2020 (10) TMI 709 - AT - Income Tax

Rectification of mistake u/s 254 - subsequent binding of the Hon ble jurisdictional High Court, which has reversed the earlier decision - eligibility of Deduction u/s 80P - Tribunal have originally dismissed the Revenue s appeal by following the decision The Chirakkal Service Cooperative Bank Ltd 2016 (4) TMI 826 - KERALA HIGH COURT but in Mavilayi Service Co-operative Bank Ltd. 2019 (3) TMI 1580 - KERALA HIGH COURT has held that its earlier decision in the case of The Chirakkal Service Co-operative Bank Ltd. and Others (supra) is not good law and AO has to conduct an inquiry into the factual situation as to the activities of the assessee-society and arrive at a conclusion whether the benefits can be extended or not in the light of the provisions of sub-section (4) of section 80P - period of limitation - HELD THAT - Tribunal is a creature of the statute. It has not having the power to read in or read out of a provision of law. The Legislature in its wisdom has laid down the law and the specific provision relating to the powers of the rectification of mistakes in the order of the Tribunal is in section 254(2) of the Income-tax Act, 1961. Admittedly, the order of the Tribunal is dated 24th October, 2016. The miscellaneous application has been filed on 30.09.2019. The six month period in the present case expired on 30th April, 2017. It shows that the time limit of six month is binding on the hands of the Tribunal. This is in line with the decision of the Hon ble Bombay High Court in the case of Principal CIT v. ITAT 2020 (2) TMI 129 - BOMBAY HIGH COURT As six month period from the end of the month in which the order has been passed has expired, the order passed by the Tribunal cannot be amended by the Tribunal. Consequently, the miscellaneous application filed by the Revenue stands dismissed.

Summary

Issues:
1. Timeliness of filing a Miscellaneous Application by the Revenue.
2. Interpretation of Section 254(2) of the Income-tax Act, 1961 regarding rectification of mistakes in the Tribunal's order.

Analysis:

1. Timeliness of filing a Miscellaneous Application:
The Revenue filed a Miscellaneous Application concerning an order dated 24th October, 2016, in ITA No.409/Coch/2016. The application was based on a subsequent decision by the Hon'ble jurisdictional High Court in The Mavilayi Service Co-operative Bank Ltd. case dated 19.03.2019. The Revenue argued that the High Court's new decision constituted a mistake apparent from the record, warranting the Tribunal to reconsider the matter. However, the learned AR contended that the application was filed on 30.09.2019, well beyond the six-month time limit prescribed by section 254(2) of the Act. The Tribunal emphasized that it lacked the authority to extend this statutory time limit, as per the decision in Principal CIT v. ITAT by the Hon'ble Bombay High Court.

2. Interpretation of Section 254(2) of the Income-tax Act:
The Tribunal highlighted the significance of section 254(2) which governs rectification of mistakes in its orders. The section explicitly states that such rectifications must be made within six months from the end of the month in which the original order was passed. Citing the decision of the Hon'ble Bombay High Court, the Tribunal reiterated that this statutory time limit is binding and cannot be extended. Consequently, since the six-month period had elapsed from the date of the original order in this case, the Tribunal held that it was not empowered to consider the Revenue's Miscellaneous Application. Therefore, the Tribunal dismissed the application filed by the Revenue on the grounds of being time-barred.

In conclusion, the Tribunal's decision was based on a strict interpretation of the statutory provisions governing the rectification of mistakes in its orders. The judgment emphasized the importance of adhering to the prescribed time limits, as outlined in section 254(2) of the Income-tax Act, 1961, and underscored the Tribunal's limited authority in this regard.