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2018 (2) TMI 589 - AT - Income TaxMaintainability of miscellaneous petition u/s 254 - limitation period provided for rectification of the mistake - Held that - By Virtue the amendment in the provisions of Section 254(2) of the Act w.e.f. 01.06.2016 the time period within which the mistake apparent from record can be rectified has been reduced from 4 years to 6 months. There is no quarrel on the point that this amendment in Section 254(2) cannot be given effect retrospectively so as to take way of right of the parties to file the application of rectification. The miscellaneous petition filed by the Revenue on 22.05.2017 is beyond the period of limitation expired on 30.11.2016 and according the same is not maintainable.
Issues Involved:
1. Maintainability of the miscellaneous petition filed by the Revenue. 2. Applicability of the amended provisions of Section 254(2) of the Income Tax Act, 1961. Issue-wise Detailed Analysis: 1. Maintainability of the Miscellaneous Petition Filed by the Revenue: The Revenue filed a miscellaneous petition seeking the recall of an order dated 18.12.2015, which was dismissed due to a low tax effect. The Revenue argued that the tax effect was actually more than Rs. 10,42,227/- when surcharge and education cess were considered. The assessee raised a preliminary objection, arguing that the petition was barred by limitation. The assessee contended that, post the amendment to Section 254(2) by the Finance Act, 2016, the limitation period for filing a miscellaneous application for rectification of a mistake was reduced to six months from the end of the month in which the order was passed. Since the impugned order was passed in December 2015, the limitation period expired on 30.11.2016, making the petition filed in May 2017 untimely and therefore not maintainable. 2. Applicability of the Amended Provisions of Section 254(2) of the Income Tax Act, 1961: The Revenue argued that since the order was passed prior to the amendment, the unamended provisions should apply, which provided a four-year limitation period for rectification of mistakes. They relied on the decision of the Hon’ble Madhya Pradesh High Court in the case of District Central Cooperative Bank Ltd. vs. Union of India. The Tribunal considered the rival submissions and relevant material on record. It was noted that the amendment to Section 254(2) reduced the limitation period from four years to six months, effective from 01.06.2016. The Tribunal agreed that this amendment could not be applied retrospectively to extinguish existing rights. However, it clarified that for orders passed before the amendment, the six-month limitation period would start from the amendment date, i.e., 01.06.2016. Therefore, the limitation period for the Revenue's petition expired on 30.11.2016, making the petition filed on 22.05.2017 beyond the period of limitation. The Tribunal also referenced the decision of the Bangalore Benches in the case of Smt. Padma K. Bhat vs. ACIT, which held that the amended six-month limitation period must be strictly adhered to, and there was no provision for condonation of delay under the Income Tax Act. Conclusion: The Tribunal concluded that the miscellaneous petition filed by the Revenue was beyond the period of limitation and thus not maintainable. The petition was dismissed on these grounds. Order Pronounced: The order was pronounced in the open court on 27/12/2017.
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