There is an apparent mistake in the order dated 7-4-2016 as the Tribunal has not decided the appeals of the assessee on merit but dismissed the same in limini for want of prosecution. However, the question of rectification of mistake cannot be entertained until and unless the Miscellaneous Petition filed by the assessee is found to be maintainable. The miscellaneous petitions filed by the assessee are beyond the period of 6 months from 1-6-2016 and therefore the same are barred by limitation. In the absence of any provision to condone the delay under the Income Tax Act, it may be a case of omission in the provision of Act which cannot be supplied by us when there is no ambiguity in the provisions of section 254(2) of the Act.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
By way of these miscellaneous petitions, the assessee is seeking recalling of the order dated 7-4-2016 of this Tribunal whereby the appeals of the assessee were dismissed for non-prosecution.
2. The learned counsel for the assessee has submitted that since the appeals of the assessee were dismissed in limine without proceeding on merits. Therefore, there is a mistake apparent on record and consequently the impugned order of the Tribunal may be recalled for giving an opportunity to the assessee for hearing and deciding the appeals on merits. It has been explained that the assessee is a 73 year old lady and does not have access to internet and other modes of communications to seek information such as date of hearing etc., and since the assessee did not receive notice of hearing of the appeal on 7-4-2016, therefore, the assessee could not communicate the date to the representative to appear before this Tribunal. The learned AR has thus pleaded that the reasons for not appearing are beyond the control of the assessee and therefore the impugned order may be recalled for giving an opportunity of hearing and deciding the appeals on merits.
3. On the other hand, the learned DR has vehemently opposed to the miscellaneous application and submitted that the miscellaneous applications are not maintainable as these are barred by limitations as per section 254(2) of the Act. The learned DR has further contended that after the amendment of section 254(2), the mistake in the order of the Tribunal can be rectified within the period of 6 months and since the assessee has filed these miscellaneous applications after the expiry of 6 months of limitation period, therefore the miscellaneous applications are not maintainable and liable to be dismissed in limine.
4. We have considered the rival submissions and carefully perused the relevant record. The assessee has filed these miscellaneous petitions on 13-1-2017 for recalling of order of the Tribunal dated 7-4-2016. The provision of rectification of mistake apparent from record is provided under section 254(2) as under :–
“254. (1) The Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit.
(2) The Appellate Tribunal may, at any time within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the assessing officer:
Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub-section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard:
Provided further that any application filed by the assessee in this sub-section on or after the 1-10-1998, shall be accompanied by a fee of fifty rupees.”
4.1 The time period within which the mistake apparent from record can be rectified has been reduced from 4 years to 6 months by the amendment vide Finance Act, 2016 with effect from 1-6-2016. Thus after the substitution of this provision with effect from 1-6-2016, the limitation period for rectification of mistake apparent from record is provided only for 6 months from the end of the month in which the order was passed. In the case in hand, the impugned order was passed by the Tribunal on 7-4-2016 and after the amendment in section 254(4) with effect from 1-6-2016, these miscellaneous petitions were required to be filed before 31-12-2016. Prior to the amendment, the limitation was provided as 4 years for rectification of mistake apparent from record and therefore there was no provision in the Income Tax Act for condonation of any delay of any petition for rectification of mistake filed after the said period of 4 years. Even otherwise, the limitation of 4 years was more than the limitation for filing of the suite and as per the general statute i.e., the Limitation Act where the limitation for institution of suit is provided as 3 years on wards from the date of cause of action arised and therefore there was no provision even in the Limitation Act for condonation of delay in respect of delay in filing the suit. Since the limitation for rectification of mistake is provided in the Income Tax Act itself, therefore the provisions of Limitation Act are not applicable so far as the limitation provided in the Income Tax Act. This principle is well settled that when there is a provision in special statute, then the general statute is not applicable to the extent of the provision provided in the special statute. We find that prior to the amendment the limitation for rectification of mistake was 4 years as provided under section 254(2) and therefore there was no question of providing any provision or power to the Income Tax Appellate Tribunal to condone the delay after the expiry of such 4 years of limitation. However, in the amended provisions of the Act under section 254(2), the limitation for rectification of mistake apparent from the record has been drastically reduced from 4 years to 6 months and in case of a delay in applying for rectification of mistake apparent from record, the party who is aggrieved by the order of this Tribunal suffering from mistake will be subjected to a great hardship and deprivation of valuable right of pursuing the appeal before the Tribunal. But in the absence of any provision giving power or jurisdiction to this Tribunal to condone the delay in filing the petition for rectification of the mistake apparent from the record, the Tribunal has no option but to proceed strictly as per the provisions as provided in the statute.
