TMI Blog2004 (5) TMI 231X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of Nagpur Bench of ITAT in the case of Bhillai Engg. Corpn. Ltd. v. Dy. CIT [2002] 81 ITD 282 was cited and after some discussion, the counsel prayed for an adjournment and made a petition to the Hon'ble President, ITAT for constitution of a larger Bench. Hence the constitution of the present Special Bench. 4. The learned counsel Shri S.N. Soparkar submitted that section 254(2) provides for two situations in which the Tribunal can rectify a mistake -(1) Suo moto and (2) on an application by either party. Placing reliance on the decision of the Nagpur Bench in the case of Bhillai Engg. Corpn. Ltd. he submitted that in the first situation which is discretionary, the time limit of four years is provided and for the second situation which is a mandatory exercise on mistake being brought to its notice by either party, no time limit is provided. He further submitted that section should be segregated and it should be read as it stands. He referred to the decision of the Hon'ble Gujarat High Court in the case of Asstt. CIT v. Saurashtra Kutch Stock Exchange Ltd. [2003] 262 ITR 146 at 153-154 for the two types of powers of Tribunal. He then referred to other analogous sections in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of (i) Asstt. CIT v. Somany Pilkington Ltd. [1994] 49 ITD 207 (Delhi); (ii) ITO v. Homi Mehta Sons (P.) Ltd. [1985] 14 ITD 64 (Bom.); (iii) His Highness Sri Rama Verma v. ITO [1982] 2 ITD 491 (Cochin); (iv) Somany Pilkington's Ltd. v. ITO [1989] 31 ITD 286 (Delhi); (v) IAC v. Ballarpur Industries Ltd. [1987] 21 ITD 164 (Nag.); wherein it is held that the rectification may not be barred by limitation where the application for rectification is filed within four years time limit because it is the duty of the Tribunal to dispose of the application of the assessee filed within time and the rights of the party cannot lapse because of latches of the Appellate Tribunal. Contrary to the above, there are two decisions wherein it was held that no orders can be passed as the four years period had lapsed, viz. (i) Dr. Rajah Sir M.A. Muthiah Chettiar v. ITO [1985] 11 ITD 288 (Mad.); (ii) Rai Bahadur Shreeram Durgaprasad Fatechand Narsingdas (Export Firm) v. ITO [1986] 19 ITD 734 (Nag.). The consistent view of the ITAT was that a proceeding in which the application under section 254(2) was filed beyond the period of four years it would not be maintainable as was held in Rai Bahadur Shreeram ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C) it has also been held that it is not the job of the Court to make good the deficiency. The Hon'ble Bench has also given emphasis to the coma appearing after the word 'Tribunal' in section 254(2) which is not warranted as stated by Vepa P. Sarthi in his book Interpretation of Statutes Second Edition at page 265 that punctuation is not part of the Statute and in construing the Statute, the Court should first read it without the punctuation. He further submitted that the fundamental principle of interpretation of Taxing Statutes is the principle of strict construction. Taxing statutes have to be interpreted differently from beneficial legislation (e.g. Labour Laws). Reference was drawn to the decision of the Supreme Court in the case of K.M. Sharma v. ITO [2002] 254 ITR 772. The ITAT Nagpur Bench has thus extended the limitation period of proceedings under section 254(2) which does not have the sanction of Law. 9. We have heard the parties and considered the rival submissions. Section 254(2) giving rise to the controversy in the present case reads as under: "The Appellate Tribunal may, at any time within four years from the date of the order, with a view to rectifying any mista ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter of duty if the mistake is brought to its notice by the parties to the order. The period of limitation controls above activity. Condition of exercise of power including period of limitation are common in the two situations; one asking for discretionary action and the other making action compulsory, i.e., as a matter of duty. The portion of sub-section covered by situation (b) is not independent of situation (a). The language of the statute is clear and unambiguous and is required to be given effect to. 13. In our opinion, therefore, there is no scope to argue that amendment required to be made when mistake is brought to the notice of the Appellate Tribunal can be made at any time and period of limitation of four years from the passing of order under section 254(1) of IT Act has no application. No amendment can be made beyond period of 4 years. 14. Nagpur Bench decision referred to in the application has opined that the time limit of four years applies to suo motu rectification by the Tribunal and when the rectification is done in accordance with the prayer of either of the parties, there is no lime limit. It is a brief order and is reproduced for the sake of convenience: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e: "Interest republica ut sit finis litum. Translation loses terseness but what Lord Coke put in Latin lag conveys that the law suits be not protracted, otherwise great oppression might be done under the colour and pretence of law. We have considered the panoply of law on which the Tribunal based its decision. To be precise it was the concept of ownership. The concept has been, redefined by the Apex Court. The Tribunal is bound to follow the law propounded by the Hon'ble Supreme Court. We, therefore, for the palladium of justice condone the delay in filing the miscellaneous application and proceed to decide the issue on merits." 15. On a careful reading of the above, it appears that the Nagpur Bench has taken into consideration four aspects of the matter - (1) that the use of the word 'may' after the words 'The Appellate Tribunal' indicate that the power to rectify at its own is implied; (2) that therefore the time limit of 4 years is for suo motu rectification and not when prayed for either of the party; (3) that the delay of the counsel in making application for rectification is a reasonable cause and the Tribunal can condone the same; and (4) that justice should be done even i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... something in the section which is not there namely 'of its own' as it is implied from the wordings used, i.e., 'The Appellate Tribunal may'. 