2023 (2) TMI 212 - HC - Income Tax

Rectification of mistake u/s 254 - Period of limitation - whether miscellaneous application under section 254 (2) of the I.T. Act was filed within a period of four years from the date of communication? - Scope of amendment - HELD THAT:- The effect of amendment as amended w.e.f. 01.06.2016 by Finance Act, 2016 is that prior to amendment of Section 254(2), the assessee could bring to the notice of the appellate tribunal within 4 years from the date of the order for rectifying any mistake apparent from the record but after the amendment of the said section w.e.f. 01.06.2016, the same could be brought to the notice of the appellate tribunal within 6 months from the end of the month in which the order was passed.

Appellant had filed the miscellaneous application much prior to amendment made in section 254 (2) of the Act w.e.f. 01.06.2016, but the Tribunal, in the impugned order, for the purpose of dismissing the said miscellaneous application filed by the appellant has wrongly relied upon an order passed by Mumbai Bench of Tribunal in the case of DCIT Vs. Hita Land Private Ltd. & Ors, [2017 (4) TMI 1256 - ITAT MUMBAI].

As in the instant case the appellant had filed miscellaneous application on 03.06.2014 i.e., much before said amendment dated 01.06.2016, therefore, in the impugned order the learned tribunal has wrongly mentioned that facts of the instant case and facts of the case of Hita Land Private Ltd. [2017 (4) TMI 1256 - ITAT MUMBAI] are similar.

The said order passed in Hita Land Private Ltd. [2017 (4) TMI 1256 - ITAT MUMBAI] by the Mumbai Bench of I.T.A.T. is in the teeth of a judgment of the Gujarat High Court in the case of Peterplast Synthetics (P.) Ltd. [2015 (2) TMI 864 - GUJARAT HIGH COURT] wherein the High Court has held that once it is found that the rectification application u/s 254(2) of the I. T. Act, 1961 has been submitted within a period of four years from the date of actual receipt of the judgment and order passed by the tribunal, which is sought to be reviewed, petitioner is entitled to relief.

In the case of Sree Ayyanar Spinning & Weaving Mills Ltd. [2008 (5) TMI 22 - SUPREME COURT] has an occasion to interpret section 254(2) of the I.T. Act, 1961, wherein the fact in short was that miscellaneous application u/s 254 (2) of the Act was filed well within four years for rectification of the order and it was the Tribunal which took its own time to dispose of the said application and the High Court held that application could not have been entertained by the tribunal beyond four years and the Hon’ble Supreme Court set aside the said judgment of High Court.

We hold that the order of the tribunal requires interference in view of the fact that the learned tribunal has committed gross error in complying the law prevalent on the date of hearing and not the law prevalent at the date of filing of the miscellaneous application. At the cost of repetition, the judgment relied upon by the learned tribunal has already been distinguished in the preceding paragraphs. Hence, both the substantial questions of law are decided in favour of the assessed.

The matter is remitted back to the learned tribunal with a direction to entertain the miscellaneous application filed by the appellant- assessee and decide the same on its own merit in accordance with law after hearing both the parties.