Bipinchandra Chimanlal Doshi v. Dy. CIT
[Miscellaneous Application No. 215/Ahd/2017 (in IT(SS)A No. 18/Ahd/2000), dt.
2-12-2020] : 2020 TaxPub(DT) 5025 (Ahd.-Trib.)
Recalling order of ITAT under section 254(2) on principles
of equity despite lapse of limitation
Facts:
Assessee's block assessment case under section 158BD was
adjudicated by the ITAT where in as against a number of appeal points the ITAT
held that the block assessment itself was invalid. Beyond this the rest of the
points of appeal were not discussed and dismissed as infructuous given the
quashing of the block assessment itself. Subsequently revenue won the appeal in
the high court and a SLP of the assessee was also dismissed at Supreme Court on
the validity of the block assessment thereby reversing the ITAT order. The
assessee moved this miscellaneous application before the ITAT requesting that
though time limit for recalling an ITAT order as being erroneous has become
time barred, the rest of the dismissed points of their ITAT appeal be re-adjudicated
in the light of the high court verdict upholding the block assessment. Their
plea was that in principles of equity and administration of justice they be
granted the right of rehearing the rest of the appeal points which were
dismissed simply for no fault of theirs and the time limit under section 254(2)
for recalling an order cannot stand in the way of this. The order of ITAT
passed without hearing the rest of the appeal points was thus also erroneous to
the extent they did not grant assessee equity of justice under the law.
Held in favour of the assessee that the miscellaneous
application deserves admittance on principles of equity.
Doctrine of merger of the high court verdict with the ITAT
order whereby the reversal of the ITAT order on block assessment cannot stand
in the way to rehear the missed points of the original ITAT appeal. To that
extent the time limit needs to be diluted to admit justice as per law. The
order of ITAT to the extent it did not hear all the points is also one way
erroneous as per law.
Applied:
CIT v. Hansha Agencies (P.) Ltd. (2002) 255 ITR 493
(P&H) : 2002 TaxPub(DT) 0495 (P&H-HC)
Editorial Note: The
decision is a landmark judgment to the extent it discusses threadbare section
254(2) and the unusual circumstances in which the M.A. has got reinstated.