2022 (5) TMI 1601 - AT - Income Tax

Rectification of mistake - validity of Revision u/s 263 as barred by limitation u/s.153(5) - order of fresh assessment in pursuance of an order u/s 263 setting aside or cancelling an assessment, may be made at any time before the expiry of 9 months from the end of the financial year - DR submitted that the Tribunal has erred in considering the amended provisions of Sec.153(3) since the new time-line has come into force only w.e.f. 01.06.2016 by Finance Act, 2016. It has been submitted that the order u/s 263 was passed on 19.12.2014. HELD THAT - We are of the prima-facie opinion that it appears to be a case of wrong application of law which would require our interference u/s 254(2). Accordingly, the order stand recalled. The registry is directed to fix the appeal for fresh hearing before regular bench after intimating both the sides.

Summary

Issues:
1. Recall of Tribunal order passed in ITA No.3039/Chny/2018.
2. Delay condonation for filing a Miscellaneous Petition.
3. Interpretation of provisions of Sec. 153(3) and Sec. 254(2) of the IT Act, 1961.

Issue 1: Recall of Tribunal Order:
The Appellate Tribunal ITAT Chennai received a Miscellaneous Petition from the Revenue seeking the recall of the Tribunal order passed in ITA No.3039/Chny/2018. The Tribunal had quashed an order passed by the Ld. AO on 26.02.2016, which was a result of a revisional order u/s 263. The Tribunal based its decision on the provisions of Sec. 153(3), which stipulated a time limit for passing fresh assessment orders following a u/s 263 order. As the order was passed beyond the specified time limit, the Tribunal quashed it. The Revenue sought the recall of this order, which was allowed by the Tribunal.

Issue 2: Delay Condonation:
The Revenue requested the condonation of a 55-day delay in filing the Miscellaneous Petition. The delay was attributed to the lockdown due to the Covid-19 pandemic, which hindered the timely submission of the petition. The Revenue provided a detailed timeline of events leading to the filing of the petition and highlighted the unintentional nature of the delay. Considering the exceptional circumstances of the pandemic and the Supreme Court's order extending the limitation period, the Tribunal condoned the delay and admitted the petition for adjudication.

Issue 3: Interpretation of Statutory Provisions:
During the hearing, the Ld. Sr. DR argued that the Tribunal erred in applying the amended provisions of Sec. 153(3) retroactively, as they came into force from 01.06.2016. The Ld. Sr. DR contended that the order u/s 263 was passed on 19.12.2014, and under the old provisions of Sec. 153(2A), the order dated 26.02.2016 was well within the limitation period of one year. The Ld. Sr. DR emphasized that the order was passed within the prescribed time frame calculated from the date the order u/s 263 was issued. The Tribunal, after considering the arguments and the petition, concluded that it was a case of wrong application of law necessitating their intervention under Sec. 254(2). Consequently, the Tribunal recalled the order dated 23.12.2020 and directed a fresh hearing before the regular bench after informing both parties.

In conclusion, the Tribunal allowed the petition, recalling the previous order and setting the stage for a fresh hearing, acknowledging the complexities of statutory interpretation and the exceptional circumstances leading to the delay in filing the petition.