2019 (2) TMI 978 - AT - Income Tax

Order u/s 254 (1) passed beyond the period of 90 days from the date of conclusions of its hearing - Held that - The Hon ble Bombay High Court in the case of Otter Club Vs. Director of Income Tax (Exemptions) 2017 (1) TMI 1242 - BOMBAY HIGH COURT has held that the impugned order rejecting rectification application has not been considered the rule 34(8) of the Tribunal Rules and the binding decision, therefore, the order is not sustainable. In the said case, the Tribunal had passed order u/s 254 (1) beyond the period of 90 days from the date of conclusions of its hearing. The assessee filed application for rectification of the order on the ground that the order was in breach of Rule 34(5)(c) of the Income Tax Appellate Tribunal Rules and the delay had resulted in prejudice to the assessee. The Hon ble jurisdictional High Court set aside the order being not sustainable and restored the miscellaneous petition to the Tribunal for fresh consideration and dispose of in accordance with law. Since, in the present case, the order has been pronounced one day beyond 90 days prescribed under the Rules, we respectfully following the order of the Hon ble High Court discussed above, recall the order dated 09.11.2017 without going into the merits of the other grounds raised in the application, for fresh hearing. Accordingly, we direct the registry to fix the case for fresh hearing by the regular Bench in the ordinary course.

Summary

Issues:

Rectification of mistake apparent in the order passed by the Bench beyond the prescribed 90 days after the final hearing of the appeal. Contention regarding the VAT rate of the assessee's business and the confirmation of 12.5% instead of 4%.

Analysis:

The assessee filed a miscellaneous application seeking rectification of a mistake apparent in the order passed by the Bench beyond the 90-day limit after the final hearing of the appeal, citing the precedent set by the Hon'ble Bombay High Court in a specific case. The counsel for the assessee argued that the order should be recalled for a fresh hearing in line with the High Court's decision. On the other hand, the Departmental Representative did not dispute the delay in passing the order but opposed the assessee's claim regarding the VAT rate discrepancy and the confirmation of 12.5% instead of 4%.

Upon reviewing the submissions and the relevant record, the Bench acknowledged that the order was indeed pronounced one day beyond the 90-day limit set by the ITAT Rules. Referring to the judgment of the Hon'ble Bombay High Court in a similar case, it was noted that the High Court had held that an order passed beyond the prescribed period was unsustainable. In that case, the High Court had set aside the order and directed a fresh consideration by the Tribunal. Therefore, the Bench decided to recall the order dated 09.11.2017 without delving into the other grounds raised in the application, following the High Court's ruling. The case was directed to be fixed for fresh hearing by the regular Bench as per the usual procedure.

In conclusion, the miscellaneous application filed by the assessee was partly allowed, and the order was recalled for fresh hearing in compliance with the judgment of the Hon'ble High Court. The decision was pronounced in the open court on 1st November 2018.