5. We have no doubt in our mind that there is an apparent mistake in the order dated 7-4-2016 as the Tribunal has not decided the appeals of the assessee on merit but dismissed the same in limini for want of prosecution. However, the question of rectification of mistake cannot be entertained until and unless the Miscellaneous Petition filed by the assessee is found to be maintainable. The miscellaneous petitions filed by the assessee are beyond the period of 6 months from 1-6-2016 and therefore the same are barred by limitation. In the absence of any provision to condone the delay under the Income Tax Act, it may be a case of omission in the provision of Act which cannot be supplied by us when there is no ambiguity in the provisions of section 254(2) of the Act. The Hon’ble Bombay High Court in the case of Bharat Petroleum Corpn. Ltd. v. ITAT (2013) 359 ITR 371 (Bom), while dealing with an identical issue has held in paras 16 to 18 as under :–
“16. It was next contended on behalf of the petitioner that the power of the Tribunal under section 254(2) of the Act is only to rectify an error apparent from the record. It does not empower the Tribunal to recall its earlier order dated 6-12-2007, for which the miscellaneous application was filed on 6-8-2012. It was submitted on behalf of the petitioner that the application under section 254(1) of the Act would be the only provision under which an application could be made for recall of an order, as under section 254(2) of the Act only the order can be rectified but cannot be recalled. We find that there is an error apparent on record and the miscellaneous application is to correct the error apparent from the record. The consequence of such rectification application being allowed may lead to a fresh hearing in the matter after having recalled the original order. However, the recall, if any, is only as a consequence of rectifying the original order. It is pertinent to note that section 254(2) of the Act does not prohibit the recall of an order. In fact the power/jurisdiction of the Tribunal to recall an order on rectification application made under section 254(2) of the Act is no longer res integra. The issue stands covered by the decision of the apex court in Asstt. CIT v. Saurashtra Kutch Stock Exchange Ltd. (2008) 305 ITR 227 (SC) which held that though the Tribunal has no power to review its own order, yet it has jurisdiction to rectify any mistake apparent on the face of the record and as a consequence, therefore, the Tribunal can even recall its order. In the above case, before the apex court on 27-10-2000, the Tribunal dismissed the appeal of stock exchange holding that it was not entitled to exemption under section 11 read with section 12 of the Act. On 13-11-2000, the stock exchange filed a rectification application under section 254(2) of the Act before the Tribunal. The Tribunal by its order dated 5-9-2001, allowed the application and held that there was a mistake apparent on the record which required rectification. Accordingly, the Tribunal recalled its order dated 27-10-2000, for the purpose of entertaining the appeal afresh. The Revenue filed a writ petition in the Gujarat High Court challenging the order dated 5-9-2001. The above challenge by the Revenue was turned down by the Gujarat High Court. The Revenue carried the matter in appeal to the apex court which also dismissed the appeal of the Revenue. The apex court observed that the Tribunal in its original order while dismissing the stock exchange (assessee’s) appeal overlooked the binding decisions of the jurisdictional High Court. This mistake was corrected by the Tribunal under section 254(2) of the Act. The Supreme Court held that the rectification of an order stands on the fundamental principle that justice is above all and upheld the exercise of power under section 254(2) of the Act by the Tribunal in recalling its earlier order dated October 27, 2000. Thus, recall of an order is not barred on rectification application being made by one of the parties. In these circumstances, the application would be an application for rectification of the order dated 6-12-2007, and would stand governed by section 254(2) of the Act.
17. In the facts of the present case there can be no denial that the order dated 6-12-2007, suffers from an error apparent from the record.
The error is in having ignored the mandate of rule 24 of the Tribunal Rules which required the Tribunal to dispose of the matter on the merits after hearing the respondents. In these circumstances, an application for rectification would he under section 254(2) of the Act. The recall of an order would well be a consequence of rectifying an order under section 254(2) of the Act. In these circumstances, we find no reason to interfere with the order of the Tribunal holding that the miscellaneous application filed by the appellant is barred by limitation under section 254(2) of the Act as it was filed beyond a period of four years from the order sought to be rectified.
18. Before concluding, we would like to make it clear that an order passed in breach of rule 24 of the Tribunal Rules, is an irregular order and not a void order. However, even if it is assumed that the order in breach of rule 24 of the Tribunal Rules is an void order, yet the same would continue to be binding till it is set aside by a competent tribunal. In fact, the apex court in the Sultan Sadik v. Sanjay Raj Subba (2004) 2 SCC 377 observed as under :–
“Patent and latent invalidity
In a well known passage Lord Radcliffe said:
‘An order, even if not made in good faith, is still an act capable at legal consequences. It bears no brand of invalidity upon its forehead. Unless the necessary proceedings are taken at law to establish the cause of invalidity and to get it quashed or otherwise upset, it will remain as effective for its ostensible purpose as the most impeccable of orders.’
This must be equally true even where the ‘brand of invalidity’ is plainly visible : for there also the order can effectively be resisted in law only by obtaining a decision of the court.”
Further, the Supreme Court in Sneh Gupta v. Devi Sarup (2009) 16 SCC 194 has observed :–
“We are concerned herein with the question of limitation. The compromise decree, as indicated herein before, even if void was required to be set aside. A consent decree as is well known, is as good as a contested decree. Such a decree must be set aside if it has been passed in violation of law. For the said purpose, the provisions contained in the Limitation Act, 1963, would be applicable. It is not the law that where the decree is void, no period of limitation shall be attracted at all.”
Therefore, in this case also the period of four years from the date of order sought to be rectified/recalled will apply as provided in section 254(2) of the Act. This is so even if it is assumed that the order dated 6-12-2006, is a void order.
19. We shall now answer the questions arising in this case as raised by us in paragraph 4 above as under :–
Question (a): No. The Tribunal has no power in terms of rule 24 of the Tribunal Rules to dismiss an appeal before it for non-prosecution.
Question (b): The miscellaneous application for recall of an order falls under section 254(2) of the Act and not under section 254(1) of the Act.
Question (c): Does not arise in view of our response to query (b) above.
20. In view of the reasons given herein above, we find the Tribunal was correct in dismissing the miscellaneous application by its order dated 10-4-2013, as being beyond the period of four years as provided under section 254(2) of the Act.
21. Accordingly, the petition is dismissed with no order as to costs.”
6. In view of the facts and circumstances of the case as well as the decision of the Hon’ble Bombay High Court in the case of Bharat Petroleum Corpn. Ltd. (supra), we hold that the miscellaneous petition filed by the assessee are beyond the period of limitation as provided under section 254(2) and are not maintainable. Accordingly the same are dismissed being barred by limitation.
7. In the result, the miscellaneous petition filed by the assessee is dismissed.