2021 (2) TMI 996 - AT - Income Tax

Rectification of mistake u/s 254 - period of limitation - HELD THAT - The captioned Miscellaneous Application was filed on 24/07/2020, which is clearly beyond the due date as prescribed u/s 254(2) of the Act. The Registry has pointed out the above defect mentioning that this MA is filed beyond the time limit prescribed u/s 254(2) of the I.T. Act, 1961 and therefore, the MA is not maintainable. Departmental Representative submitted that the Revenue would like to get the instructions from the A.O for filing of a petition for condonation of delay. However, in the case of Gayatri Infra Ventures Ltd 2018 (7) TMI 1917 - ITAT HYDERABAD the Coordinate Bench of the Tribunal has held that the delay in filing the Miscellaneous Application cannot be condoned.

Summary

Issues:
1. Recall of Tribunal's order filed beyond the prescribed time limit under Section 254(2) of the Income Tax Act, 1961.
2. Applicability of the Tribunal's power to recall an order under Section 254(2) of the Act.
3. Validity of an order passed in breach of Rule 24 of the Tribunal Rules.
4. Interpretation of limitation period for filing a Miscellaneous Application under Section 254(2) of the Act.

Analysis:
1. The judgment dealt with a Miscellaneous Application (MA) filed by the Revenue seeking the recall of the Tribunal's order dated 05/12/2019. The MA was filed on 24/07/2020, beyond the time limit prescribed under Section 254(2) of the Income Tax Act, 1961. The Registry pointed out the defect, stating that the MA was not maintainable due to being filed beyond the prescribed time limit.

2. The Tribunal cited a previous decision by a Coordinate Bench in the case of Gayatri Infra Ventures Ltd, where it was held that the delay in filing a Miscellaneous Application cannot be condoned. The Tribunal emphasized that the statute provides only a period of six months from the end of the month in which the order was passed for filing an MA under Section 254(2) and that the Tribunal does not have the power to condone the delay beyond this period.

3. The Tribunal referred to the decision of the Hon'ble Bombay High Court in Bharat Petroleum Corpn. Ltd vs. ITAT, which clarified that the Tribunal has the jurisdiction to recall an order on a rectification application made under Section 254(2) of the Act. The Tribunal emphasized that an order passed in breach of Rule 24 of the Tribunal Rules is irregular but not void, and even if assumed void, it remains effective until set aside by a competent Tribunal.

4. The Supreme Court's decision in Sneh Gupta v/s. Dev Sarup was also cited, highlighting that even if a decree is void, it must be set aside within the prescribed period of limitation. The Tribunal concluded that the MA filed by the Revenue was correctly dismissed as non-maintainable, following the decisions of the Higher judiciary and the Coordinate Bench.

In summary, the judgment emphasized the importance of adhering to the prescribed time limits for filing Miscellaneous Applications under Section 254(2) of the Income Tax Act, clarified the Tribunal's jurisdiction to recall orders under certain circumstances, and highlighted the significance of setting aside void orders within the limitation period.