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TMI Blog2020 (12) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... on ble High Court passed under S. 260A and as a consequence, no rectification of the existing order of the Tribunal rendered only on point of jurisdiction is permissible. However, the doctrine of merger is not a doctrine of universal or unlimited application. It will depend on the nature of jurisdiction exercised by the superior forum and the content or subject matter of challenge as extensively dealt with by Hon ble Supreme Court in the case of Kunhayammed vs. State of Kerala [ 2000 (7) TMI 67 - SUPREME COURT] - Thus, doctrine of merger would not extend to issues on merits remaining undecided by the Tribunal or by the Hon ble High Court. There appears to be no bar exercising its inherent and statutory powers of Tribunal in revisiting its earlier action with a limited purpose of adjudication of grounds which remained undecided. In the instant case, it is the Tribunal which has committed error in restricting itself to legal ground and in not addressing itself on certain other grounds of substantial nature without any fault attributable to the assessee. In such a situation, the cause of substantial justice deserves to be preferred over the technical considerations pitted a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee with reference to Section 158BD of the Act. It was pointed out in the present MA that the grounds concerning objections on merits of additions were not adjudicated by the Tribunal at all causing grave prejudice to the assessee. A prayer was thus made to supplement/ modify the order of Tribunal for adjudication of grounds not disposed off in the previous order rendered by the tribunal dated 15-05- 2009 2. Briefly stated, by way Tribunal order in IT(SS) A No. 18/ Ahd/2000 dated 15. 05. 2009, the block assessment under appeal was annulled by the ITAT on the ground that assessment framed in the case of the assessee is invalid on the contours of Section 158BD of the Act and consequently, the assessment proceedings under s.158BC of the Act in pursuance of jurisdiction wrongly acquired under s. 158BD of the Act was found to be nonest and void ab initio and thus bad in law. The ITAT thus annulled the block assessment itself leaving grounds of appeal on merits of additions un-adjudicated in the following terms as per para 8 of its order reproduced below: Since, we have already annulled the assessment, therefore, the adjudication of other grounds taken by the assessee will b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the date of cause of action arising to the assessee. 6. When the Miscellaneous Application seeking restoration of substantive appeal of the assessee was placed for hearing before the Tribunal for modification of earlier order, the learned AR for the assessee submitted at the outset that the Tribunal had erroneously delivered judgment on legal point of jurisdiction alone whereby the block assessment was rendered a nullity. However, while discharging its judicial function, the Tribunal has omitted to consider other grounds simultaneously urged by the assessee on the correctness of additions/ disallowance on merits as made in the assessment framed in pursuance of block assessment made under s.158BC r. w. s. 158BD of the Act. It was reiterated on behalf of the assessee that the Tribunal, in its order, which is subject matter of present Miscellaneous Application, had agreed with the contention of the assessee on legal ground and quashed the assessment framed under s.158BC r.w. s. 158BD at the threshold and thus suo motu restrained itself from adjudicating other grounds raised. It was thus pointed out that the Tribunal owe sole responsibility for omission to adjudicate all relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the other hand, submitted that the provision of Section 254( 2) of the Act is meant to provide the Tribunal with a mechanism to rectify mistakes apparent from record within the stipulated time period. The limitation period is meant to give quietus to the litigation on lapse of time period. The proposed rectification thus cannot be carried out owing to bar of limitation, even if, the mistake committed by the Tribunal is apparent from record. 10. We have given our utmost consideration to the facts and peculiar circumstances of the present case, the materials to which our attention was invited and the rival submissions. The question posed before us is whether the Tribunal is empowered to condone the delay in peculiar circumstances where a grave prejudice has caused to the assessee for omission of Tribunal to adjudicate grounds on merits and restraining itself to legal point which was later reversed by the Superior wisdom of Jurisdictional High Court. 11. It is the case of the assessee that the present application is not placed for rectification of any observations of ITAT in the previous order per se. It was contended that the objective of the application is to enable the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee, however, insists that starting point of limitation for the purpose of rectification of Tribunal order should be reckoned from the date when a bonafide cause of action arose non- disposal of grounds of substantial nature regardless of the date of order of the Tribunal. 14. As noted, the facts of case confronts a peculiar and rare situation indeed. In the instant case, the doctrine of merger of the order of ITAT with that of Hon ble High Court would apply only to the extent, the subject matter of the order of ITAT and that of Hon ble High Court is the same. The order of ITAT in respect of legal point thus stands merged with the appellate order of the Hon ble High Court passed under S. 260A and as a consequence, no rectification of the existing order of the Tribunal rendered only on point of jurisdiction is permissible. However, the doctrine of merger is not a doctrine of universal or unlimited application. It will depend on the nature of jurisdiction exercised by the superior forum and the content or subject matter of challenge as extensively dealt with by Hon ble Supreme Court in the case of Kunhayammed vs. State of Kerala 2001 (129) E.L.T. 11 (S.C.). Thus, doctrine of mer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the Tribunal to set right the injustice by recalling earlier order with a view to pass order on remaining points. 16. This apart, there can be another plausible school of thought to condone the delay. Section 253( 5) of the Act specifically refers to the judicial power of the Tribunal to condone the delay and admit the appeal or cross objection etc. for adjudication. However, Section 254( 2) of the Act does not expressly refer to such judicial power but Section 254( 2) of the Act is not water-tight. Section 5 of the Limitation Act, 1963 refers to the powers of the Courts and Tribunal to condone the delay in appropriate circumstances. The Income Tax Act, 1961 itself provides that the provisions of the civil procedure code relating to appeals, procedures etc. as far as possible are applicable. The power to condone the delay thus needs be read to be existent by virtue of the Limitation Act. We may draw parallel from the judgment of the Hon ble Bombay High Court ( Panji Bench) in the case of CIT vs. Velingkar Brothers (2007) 289 ITR 382 (Bombay Full Bench) in the context of appeals to High Court as provided in Section 260A of the Act . Erstwhile Section 260A of the Act, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... till wider. Technicalities apart, if the Court is satisfied of the injustice, then it is under obligation to set it right by recalling its order. Hence, the Hon ble Supreme Court has yet again reiterated that Emblem of justice stands tall and technicalities would not stand in its way for Courts to exercise its inherent powers to cure the mistake. 19. The headnote in the case of CIT vs. Hansha Agencies (P.) Ltd. 255 ITR 493 (P H) reads as under: Appeal ( Tribunal)- Mistake apparent- Issued left undecided in first appeal- CIT( A) had accepted assessee' s appeal on the ground of l imitation but had not gone into the other grounds- Revenue' s appeal dismissed by Tribunal but High Court answered the reference in favour of Revenue and Tribunal then accepted Revenue' s appeal- Assessee had no occasion to file any cross- appeal before the Tribunal for the simple reason that the entire assessment had been annulled- It would be wholly unjust and unfair if the assessee is denied an opportunity to have i ts case considered by the appellate authority on other issues- Thus, the order of the Tribunal recalling i ts earlier decision and remanding the case to the CIT( A) for a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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