2022 (2) TMI 1273 - AT - Income Tax

Rectification u/s 154 - non-consideration of decision of Jurisdictional High Court - Whether effect of provision of section 234E of the Act is not retrospective and the same is prospective? - HELD THAT - We find that on careful perusal of our order is contrary to the decision is contrary to the finding of jurisdictional High Court as we have missed the material finding of Hon ble High Court. Considering the fact that decision 2021 (7) TMI 1373 - ITAT SURAT is in conflict with the order of Hon ble Jurisdictional High Court therefore this is a mistake apparent on record. Therefore the consolidated order is recalled. Considering the fact that we have recalled the order the hearing of all the appeals is fixed on 30.05.2022 for hearing all the appeals afresh on merit. Parties be informed accordingly copy of this order be kept in all files - All the MA s filed by revenue are allowed.

Summary

Issues:
Rectification/recalling of order dated 01.07.2021 in ITA No.505 to 526/SRT/2018 based on the consideration of decisions by different High Courts.

Analysis:

1. Issue of Consideration of High Court Decisions:
The Revenue filed twenty-two Miscellaneous Applications seeking rectification/recalling of the order dated 01.07.2021, arguing that the Tribunal erred in not considering the decision of the Jurisdictional High Court in the case of Rajesh Kourani vs. Union of India. The Revenue contended that the Tribunal's decision was based on the Karnataka High Court's ruling in the case of Fatheraj Singhvi vs. Union of India, which was not in line with the binding decision of the Jurisdictional High Court. The Revenue emphasized that the non-consideration of the Jurisdictional High Court's decision constituted a mistake apparent in the order, citing precedents such as Union of India vs. Kamalakshi Finance Corporation and CIT vs. Ralson Industries Limited. The Revenue argued that the decision of the Jurisdictional High Court should prevail over the Tribunal's decision due to territorial jurisdiction.

2. Assessee's Defense and High Court Precedents:
On the other hand, the Assessee's representative supported the order dated 01.07.2021, highlighting that the Jurisdictional High Court had not considered the Karnataka High Court's decision in Fatheraj Singhvi vs. Union of India. The Assessee's representative argued that the Karnataka High Court had ruled that the provision of section 234E of the Act was prospective, not retrospective. In response, the Revenue reiterated that the Jurisdictional High Court's decision in Rajesh Kourani vs. Union of India was binding and dissenting findings were present in that case.

3. Tribunal's Decision and Recall of Order:
After considering the arguments from both parties, the Tribunal acknowledged that its order dated 01.07.2021 was contrary to the findings of the Jurisdictional High Court. The Tribunal recognized the mistake in not considering the material finding of the High Court and concluded that the decision needed to be recalled. Consequently, the Tribunal recalled the consolidated order dated 01.07.2021 and scheduled a fresh hearing for all the appeals on 30.05.2022 to be heard on merit. The Tribunal allowed all the Miscellaneous Applications filed by the Revenue, emphasizing the need to align with the binding precedent of the Jurisdictional High Court.

4. Final Outcome:
The Tribunal pronounced the order on 03 March 2022, allowing the Revenue's Miscellaneous Applications and setting a new hearing date to address the appeals afresh based on the considerations of the Jurisdictional High Court's decision and rectifying the mistake apparent in the earlier order.