OSWPL708.17.doc IN HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION (L) NO. 708 OF 2017 Commissioner of Income Tax(IT-4) Petitioners Vs 1. Income Tax Appellate Tribunal & Anr. ... Respondent WITH WRIT PETITION NO. 1406 OF 2017 Commissioner of Income Tax(IT-4) Petitioners Vs 1 Income Tax Appellate Tribunal & Anr. ... Respondent WITH WRIT PETITION NO. 1431 OF 2017 Commissioner of Income Tax(IT-4) Petitioners Vs 1 Income Tax Appellate Tribunal & Anr. ... Respondent WITH WRIT PETITION NO. 1432 OF 2O17 Commissioner of Income Tax(IT-4) Petitioners Vs 1 Income Tax Appellate Tribunal & Anr. ... Respondent Mr. Parag Vyas with Mrs. Padma Divakar for Petitioners in all petitions. Mr. J.D. Mistry, senior counsel with Mr. Balasaheb Yewle for Respondent No.2 in all petitions. SRP 1/10 ::: Uploaded on - 10/08/2017 ::: Downloaded on - 30/10/2017 12:30:03 ::: OSWPL708.17.doc CORAM : S.C. DHARMADHIKARI & SMT.VIBHA KANKANWADI, JJ. TUESDAY, 8TH AUGUST, 2017 P.C. : 1 Revenue has brought these petitions under Article 226 of Constitution of India challenging order dated 18th November, 2016, of Income Tax Appellate Tribunal, Bench at Mumbai. Tribunal had before it about 122 applications styled as Miscellaneous Applications by Reliance Communications Limited, Reliance Communications Infrastructure Limited, one by Reliance BPO Limited and four by Reliance Telecom Limited. 2 It is common ground that these Applications were heard on 13th May, 2016, but Tribunal pronounced order on these Miscellaneous Applications after six months and more on 18th November, 2016. 3 contentions of applicants in Miscellaneous Applications, briefly summarized, were that in initial order of Tribunal on Income Tax Appeals dated 6 th September, SRP 2/10 ::: Uploaded on - 10/08/2017 ::: Downloaded on - 30/10/2017 12:30:03 ::: OSWPL708.17.doc 2013, there are inadvertent errors and which need to be modified/rectified. We take application at Page 221 of paper- book since Mr. Parag Vyas learned advocate for petitioner- Revenue invites our attention to same. first main heading Agreement and General Terms and Conditions of Purchase (GTC for short). complaint of assessee is that it was not considered in arriving at final conclusion. Then comes second heading No.2 which reads thus : Mistake in reading ratio of Delhi High Court's decision in case of Director of Income Tax v. Ericsson A.B. reported in (2012) 343 ITR 470. third main heading is Ignoring decisions of Co-ordinate Benches and not constituting larger Bench in case different view is taken. 4 On such application which was made to Tribunal seeking correction of mistakes which are styled as 'apparent from record', petitioner-Revenue on being served with such applications, inter-alia, raised objection to maintainability thereof. 5 Tribunal, in considering this and other SRP 3/10 ::: Uploaded on - 10/08/2017 ::: Downloaded on - 30/10/2017 12:30:03 ::: OSWPL708.17.doc objections arrived at conclusion that initial order is indeed suffering from mistakes apparent on record and ingredients of sub-section (2) of section 254 of Income Tax Act, 1961 are satisfied. Proceeding thus, it allowed Miscellaneous Applications by impugned order. result is that initial order dated 6 th September, 2013, is recalled and set aside and all appeals which were decided by said order would have to be re-heard and re-decided. This petition of Revenue seeks to challenge such order. 6 We have heard Mr. Parag Vyas in support of these petitions at great length. He would submit that Tribunal's order is ex-facie erroneous, illegal and without jurisdiction. In garb of entertaining application to consider limited grievance within meaning of sub-section (2) of section 254 of Income Tax Act, 1961, Tribunal has re-heard appeals to arrive at different conclusion on merits. That was impermissible in law. ambit and scope of power under section 254(2) is extremely restricted and limited. It is aimed at correcting obvious and apparent mistakes on record and does not permit re-hearing of appeal on merits in garb of SRP 4/10 ::: Uploaded on - 10/08/2017 ::: Downloaded on - 30/10/2017 12:30:03 ::: OSWPL708.17.doc exercising such jurisdiction. mistakes which are not identifiable and apparent on record cannot be corrected by re- opening concluded proceedings and issues. Precisely that is done. 7 Alternatively and without prejudice Mr. Vyas would urge that even on merits applications do not deserve to be allowed for correct view has been taken of transactions and reliance placed on Delhi High Court's judgment by assessee was misplaced. That was rightly distinguished and issue was covered by decision of Karnataka High Court in case of Commissioner of Income Tax vs. Samsung Electronics Co. Ltd., (2011) 345 ITR 494. 