2018 (12) TMI 1653 - AT - Income Tax

Rectification of mistake u/s 254 - Tribunal has referred to certain decisions which were not discussed during the course of hearing and the assessee was not granted an opportunity of being heard on this issue, which constitutes a mistake apparent from record - Whether on the facts and circumstances of the case, Explanation (iia) to section 115JB has retrospective effect being clarificatory in nature? - HELD THAT - By following the decision of TIDEL PARK LTD. 2009 (7) TMI 852 - MADRAS HIGH COURT concluded that clause (iic) inserted by the Finance Act, 2015 w.e.f. 01.04.2016 is not applicable to the impugned assessment year 2002-03. But the assessee was not given an opportunity to explain his case vis-a-vis the decision in Tidel Park Ltd. (supra). Thus a mistake has crept into the impugned order of the Tribunal. Thus the order passed by the Bench is recalled and the Registry is directed to fix the appeal for fresh hearing before a regular Bench.

Summary

Issues:
Recall of ITAT order dated 18.08.2017 for AY 2002-03 based on contentions of Ld. counsel and DR; Applicability of retrospective amendment to Explanation 1 to S. 115JB of the Act; Binding effect of Co-ordinate Bench's order on other benches; Consideration of decisions not discussed during hearing; Mistake apparent from record; Opportunity of being heard; Application of clause (iic) inserted by Finance Act, 2015; Followed decision of Hon'ble Madras High Court; Recall of order and fresh hearing before regular Bench.

Analysis:

The applicant filed a Miscellaneous Application seeking the recall of the ITAT order dated 18.08.2017 for AY 2002-03. The Ld. counsel contended that the issue in the present case is identical to a previous case and that the Tribunal had decided in favor of the assessee based on the retrospective nature of the amendment to Explanation 1 to S. 115JB of the Act introduced by the Finance Act, 2015. The applicant argued that the Tribunal's decision in the case of Goldgerg Finance (P) Ltd. for AY 2009-10 should be followed, as it considered the retrospective nature of the amendment. Additionally, the applicant emphasized the binding effect of the Co-ordinate Bench's order on other benches unless reversed by Superior Courts, citing relevant case laws. The applicant also raised concerns about certain decisions not discussed during the hearing and the lack of opportunity to address those issues, pointing out a mistake apparent from the record.

During the proceedings, the Ld. DR opposed the recall, asserting that the Tribunal's decision was error-free after thorough deliberation. However, upon examination, it was noted that the Tribunal had failed to consider the order of the Co-ordinate Bench in the case of Goldgerg Finance (P.) Ltd. for AY 2009-10, which had established the retrospective nature of the amendment to Explanation 1 to section 115JB. The Tribunal's reliance on a decision of the Hon'ble Madras High Court was found to be inapplicable to the assessment year 2002-03. The Tribunal acknowledged the mistake in not allowing the Ld. counsel to address this discrepancy and consequently decided to recall the order and set the appeal for a fresh hearing before a regular Bench.

In conclusion, the Tribunal allowed the Miscellaneous Application, recalling the order dated 18.08.2017 and directing a fresh hearing before a regular Bench. The decision was based on the failure to consider the retrospective nature of the amendment to Explanation 1 to section 115JB and the lack of opportunity for the Ld. counsel to present arguments regarding relevant decisions. The Tribunal's adherence to legal principles and the need for a fair hearing underscored the importance of rectifying errors and ensuring due process in tax matters.