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TMI Blog2020 (1) TMI 971X X X X Extracts X X X X X X X X Extracts X X X X ..... company was picked up for scrutiny and an assessment order dated 28.11. 2008 was passed under Section 143(3) of the Income-Tax Act, 1961 (hereinafter referred as "the Act"), assessing the income at Rs. 16,84,945/-, by making an addition of Rs. 59,52,643/-. Aggrieved with the aforesaid order, petitioner company preferred an appeal before Commissioner of Income Tax (Appeals) (hereinafter referred as "CIT(A)") who vide order dated 30th September, 2014, granted partial relief by deleting addition of Rs. 34,17,138/- and directed the Assessing Officer (AO) to grant further relief of Rs. 6,21,890/- after verification. However, the addition of Rs. 19,00,000/- was confirmed. The Petitioner company then challenged the said order before the ITAT by filing an appeal on 11.12. 2014, which was heard on 30.08.2016 and later dismissed vide order dated 18.10. 2016. In the said order, the ITAT, while noting that no one was present on behalf of the assessee at the time of hearing, proceeded to dispose of the appeal, observing that notice was sent to the assessee on 15.07.2016 at the address mentioned in the memo of appeal and despite that, the assessee remained unrepresented. It was further noted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Counsel for the assessee and stated that this misc. application filed by the assessee is time barred and may be dismissed as such. 4. After hearing both the parties and perusing the records as well as the provisions of law as well case laws cited by the Ld. Counsel for the assessee, we note from the office note that this Misc. Application has been filed on 08.03.2018 for recalling the order of the Tribunal dated 18.10.2016, which is beyond the limitation period as prescribed under section 254(2) of the I.T. Act, 1961. For the sake of convenience, the relevant portion of the provisions of section 254(2) is reproduced under:- (2) The Appellate Tribunal may, at any time within [six months from the end of the month in which the order was passed] with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1), and shall make such amendment if the mistake is brought to its notice of the assessee or the Assessing] Officer..." 5. Keeping in view of the aforesaid provisions of Section 254(2) of the I.T. Act, 1961, this Bench has no power to even condone the delay. Hence, the Bench is unable to accept the request of the Assessee' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound for non-prosecution, was certainly unwarranted. In the erstwhile regime, in respect of Section 33(4) of the erstwhile Income-Tax Act, 1922, the Supreme Court in the case of CIT vs. S.Chenniappa Mudaliar, (1969) 74 ITR 41, taking into consideration the decision of the special bench of the High Court of Madras in S. Chenniappa Mudaliar v. CIT [1964] 53 ITR 323 (Mad.), examined the position of law and held as under: "The Special Bench of the High Court noticed the previous history of rule 24 as also the terms in which it came to be framed after the passing of the Income-tax Act, 1961, which enables the Tribunal, in its discretion, either to dismiss the appeal for default or to hear it ex parte in case of non-appearance of the parties and further enables the Tribunal to set aside the dismissal on sufficient cause being shown for non-appearance. After referring to various decided cases and examining the relevant provisions of the Act, the Special Bench summed up the position thus [1964] 53 ITR 323, 334 (SB): "To sum up the position, the Appellate Tribunal is the appointed machinery under the Act for finally deciding questions of fact in relation to assessment of income-tax. Its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income-tax v. Arunachalam Chettiar [1953] 23 ITR 180 ; [1953] SCR 460 that the jurisdiction of the Tribunal and of the High Court is conditional on there being an order by the Appellate Tribunal which may be said to be one under section 33(4) and a question of law arising out of such an order. The Special Bench, in the present case, while examining this aspect, quite appositely referred to the observations of Venkatarama Aiyar J. in Commissioner of Income-tax v. Scindia Steam Navigation Co. Ltd. [1961] 42 ITR 589; [1962] 1 SCR 788 indicating the necessity of the disposal of the appeal on the merits by the Appellate Tribunal. This is how the learned judge had put the matter in the form of interrogation: "How can it be said that the Tribunal should seek for advice on a question which it was not called upon to consider and in respect of which it had no opportunity of deciding whether the decision of the court should be sought?" Thus looking at the substantive provisions of the Act there is no escape from the conclusion that under section 33(4) the Appellate Tribunal has to dispose of the appeal on the merits and cannot short-circuit the same by dismissing it for default of appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ord in its order at any time within four years from the date of the order. 