8 With all pursuasive abilities at his command, Mr. Vyas has not been able to point out that impugned order is vitiated because it refuses to take care of or decide objection to maintainability of Miscellaneous Applications and which objection goes to root of case. We find that when applications were placed before Tribunal and raising above grievances, which we have summarized in brief, what SRP 5/10 ::: Uploaded on - 10/08/2017 ::: Downloaded on - 30/10/2017 12:30:03 ::: OSWPL708.17.doc Revenue did was to not only allow Miscellaneous Applications to be accompanied by detailed written submissions on merits, but proceeded to meet them. When Revenue's counsel appeared, he also argued that Delhi High Court judgment was inapplicable and, therefore, rightly distinguished or not followed. argument on maintainability was not main or only submission. Revenue went into merits of case and in great details. It tried to explain as to how Karnataka view, which was followed, was apposite and applicable to facts and governed it entirely. Revenue tried to distinguish Delhi view and by reference to primary documents and transaction. It is apparent that during course of hearing, assessees filed affidavits to support their contentions. Those contentions were equally met by Revenue's advocate in rejoinder. Tribunal was pursuaded and it passed detailed order once again running into 41 pages. 9 In circumstances, we do not think that view taken by Tribunal that its initial order contained some mistakes and which need to be rectified requires our interference in writ jurisdiction. If we take objections of Revenue as SRP 6/10 ::: Uploaded on - 10/08/2017 ::: Downloaded on - 30/10/2017 12:30:03 ::: OSWPL708.17.doc they are, they are not going to root of case, namely, maintainability of proceedings, styled as Rectification Applications and alleged limited jurisdiction of Tribunal. At no stage it was contention of Revenue that Tribunal has become functus officio after it delivered its order dated 6th September, 2013. If it had to re-look or re-visit that order it must be for limited purpose and permitted by section 254 (2) of Income Tax Act, 1961. It could not have then touched files and cases or original records so as to allow assessee to take up all pleas on merits. merits may have been decided erroneously, but Tribunal has that jurisdiction and within its powers it may pass erroneous order. only remedy to question its order is to appeal to higher court. This is not nature of objections raised before Tribunal. Rather, perusal of submissions as summarized by Tribunal in impugned order from paragraph 5 onwards would reveal that Revenue also entered into merits of case by justifying and supporting findings and conclusions of Tribunal in initial order. Those are clearly on merits of controversy. In such circumstances when parameters as they are and known to all, extremely limited, allegedly not adhered to is not SRP 7/10 ::: Uploaded on - 10/08/2017 ::: Downloaded on - 30/10/2017 12:30:03 ::: OSWPL708.17.doc sole complaint. complaint is that Tribunal should not have re-visited and recalled its conclusions in initial order also on merits. Thus, view taken by Tribunal is mixed one. By perusing order under challenge, we find that it could be termed as plausible view of proceedings. In larger interest of justice Tribunal felt that it must allow assessee to contest appeals of Revenue which were decided by initial order of 6th September, 2013, fully and properly on merits. fair, just and complete opportunity ought to be granted and assessee deserves same. That is conclusion of Tribunal in impugned order. 10 Such conclusion, to our mind, is not vitiated by any error of law apparent on face of record or perversity warranting our interference in writ jurisdiction. 11 We are surprised that initial order is passed on 6 th September, 2013. Aggrieved and dissatisfied with that order, assessee had brought appeals to this Court. In meanwhile, they had also filed applications for rectification of mistakes under section 254(2) of Income Tax Act, 1961. Those SRP 8/10 ::: Uploaded on - 10/08/2017 ::: Downloaded on - 30/10/2017 12:30:03 ::: OSWPL708.17.doc applications were pending and were decided during course of appeals. assessees having succeeded therein, withdrew their substantive appeals before this Court. We have seen good number of years, namely four years, going by and neither sub- serving larger interest of public or Revenue. Thereafter, we find that Revenue challenged this order of 18th November, 2016, by present petitions which have also taken ten months to be disposed of. This valuable time could have been utilised by commencing hearing of appeals afresh before Tribunal and having them decided expeditiously. 12 In light of above, we dismiss these petitions. We clarify that appeals of Revenue which stand restored to file of Tribunal shall be heard as expeditiously as possible and should be disposed of within period of six months from date of receipt of copy of this order. We stipulate this outer limit in light of controversy involved in these appeals and which may arise in subsequent appeals in case of this very assessee or others in identical business. While we direct Tribunal to dispose of appeals within six months, we will not extend time under any circumstances. We clarify that all SRP 9/10 ::: Uploaded on - 10/08/2017 ::: Downloaded on - 30/10/2017 12:30:04 ::: OSWPL708.17.doc contentions of all parties are open. They shall be open for being agitated, raised and considered by Tribunal afresh. While deciding appeals pursuant to our order and directions, Tribunal shall not be influenced in any manner by any finding and conclusions in order dated 6th September, 2013 or 18th November, 2016. We clarify that this order dated 18 th November, 2016, was passed considering limited request and all other conclusions in that order shall not influence outcome of these appeals. SMT.VIBHA KANKANWADI, J. S.C. DHARMADHIKARI, J. SRP 10/10 ::: Uploaded on - 10/08/2017 ::: Downloaded on - 30/10/2017 12:30:04 ::: Commissioner of Income-tax (IT-4) v. Income-tax Appellate Tribunal & Anr