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2020 (12) TMI 260 - AT - Income TaxRectification u/s 254 - Assessment proceedings u/s 158BC - jurisdiction questioned by the assessee with reference to Section 158BD - period of limitation - adjudication of grounds remaining undecided at the time of disposal of the substantive appeal - HELD THAT:- Admittedly, limitation period when reckoned from the date of Tribunal order stands time barred. The assessee, however, insists that starting point of limitation for the purpose of rectification of Tribunal order should be reckoned from the date when a bonafide cause of action arose non- disposal of grounds of substantial nature regardless of the date of order of the Tribunal. Facts of case confronts a peculiar and rare situation indeed. In the instant case, the doctrine of merger of the order of ITAT with that of Hon’ble High Court would apply only to the extent, the subject matter of the order of ITAT and that of Hon’ble High Court is the same. The order of ITAT in respect of legal point thus stands merged with the appellate order of the Hon’ble High Court passed under S. 260A and as a consequence, no rectification of the existing order of the Tribunal rendered only on point of jurisdiction is permissible. However, the doctrine of merger is not a doctrine of universal or unlimited application. It will depend on the nature of jurisdiction exercised by the superior forum and the content or subject matter of challenge as extensively dealt with by Hon’ble Supreme Court in the case of Kunhayammed vs. State of Kerala [2000 (7) TMI 67 - SUPREME COURT] - Thus, doctrine of merger would not extend to issues on merits remaining undecided by the Tribunal or by the Hon’ble High Court. There appears to be no bar exercising its inherent and statutory powers of Tribunal in revisiting its earlier action with a limited purpose of adjudication of grounds which remained undecided. In the instant case, it is the Tribunal which has committed error in restricting itself to legal ground and in not addressing itself on certain other grounds of substantial nature without any fault attributable to the assessee. In such a situation, the cause of substantial justice deserves to be preferred over the technical considerations pitted against it by way of limitation, to shun an apparent miscarriage of justice. Rectification application in the instant case has been filed promptly with reference to the judgment of Hon’ble Gujarat High Court and thus there can be no presumption that delay is occasioned deliberately in the instant case. No culpable neglizance or malafide can be presumed in the peculiar facts. It is an admitted position that mistake is apparent and has been committed by the Tribunal. It is manifest that the denial to rectify the own mistake of ITAT on the grounds of limitation would cause grave miscarriage of justice. Thus, befittingly, it is the obligation of the Tribunal to set right the injustice by recalling earlier order with a view to pass order on remaining points. Remedy sought by the assessee can not be frustrated on the grounds of bar of limitation without weighing the circumstances of the case. An incomplete order wholly attributable to the Tribunal itself should not ordinarily cause miscarriage of justice. Fair play is one of the most essential facets of any judicial process. When the principles laid down by Hon’ble Supreme Court in S. Nagraj [1993 (8) TMI 292 - SUPREME COURT] and other precedents are applied, in our thoughtful consideration, the obligation is cast upon the Tribunal to set right and remove the error of an incomplete disposal in conformity with judicial functions endowed upon it. The Tribunal, in our view, is competent to do so. Miscellaneous application of the assessee is allowed and the order of the Tribunal is recalled for the limited purpose of adjudication of grounds remaining undecided at the time of disposal of the substantive appeal.
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