2017 (9) TMI 668 - HC - Income Tax

Rectification of mistake - ITAT passed separate orders for the different AYs despite the facts that all the four AYs, i.e. 2006-07, 2007-08, 2008-09 and 2009-10 being the same - Held that - The Court is of the view that the Petitioner has been able to make out a case to show that the ITAT contradicted itself by passing separate orders in respect of the Assessee s appeals for the aforementioned AYs on different dates. It is not understood as to how the factual matrix for AYs 2007-08, 2008-09 and 2009-10 could be different from that of AY 2006-07 such that it would necessitate contradictory orders being passed in each of the AYs. The ITAT s order dated 31st December 2012 allowing the Assessee s appeal for AY 2006-07 has been sustained by this Court by dismissing the Revenue s appeal on 3rd April 2014. Yet, the ITAT did not follow the said order for AY 2006-07 when it came to the Assessee s appeals for the subsequent years, i.e. 2007-08, 2008-09 and 2009-10. In the considered view of the Court, this was a good enough ground for the Assessee to seek rectification of the order under Section 254 (2) of the Act. Accordingly, the impugned order dated 27th April 2016 passed by the ITAT is hereby set aside.

Summary

Issues:
Challenging ITAT's order on three miscellaneous applications under Section 254(2) of the Income Tax Act, 1961 for AYs 2007-08, 2008-09, and 2009-10.

Analysis:
1. The petitioner, an Assessee, challenged the ITAT's order dated 27th April 2016 on three miscellaneous applications filed under Section 254(2) of the Income Tax Act, 1961 for AYs 2007-08, 2008-09, and 2009-10, related to orders passed by the ITAT on appeals for the respective years.

2. The Assessee underwent a search and seizure operation under Section 132 of the Act in July 2008, following which returns were filed for the relevant assessment years. The AO made additions under Section 69C of the Act, leading to appeals before the CIT (A) and subsequently before the ITAT.

3. The ITAT passed separate orders for each AY, inconsistent in following its own precedents, resulting in contradictory decisions on the Assessee's appeals. The Assessee filed MAs seeking rectification of these orders, which were dismissed by the ITAT in April 2016.

4. The High Court noted the inconsistency in ITAT's orders and found merit in the Assessee's case, setting aside the ITAT's order. The Court held that the Assessee was justified in seeking rectification under Section 254(2) due to the contradictory nature of the ITAT's decisions.

5. Relying on a previous judgment, the Court directed the ITAT to hear the Assessee's appeals afresh for the relevant AYs, considering the subsequent developments and inconsistencies in the ITAT's orders. The Court set aside the ITAT's orders for the AYs in question and restored the appeals to the ITAT for fresh consideration.

6. Consequently, the ITAT was instructed to pass a new order on merits after hearing the parties, with the appeals listed for directions on a specified date. The writ petition was disposed of accordingly, providing relief to the Assessee based on the inconsistencies in the ITAT's orders.