17. However its further observation as stated in the second aspect that "therefore, time limit of four years is in the context of suo motu rectification. Where rectification is to be done in accordance with prayer of either of the parties such limit is not much relevant" is not born out on a fair reading of the provision. We are not in a position to accept that view. Otherwise also, if the view of the Nagpur Bench is taken as correct, there will be flood gate of miscellaneous applications and the orders passed even by the First President of the Tribunal Mr. Justice Munir given in 1940 could be rectified today or in the years to come or for time immemorial on the application of either party. No order could ever be final if that view is upheld. Such a view can lead to chaos. This could never be the intention of the Legislature. 18. Reference is invited to the wordings of section 35(1) of Indian Income Tax Act, 1922 dealing with rectification of mistake by CIT, AAC and Assessing Officer, wherein a different phraseology is used on the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) With a view to rectifying any mistake apparent from the record, the Commissioner, the Assessing Officer, the Commissioner (Appeals) and the Appellate Tribunal may, of his, or its, own motion or on an application by the assessee in this behalf, amend any order passed by him or it in any proceeding under this Act within four years from the end of the financial year in which such order was passed." In the legislative enactment of 1974, the period of four years to carry amendment of order passed is explicitly and clearly provided; leaving no scope for arguments, like the one advanced before us. Clarity and maturity of legislative draftsmanship is evident in the subsequent enactment. Having regard to identical objects of provisions quoted above, we see no reason or logic nor any was advanced before us, why unlimited period to carry amendment could be allowed to parties to seek rectification before the Appellate Tribunal when limited period of four years is provided to other Tribunals and authorities. Above reference does not support the case of the applicants. 21. The provisions with time limit other than for rectification referred to are:- (i) Section 154(7) Save as otherwis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the 1st day of January, 1997; and (b) two years from the end of the month in which the notice under this Chapter was served on such other person in respect of search initiated or books of account or other documents or any assets are requisitioned on or after the 1st day of January, 1997. 22. These sections in no way help us in resolving the controversy; though these have a bearing on the issue that wherever the Legislature wanted to provide the period of limit to start, it is so provided specifically, viz., "after the expiry of four years from the end of the financial year in which the order sought to be amended was passed." In section 154(7); "at any time before the time for presenting an appeal against such order has expired", in section 269N, "no amendment shall be made under this section after the expiry of six months from the end of the month in which the order sought to be amended was made" in section 269UJ; "after the expiry of the financial year in which the proceedings, - are completed, or six months from the end of the month - whichever period expires later" in section 27 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which created a fiction for its applicability if at the time of payment of advance or loan to a shareholder of a company, in which public are not substantially interested and tax is attracted on the loan or advance to the extent to which the company possess the accumulated profits, the moment the loan or advance is received. The loan in this case was repaid before the end of the year and a contention was raised that the fiction created by section 2(6A)(e) would not be applicable. The Supreme Court held that "the language of sections 2(6A)(e)and 12(1B) is clear and unambiguous. There is no scope for importing into the statute words which are not there. Such importation would be not to construe, but to amend, the statute. Even if there be a casus omissus the defect can be remedied only by legislation and not by judicial interpretation. Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however great the hardship may appear to the judicial mind to be." The language of section 254(2) of the Act, in our opinion, is clear and unambiguous and an order cannot be rectified after four years from the date of the order, be that in a proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt relief on the prayer of the assessee or revenue after the expiry of said period of four years. Similarly, in the case of S.P. Gupta the Supreme Court held that obvious omission can be made up by suitable interpretation but the court cannot supply supposed deficiencies as in that case instead or declaring the Law, would be making laws. 26. In view of the above discussion we therefore, hold that time limit of four years to make rectification applies both to suo motu action of the Appellate Tribunal as well as to action taken on request of parties. The Miscellaneous Application of the assessee filed on 11-4-2002 for rectifying an order of the Tribunal dated 28-4-1997 is barred by limitation and the Tribunal cannot make any rectification of its order on the prayer of the assessee as the time limit for four years from the date of the order has already expired. We do not find any merit in the application of the assessee. It has accordingly to be dismissed. 27. The Nagpur Bench, it seems, was influenced by the zeal of doing justice which they thought should be done even if heaven falls and by the fact that the delay in making application was on account of counsel of the assessee wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by making it in some measure equivalent to right. They discourage litigation by bringing in one common receptacle all the accumulations of past times which are unexplained and have now from lapse of time become inexplicable. It has been said by John Voet that controversies are limited to a fixed period of time, lest they should be immortal while men are mortal". It is a trite law that a statute of limitation is a statute of repose, peace and justice. 30. The Privy Council in White v. Paruthe 1 Knapp's Privy Council Reports 179 enunciated the principle that if a person is insensible to the value of civil remedies and he is not alert enough to make his claim with promptitude, such a person should not be aided by the State in the enforcement of his claim. This is in keeping with the other Latin maxim 'Vigilantibus non dormientibus jura subsvenient'. In the instant case it was further pointed out that statutes of limitation serve to ensure private justice, suppress fraud and perjury, quicken diligence and prevent oppression. 31. The object of providing limitation in a statute is to expect litigants to be diligent in seeking remedies in Courts of Law or from statutory authorities. I ..... 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