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2014 (3) TMI 843 - AT - Income TaxRectification of order Bar of limitation - Whether the orders u/s. 201(1) and 201(lA) passed by the AO were barred by limitation Held that - The Tribunal observed that the order passed for the A.Ys. 2002-03 and 2003-04 is within the time limit, it is incumbent upon the Tribunal to remit the issue back to the CIT(A) to decide the same on merit with reference to the issue of TDS deduction - As the Tribunal failed to do so, it is fair to correct the error committed by the Tribunal and remit the issue back to the file of the CIT(A) to decide the issue raised by the assessee. The powers of the Tribunal are co-extensive with the powers of the AO and that of the first appellate authority and are, in fact, wider powers than those authorities, subject to the limitation that the Tribunal does not have the power to enhance the assessment which power has been specifically conferred upon the Commissioner (Appeals) u/s 251(1)(a) of the Act Relying upon CIT v. Mahalaxmi Textile Mills Ltd. 1967 (5) TMI 4 - SUPREME Court - the doctrine of incidental or implied power has been recognized for the exercise of powers by the Appellate Tribunal - On the same logic it can be said that the Tribunals which has wide powers in respect of the subject-matter of an appeal before it, can decide any question which is material to the subject matter even though it was not raised - Where particular issue has been omitted to be considered or has not been adjudicated properly or where perverse findings have been recorded in total disregard of the material on record, the Tribunal is competent enough to set aside the order of the lower appellate authority to that extent, although no specific ground is taken for that purpose by the concerned party. Whether a mistake can be pointed out on the part of ITAT even when the assessee did not seek any relief from the Tribunal Held that - The Tribunal while reversing the order of Commissioner (Appeals) on the point of validity of notice u/s 148, should have also directed the Commissioner (Appeals) to decide the other grounds on merits - The omission to do so i.e., not restoring the matter to the file of Commissioner (Appeals) and not issuing direction for adjudicating the grounds on merit, therefore, amounted to be a mistake on the part of the Tribunal thus, the CIT(A) is directed to decide the appeals relating to A.Ys. 2002-03 and 2003-04 on merit of the issue raised by the assessee Decided partly in favour of Assessee.
Issues Involved:
1. Limitation period for passing orders under Section 201(1) and 201(1A) of the Income-tax Act, 1961. 2. Validity of the orders passed by the Assessing Officer (AO) for A.Ys. 2001-02, 2002-03, and 2003-04. 3. Application of the Special Bench decision in the case of Mahindra & Mahindra Ltd. vs. DCIT. 4. Rectification of mistakes apparent from the record in the Tribunal's order dated 08-08-2013. 5. Remittance of issues to the CIT(A) for adjudication on merits. Detailed Analysis: 1. Limitation Period for Passing Orders under Section 201(1) and 201(1A): The main issue in the appeals was whether the orders under Section 201(1) and 201(1A) passed by the AO were barred by limitation. The Department argued that there was no limitation period prescribed for the recovery of taxes due to the omission of Section 231 by the Direct Tax Laws (Amendment) Act, 1987. The Department relied on the Special Bench decision in the case of Mahindra & Mahindra Ltd. vs. DCIT, which prescribed a 4 or 6-year time limit for passing such orders, depending on the amount of income involved. 2. Validity of the Orders Passed by the AO: The Tribunal observed that the orders for A.Ys. 2002-03 and 2003-04 were passed within the 6-year time limit and thus were not barred by limitation. However, the order for A.Y. 2001-02 was held to be barred by limitation as it was passed beyond the time limit of 4 years from the end of the relevant assessment year. 3. Application of the Special Bench Decision in Mahindra & Mahindra Ltd. vs. DCIT: The Tribunal considered the Special Bench decision in Mahindra & Mahindra Ltd., which stated that the maximum time limit for passing orders under Section 201(1) and 201(1A) is the same as prescribed under Section 149 of the Act. The Tribunal held that the orders for A.Ys. 2002-03 and 2003-04 were within the prescribed time limits and thus valid. 4. Rectification of Mistakes Apparent from the Record: The assessee filed Miscellaneous Applications (MAs) seeking rectification of the Tribunal's order dated 08-08-2013, arguing that the Tribunal's conclusions were not in accordance with the Special Bench decision in Mahindra & Mahindra Ltd. The Tribunal acknowledged that there was a mistake in not remitting the issues back to the CIT(A) for adjudication on merits for A.Ys. 2002-03 and 2003-04. The Tribunal directed the CIT(A) to decide the appeals on merits, as the CIT(A) had only decided the additional legal ground without addressing the merits of the case. 5. Remittance of Issues to the CIT(A) for Adjudication on Merits: The Tribunal found merit in the assessee's argument that the CIT(A) should decide the issues on merits, particularly regarding the liability to deduct TDS on various payments. The Tribunal directed the CIT(A) to adjudicate the issues raised by the assessee for A.Ys. 2002-03 and 2003-04 on merits. Conclusion: The Tribunal rectified its earlier order by directing the CIT(A) to adjudicate the issues on merits for A.Ys. 2002-03 and 2003-04. The order for A.Y. 2001-02 was held to be barred by limitation and thus dismissed. The MAs filed by the assessee for A.Ys. 2002-03 and 2003-04 were partly allowed, and the MA for A.Y. 2001-02 was dismissed. The final result was that ITA No. 1516/Hyd/2008 was dismissed, and ITA Nos. 314 and 315/Hyd/2012 were partly allowed.
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