2023 (5) TMI 1258 - AT - Income Tax

Rectification of mistake u/s 154 - Jurisdictional High Court case has not been considered - claim of long term capital loss / short term capital loss on the sale of the shares rejected as same was not filed in return of income as per sec 139(1) - assessee revised the return of income filed u/s 153A wherein the assessee revised the long term capital loss and offered the same as short term capital loss - Tribunal has not allowed either the claim of the long term capital loss filed in the original return of income u/s 153A or claim of short term capital loss filed in the revised return of income u/s 153A - assessee submitted that this loss from the sale of the shares was revised as shares were held only for a period of 35 ( thirty five) months and therefore eligible for short term capital loss only. HELD THAT - As decided in the case of JSW Steel Ltd. 2020 (2) TMI 307 - BOMBAY HIGH COURT wherein it is held that in case of the abated assessment new/fresh claim made in the return of income filed u/s 153A of the Act is eligible for deduction. Since, in the case of the assessee the decision of the Jurisdictional High Court has not been considered which is a mistake of the law apparent from record as held in the case of ACIT v. Saurashtra Kutch Stock Exchange Ltd. 2008 (9) TMI 11 - SUPREME COURT that non-consideration of decision of the Jurisdictional High Court or Supreme Court is a mistake apparent from record and which can be rectified u/s 254(1) of the Act. Miscellaneous Application of the assessee is allowed.

Summary

Issues Involved:
The issues involved in the judgment are seeking rectification/recall of the order of the Tribunal dated 14.06.2022 passed in ITA No. 1402/Mum/2021 for assessment year 2016-17.

Issue 1: Rectification of Order
The assessee filed a Miscellaneous Application seeking rectification/recall of the Tribunal's order. The original return of income filed claimed a loss, which was subsequently revised after a search and seizure action. The Tribunal did not allow the claim of long term capital loss or short term capital loss. The assessee argued that the Tribunal's findings were inconsistent with the decision of the Hon'ble Bombay High Court in a similar case, where it was held that in case of abated assessment, new claims can be made in the return of income filed under section 153A. The Ld. Counsel contended that the Tribunal's non-consideration of the High Court's decision was a mistake of law apparent from the record and sought rectification/recall of the order.

Issue 2: Legal Interpretation
The Departmental Representative relied on a Supreme Court decision and argued that the Tribunal is not authorized to recall its order under section 254(2) of the Act. However, the Ld. Counsel of the assessee referenced a decision of the Jurisdictional High Court, which stated that in cases of abated assessment, new claims made in the return of income filed under section 153A are eligible for deduction. The Tribunal acknowledged this legal interpretation and noted that the original return loses its originality in such cases, allowing for legitimate claims to be raised in the subsequent return filed under section 153A. The Tribunal found that the decision of the Jurisdictional High Court had not been considered, constituting a mistake of law apparent from the record, which could be rectified under section 254(1) of the Act. Consequently, the Tribunal recalled the order for reconsideration in light of the High Court's decision.

Conclusion:
The Tribunal allowed the Miscellaneous Application of the assessee, recalling the order for further consideration based on the decision of the Hon'ble Jurisdictional High Court. The matter was heard promptly as both parties agreed to argue the main appeal on the same day.

This summary provides a detailed breakdown of the issues involved in the judgment, highlighting the legal interpretations and arguments presented by both parties, leading to the decision to recall the order for reconsideration.