Commissioner of Income-tax, Chennai. v. M/s. Thiru Arooran Sugars Ltd
[Citation -2015-LL-0224-15]

Citation 2015-LL-0224-15
Appellant Name Commissioner of Income-tax, Chennai.
Respondent Name M/s. Thiru Arooran Sugars Ltd.
Court HIGH COURT OF MADRAS
Relevant Act Income-tax
Date of Order 24/02/2015
Judgment View Judgment
Keyword Tags application for rectification • mistake apparent
Bot Summary: The facts, in a nutshell, are as follows:- The Revenue filed Miscellaneous Petition for rectification of the order passed by the Tribunal in ITA No.19/Mds/1995 dated 28.7.03 within the same year. The Miscellaneous Petition was numbered as 268/Mds/2003 however, the same was taken up by the Tribunal for hearing only in September, 2007, at which point of time, the Tribunal dismissed the same on the ground that more than four years having elapsed from the date of the order, the said order could not be rectified. In the light of the above controversy, we set out hereinbelow the provisions of section 254(2) of the 1961 Act which read as follows : 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, and shall make such amendment if the mistake is brought to its notice by the assessee or the Assessing Officer. Under the first part, the Appellate Tribunal may, at any time, within four years from the date of the order, rectify any mistake apparent from the record and amend any order passed by it under sub-section. In the circumstances, the High Court had erred in holding that the application could not have been entertained by the Tribunal beyond four years. If the assessee has moved the application within four years from the date of the order, the Tribunal is bound to decide the application on the merits and not on the ground of limitation. Section 254(2) of the Income-tax Act, 1961, lays down that the Appellate Tribunal may at any time within four years from the date of the order rectify the mistake apparent 5 from the record but that does not mean that if the application is moved within the period allowed, i.e., four years, and remains pend ing before the Tribunal, after the expiry of four years the Tribunal can reject the application on the ground of limitation.


IN HIGH COURT OF JUDICATURE AT MADRAS DATE: 24.02.2015 CORAM HONOURABLE MR. JUSTICE R.SUDHAKAR AND HONOURABLE MR. JUSTICE R.KARUPPIAH T.C.A. NO. 436 OF 2008 Commissioner of Income Tax Chennai.Appellant -Vs- M/s. Thiru Arooran Sugars Ltd. 112, Uttamar Gandhi Salai Eladarado, V Floor Chennai 600 034.Respondent Appeal filed under Section 260-A of Income Tax Act against order dated 28.9.07 passed by Income Tax Appellate Tribunal, Madras 'C' Bench, Chennai, made in M.P. No.268/Mds/2003 in ITA No.19/Mds/1995. For Appellant: Mr.Swaminathan For Respondents: Mr. Vijayaraghavan for M/s.Subbaraya Aiyar Padmanabhan JUDGMENT (DELIVERED BY R.SUDHAKAR,J.) Aggrieved by order passed by Tribunal in dismissing appeal filed by it, appellant/Revenue is before this Court by filing present appeal. This Court, vide order dated 1.7.08, admitted appeal on following substantial question of law:- 2 Whether in facts and circumstances of case, Tribunal was right in holding that application for rectification under Section 254, filed well within time becomes infructuous if Tribunal takes it up for hearing only after lapse of four years from date of order sought to be rectified? 2. facts, in nutshell, are as follows:- Revenue filed Miscellaneous Petition for rectification of order passed by Tribunal in ITA No.19/Mds/1995 dated 28.7.03 within same year. Miscellaneous Petition was numbered as 268/Mds/2003, but, however, same was taken up by Tribunal for hearing only in September, 2007, at which point of time, Tribunal dismissed same on ground that more than four years having elapsed from date of order, said order could not be rectified. In coming to said conclusion, Tribunal relied upon judgment of this Court in case of CIT Vs - Sri Ayyanar Spinning & Weaving Mills (2008 216 ITR 355 (Mad)). Aggrieved by said order, appellant/Revenue is before this Court by filing present appeal. 3. Heard Mr.Swaminathan, learned standing counsel appearing for appellant/Department and Mr.Vijayaraghavan, learned counsel appearing for respondent/assessee. 