2019 (4) TMI 850 - AT - Income Tax

Rectification application u/s 254 - Period of limitation - HELD THAT - The date of receipt of the order i.e. 23/01/2018, the application is within time and therefore, we proceed to dispose-off the same as argued before us. Disallowance of lease premium would need correction since while adjudicating the issue, reliance was placed on the decision of this Tribunal for AYs 2007-08 & 2008-09 wherein the matter was decided against the assessee - HELD THAT - Upon perusal, we concur with the same. Accordingly, the last line of para 10 in the stated order may be read as under - Following the orders for earlier years, we dismiss ground no. 5 Applicability of provisions of Section 36(1)(viii) to the assessee - assessee s claim was allowed by the Tribunal relying upon the orders of the Tribunal in assessee s own case for AYs 2007-08 & 2008-09 - HELD THAT - Upon perusal of para 6, we find that it is true that these facts were already noted by the bench while adjudicating the issue. It is not the case of the revenue that certain facts were overlooked which resulted into certain error in the order. The only point urge is that the decision is not acceptable since the issue has not been considered in proper perspective. However, when the decision has been rendered with due appreciation of facts and there are no slippages, it could not be said that there was mistake apparent from record which was amenable to rectification. There is no power with Tribunal to review the issues unless expressly provided under law. Further, the revenue has an alternative remedy under law to contest the decision before higher judicial authorities. Therefore, finding no mistake apparent from record, this plea stand rejected.

Issues:
1. Limitation period for filing rectification application under Section 254(2).
2. Consideration of date of receipt of order for reckoning limitation period.
3. Correcting errors in the Tribunal order regarding disallowance of lease premium.
4. Adjudication of deduction u/s 36(1)(viii) and the proper perspective of the issue.

Analysis:

Issue 1 - Limitation period for filing rectification application under Section 254(2):
The application for rectification sought by the revenue was challenged on the grounds of being time-barred. The Authorized Representative for the assessee argued that the application was filed beyond the six-month period from the date of the order. However, the revenue contended that the order was received after the stipulated time limit. The Tribunal considered the provisions of Section 254(2) and Rule 35 of Income Tax (Appellate Tribunal Rules), 1963. It was concluded that until the order is communicated to the parties, the limitation period does not start. The Tribunal referred to various judicial pronouncements supporting the view that the date of receipt of the order, not the date of passing, should be considered for limitation purposes.

Issue 2 - Consideration of date of receipt of order for reckoning limitation period:
The Tribunal highlighted that the order must be communicated to the respective parties for them to take further action, such as filing rectification. Merely uploading the order on the website does not trigger the limitation period. The Tribunal emphasized that parties need to be served with the order for their rights to contest or file rectification to arise. Applying these principles to the case, the Tribunal found that the rectification application was filed within the limitation period from the date of receipt of the order.

Issue 3 - Correcting errors in the Tribunal order regarding disallowance of lease premium:
The Tribunal acknowledged an error in the order related to the disallowance of lease premium. The revenue pointed out a mistake in the conclusion drawn in a specific paragraph, which was rectified by modifying the last line of that paragraph to align with the orders for earlier years. This correction was made to ensure consistency and accuracy in the Tribunal's decision.

Issue 4 - Adjudication of deduction u/s 36(1)(viii) and the proper perspective of the issue:
Regarding the deduction under section 36(1)(viii), a dispute arose concerning the allocation of expenses to eligible business. The revenue argued that the issue was not considered in the correct perspective by the Tribunal. However, the Tribunal found that the decision was rendered after due consideration of facts and there was no apparent mistake that warranted rectification. It was emphasized that the Tribunal does not have the power to review issues unless explicitly provided by law, and the revenue had the option to challenge the decision through higher judicial authorities.

In conclusion, the rectification application was partly allowed based on the Tribunal's analysis of the issues raised by the revenue, including the limitation period for filing rectification, correction of errors in the order, and the proper adjudication of the deduction issue under section 36(1)(viii).

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