l) and when the A.O himself treated the assessee as not in default in respect of amount of TDS to be deducted, then there cannot be any scope for levying any penalty u/s.271C The Hon'ble I.T.A.T also recorded that the recipient has paid the tax on ....
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.... concluded the issue, in C.I.T vs NHK Japan Broadcasting Corpn., 305 ITR 137 DEL and C.I.T vs Hutchinson Esssar Telecom Ltd., 323 ITR 230 DEL, by holding that where no limitation was prescribed, four years was the foundational requisite for initiation of proceedings u/s.201. In paragraph 6 of the judgment, the Court, following earlier judgments, (supra) held that the power to treat the assessee as in default was too drastic and the A.O has to act within 4 years. The Court also referred to another decision in the case of State of Punjab vs Bhatinda Dist Co-Op Milk producers union Ltd., (2007) 9 RC 637 [(2007) 11 SCC 363 Se] and held in paragraph 6, (sub para 17 and 18) that where no period of limitation is prescribed, statutory authority must exercise jurisdiction within reasonable period, say 3 or 5 years. 5.8 The Applicant also relied upon the decision of Hon'ble High court of Delhi in the case of CIT vs NHK Japan Broadcasting Corpn 172 Taxmann 230 Delhi High Court (Paper book pages 51 to 54) In the said case, the High Court held that where no limitation is prescribed, as in Sec.201, action must be initiated by the competent authority under the Act within a period of four ....
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....licant, relying on the decision of the Hon'ble ITAT, "A" Bench, Hyderabad in the case of ACIT vs Good Health Plan Ltd., (ITA 155/HYD/2013) pleaded that since the D.C.LT, Circle 2(1), Hyderabad held in his order that the assessee is not in default in respect of any amount by way of TDS in respect of the non-compete fee, the applicant is not liable to be penalized u/s.271C of the Act. The applicant also relied upon the decision of the Hon'ble ITAT "A" bench Mumbai, in the case of A.C.I.T Vs American School of Bombay Education Trust_(I.T.A Nos.6349 to 6351/Mum/2009 and C.O. Nos. 141 to 143/Mum/2010 dated 31-01-2011). (Paper book pages 39 to 43) In this case, the Hon'ble I.T.A.T, "A" Bench, Mumbai was adjudicating upon orders passed by C.LT (A) deleting penalty imposed U/s.271C of the Act. In the said case, orders U/S.201(1) & 201(lA) were passed by D.C.LT (TDS). Thereafter penalty U/S.271C was levied. When the penalty appeal came up before the C.LT (Appeals), assessee contended that the I/T.A.T held that the initiation of proceedings U/S.201(1) & 201(lA) in the instant years was beyond the period of six years and hence barred by limitation. Considering the fact that the I.....
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....aimed it to be an intangible asset and depreciation thereon or to allow it as deferred revenue expenditure and the AO had rejected the assessee's claim mainly on the ground that genuineness of the payment is not proved and that non-compete fee is not an intangible asset and therefore, depreciation thereon is not allowable. It was in these circumstances that the Tribunal had remitted the issue to the file of the AO for deciding afresh and also to decide the allowability of depreciation claimed on such noncompete fee. However, in the order of the Tribunal against the penalty u/s 271C for the A.Y 2008-09, it has been held that the contention of the assessee that the non-compete fee is the business expenditure of the assessee, has been upheld. This finding is thus an erroneous recording of facts and therefore, there is a mistake apparent from record. Therefore, we deem it necessary to modify Para 13 as under: "13..... (HUF)............has been directed to be verified by the Tribunal in the assessee's own case for A.Y 2008-09 in the quantum appeal and the contention of the assessee to allow depreciation on non-compete fee or alternatively to allow it as deferred revenue expenditure ha....