4. It is fairly stated by learned counsel on either side that 3 above issue is covered by decision of Supreme Court in Sree Ayyanar Spinning & Weaving Mills Ltd. -Vs Commissioner of Income Tax (2008 (301 ITR 434). Supreme Court, in abovesaid decision, analysing provisions of Section 254 (2) of Act, held as under:- 7. By impugned judgment High Court came to conclusion that under section 254(2) Tribunal could not have allowed rectification beyond four years. That Tribunal had no power to rectify mistake after four years which time is set out in section 254(2) itself for passing order of rectification either suo motu or on application filed either by assessee or by Assessing Officer. High Court did not go into merits of case. High Court allowed appeal and set aside order of Tribunal only on ground of limitation. Hence, this civil appeal by special leave. 8. In light of above controversy, we set out hereinbelow provisions of section 254(2) of 1961 Act which read as follows : "The Appellate Tribunal, may at any time within four years from date of order, with view to rectifying any mistake apparent from record, amend any order passed by it under sub-section (1), and shall make such amendment if mistake is brought to its notice by assessee or Assessing Officer." 9. Analysing above provisions, we are of view that section 254(2) is in two parts. Under first part, Appellate Tribunal may, at any time, within four years from date of order, rectify any mistake apparent from record and amend any order passed by it under sub-section (1). Under second part of section 254(2), reference is 4 to amendment of order passed by Tribunal under sub-section (1) when mistake is brought to its notice by assessee or Assessing Officer. Therefore, in short, first part of section 254(2) refers to suo motu exercise of power of rectification by Tribunal whereas second part refers to rectification and amendment on application being made by Assessing Officer or assessee pointing out mistake apparent from record. In this case, we are concerned with second part of section 254(2). As stated above, application for rectification was made within four years. application was well within four years. It is Tribunal which took its own time to dispose of application. Therefore, in circumstances, High Court had erred in holding that application could not have been entertained by Tribunal beyond four years. 10. In this connection, our attention is also invited to judgment of Rajasthan High Court in case of Harshvardhan Chemicals and Minerals Ltd. v. Union of India [2002] 256 ITR 767 wherein identical controversy arose for determination and view taken by that court was as follows (headnote) : "Once assessee has moved application within four years from date of appeal, Tribunal cannot reject that application on ground that four years have lapsed, which includes period of pendency of application before Tribunal. If assessee has moved application within four years from date of order, Tribunal is bound to decide application on merits and not on ground of limitation. Section 254(2) of Income-tax Act, 1961, lays down that Appellate Tribunal may at any time within four years from date of order rectify mistake apparent 5 from record but that does not mean that if application is moved within period allowed, i.e., four years, and remains pend ing before Tribunal, after expiry of four years Tribunal can reject application on ground of limitation." 11. We are in agreement with view expressed by Rajasthan High Court in case of Harshvardhan Chemicals and Minerals Ltd. [2002] 256 ITR 767. 5. facts in issue are identical to facts of above case. This Court is of considered view that abovesaid decision of Supreme Court is squarely applicable to facts of present case. In view of said decision, substantial question of law is answered in favour of Revenue and against assessee. 6. In result, appeal is allowed by way of remand. matter is remanded back to Tribunal to reconsider issue raised in miscellaneous petition, filed by Department/appellant, for rectification and decide same on its own merits. (R.S.J.) (R.K.J.) 24.02.2015 Index : Yes/No Internet : Yes/No GLN 6 To 1. Commissioner of Income Tax Chennai. 2. Income Tax Appellate Tribunal 'C' Bench, Chennai.R.SUDHAKAR,J. AND R.KARUPPIAH, J. GLN T.C.A. NO. 436 OF 2008 24.02.2015. Commissioner of Income-tax, Chennai. v. M/s. Thiru Arooran Sugars Ltd
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