Delay Condoned as Limitation Counted from Order Receipt Date, Not Order Date: ITAT Mumbai

SKF India Limited Vs ACIT (ITAT Mumbai)

In SKF India Limited Vs ACIT, the Income Tax Appellate Tribunal, Mumbai Bench, dealt with a Miscellaneous Application filed by the assessee seeking rectification of an earlier tribunal order dated 25.02.2025. The assessee submitted that although there was a delay of 120 days in filing the application, the delay should be condoned since the limitation period must be computed from the date of receipt of the order, not the date of the order itself. Relying on the decision of the Bombay High Court in Accost Media LLP vs DCIT, the Tribunal accepted that the order was received on 06.06.2025 and the application filed on 29.12.2025 was within the permissible time. Accordingly, the delay was condoned.

On merits, the assessee contended that the Tribunal had failed to consider a binding judicial precedent of a coordinate bench and had also misinterpreted another precedent. Specifically, it was argued that a decision of the Mumbai ITAT in DCIT v Supreme Industries Limited, which held that no adjustment to book profits is required in respect of tax on distributed dividends, was neither considered nor distinguished. Additionally, reliance placed on a Kolkata ITAT ruling in ACIT v Balarampur Chini Mills Ltd was incorrectly interpreted in the earlier order.

The Tribunal observed that it had indeed relied on the Kolkata Bench decision but had drawn an incorrect conclusion from it, resulting in a mistake apparent on record. Referring to the principle laid down by the Supreme Court of India in Honda Siel Power Products Ltd vs CIT, the Tribunal reiterated that it has a duty to rectify errors that prejudice a party.

Consequently, the Tribunal held that the non-consideration and misinterpretation of binding precedents constituted a rectifiable mistake under section 254(2) of the Income-tax Act. It recalled Ground No. 9 of its earlier order for fresh adjudication and directed that the appeal be restored to its original position, with fresh notice to be issued. The Miscellaneous Application was thus allowed.

FULL TEXT OF THE ORDER OF ITAT MUMBAI

The instant Miscellaneous Application (in short, ‘MA’) is filed by the assessee against the order of the ITAT, Mumbai Bench ‘E’ bearing ITA No.7544/Mum/2011 date of order 25.02.2025.

2. The Ld. AR has advanced her argument and stated that the MA was filed with a delay for 120 days. The Ld. AR stated that the original order passed by the ITAT on 25.02.2025 which was received by the assessee on June 2025. Accordingly, the assessee is liable to file the MA by 31.12.2025. The assessee has filed the application on 29.12.2025. Respectfully considering the order of the Hon’ble Bombay High Court in case of Accost Media LLP vs DCIT (2026) reported in 308 Taxman 411 (Bom.) date of order 01.12.2025 held Where assessee received ITAT’s order on 24-3-2025 and filed rectification application on 16-7­2025, limitation of six months for filing such application commenced from date of communication of order and not date of order itself; accordingly, application was within time and order treating it as time-barred was liable to be quashed.

3. The Ld. DR argued but had not made any strong objection against the submission of the assessee.

4. In our considered view, we find that the order was duly communicated and served to the assessee on 6^th June 2025. Considering the order of the Hon’ble Bombay High Court the assessee has filed MA within six months from the end of the month the order was received. So, the delay for filing appeal for 120 days is duly condoned and the appeal is taken for adjudication.

5. The objection has been raised by the Ld. AR in MA that the Bench has passed the order without following the order of the Coordinate Bench of ITAT-Kolkata and had not distinguished the same. The mistake is apparent from the record of the appeal. The Ld. AR submitted the written contention which is reproduced as below:-

“Mistake – Non-consideration of binding judicial precedent:

“8. The Applicant submits that the issue under question is squarely covered by the jurisdictional coordinate bench of Mumbai ITAT in the favour of the assessee. The said decision was submitted MA No.377/Mum/2025 (Arising out of ITA No.7544/Mum/2011) SKF India Ltd. in the compilation of judicial precedents vide paper book dated 29 December 2024 (Page No. 53 to 63). Further, the same was also cited during the appeal hearing by the counsel. The assessee submits that its case is squarely covered by the decision binding decision of Mumbai ITAT in the case of DCIT v Supreme Industries Limited (2008) 2 TMI 899. As per the said decision, no adjustment is required to be made to book profits in relation to tax on distributed dividend

9. The Revenue has not produced any decision contrary to the same.

10. The said decision is neither cited, nor distinguished in the impugned order.

11. Hence, non-consideration of decision rendered by Co-ordinate Bench on identical issue would amount to mistake apparent from record.

12. The Applicant also wishes to place reliance on the below judicial precedents (submitted in the paperbook dated 11 February 2026 which upheld that non-consideration of a binding judicial precedent is a mistake apparent from record and deserves rectification under section 254(2) of the Act (Kindly refer to page number as referred in the paperbook):

13. In view of the above, the Applicant submits that the impugned order should be rectified to allow ground no. 9 in the favour of the assessee based on above submissions.

Mistake-Misinterpretation and incorrect distinction of a judicial precedent:

14. The assessee also relied on the decision of Hon’ble Kolkata ITAT in the case of Assistant Commissioner of Income-tax, Central Circle XIX, Kolkata v. Balarampur Chini Mills Ltd. [2007] 109 ITD 146 (Kolkata). In the said case, it was upheld that tax on profit distributed as dividend under section 115-0 is allowable as deduction in computation of book profit for purpose of section 115JB. In arriving at the said conclusion, the Hon’ble ITAT made comparison between fringe benefit tax and distribution of profit as per section 115-0 of the Act. However, the case clearly dealt with tax on distributed dividend under section 115-0 of the Act and its addition to book profits. Hence, the same was squarely applicable to the present case.

15. However, in the impugned order (at page 17 of the impugned order), it is mentioned that “… the dividend distribution tax (DDT) under section 115-0 does not constitute a fringe benefit tax” while ruling against the assessee.

16. Hence, the assessee submits that the said decision is incorrectly distinguished and misread. Hence, the same deserves to be rectified.”

6. The Ld. DR argued and respectfully relied on the order of the ITAT Mumbai Bench.

7. We heard the rival submission and considered the documents available in the record. We find that the tribunal has adopted the order of the ITAT Kolkata in the case of ACIT vs Balrampur Chini Mills Ltd. 109 ITD 146. After the said adoption the tribunal had made a mistake and taken a wrong observation from the said order of the Coordinate Bench. We find that the said mistake apparent from the record and accordingly we considering the assessee’s submission the Ground No.9 of the original order of tribunal is duly recalled. Further respectfully considering the order of Hon’ble Supreme Court in the case of Honda Siel Power Products Ltd. vs CIT reported in (2007) 295 ITR 466 (SC) has held that the purpose of section 254(2) is to ensure that no party suffers on account of mistake committed by the tribunal and that the tribunal is duty bound to rectify any mistake apparent from the record which causes prejudice to either party. In the present case, we are satisfied that the observations recorded in the impugned order in Ground No.9 recalled reconsideration in light of the order of Coordinate Bench of ITAT Kolkata. Accordingly, in the interest of justice and to rectify the apparent mistake on record, we recall the Ground No.9 of the order of tribunal for adjudication the issue afresh. Accordingly, the miscellaneous application filed by the assessee is allowed.

8. In view of the above the order dated 25.02.2005 is in Ground No.9 is recalled and appeal is ordered to be restored to its original no. in situ. The registry is also directed to issue a fresh notice of hearing of both the parties.

9. In the result, the assessee’s MA No. 377/Mum/2025 is allowed.

Order pronounced in the open court on 24/03/2026