61.10 In order to bring certainty to the order of ITAT, the provisions of sub-section (2) of section 254 of the Income-tax Act have been amended to provide that the Appellate Tribunal may rectify any mistake apparent from the record in its order at any time within six months from the end of the month in which the order was passed." 10. Be that as it may, the real question before us is as to what would be the relevant date for the purpose of commencement of period of limitation. To hold the date of the order to be the relevant date for the purpose of calculating the period of six months envisaged under Section 254(2) of the Act, can lead to several absurd and anomalous situations. An order passed without the knowledge of the aggrieved party, would render the remedy against the order meaningless as the same would be lost by limitation while the person aggrieved would not even know that an order has been passed. Such an interpretation would not advance the cause of justice and would not be the correct approach and thus cannot be countenanced. A person who is aggrieved or concerned with an order would legitim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x months should commence from the date of the receipt of the order. In our opinion, the limitation would begin to run when the affected person has the knowledge of the decision. The date when the order was passed cannot be solely determined by referring to the date when the same was signed by the ITAT. We further find that under Section 254 (3) of the Act, the law stipulates that the ITAT shall send a copy of the order passed by it to the assessee and the Principal Commissioner. Further, Rule 35 of the ITAT Rules also requires that the orders are required to be communicated to the parties. For ready reference, Section 254 (3) of the Act and the relevant rule are reproduced hereinunder: "254. Orders of Appellate Tribunal. xxxx xxxx xxxx (3) The Appellate Tribunal shall send a copy of any orders passed under this section to the assessee and to the Principal Commissioner or Commissioner. 35. Order to be communicated to parties. The Tribunal shall, after the order is signed, cause it to be communicated to the assessee and to the Commissioner." 13. From the abovenoted provisions, it emerges that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Act, 1894 contemplates an application seeking reference to the court being filed within six months from the date of the Collector's award. It was held that "the date of the award" cannot be determined solely by reference to the time when the award is signed by the Collector or delivered by him in his office. It must involve the consideration of the question as to when it was known to the party concerned either actually or constructively. If that be the true position, then placing a literal and mechanical construction on the words "the date of the award" occurring in the relevant section would not be appropriate. It is fair and just that a decision is communicated to the party whose rights will ultimately be affected or who will be affected by the decision. The knowledge, either actual or constructive, of the party affected by such a decision, is an essential element which must be satisfied before the decision can be brought into force. Thus construed, the making of the award cannot consist merely of the physical act of writing an award or signing it or even filing it in the office of the Collector; it must involve the communication of the said award to the party concerned ei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . How can a person concerned or a person aggrieved be expected to exercise the right of review conferred by the provision unless the order is communicated to or is known to him either actually or constructively? The words "the date of that order", therefore, mean and must be construed as meaning the date of communication or knowledge, actual or constructive, of the order sought to be reviewed." (emphasis supplied) 15. The assessee had challenged the ex parte order dated 18.10.2016 and consequently, keeping in view, the aforesaid decisions, we are of the considered opinion that the starting point of limitation provided under Section 254 (2) of the Act has to commence from the date of the actual receipt of the judgment and order passed by the ITAT which is sought to be the reviewed. 16. Pertinently, adjudication on the merits of the case by the ITAT is essential for this Court to hear an appeal and the ITAT could not have dismissed the same solely on account of non-appearance of a party. As a result, as of today, the petitioner company is faced with the situation where it cannot exercise its remedy of filing the statutory appeal under Section 260A of the Act, since order dated 18. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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