The Tax Publishers2020 TaxPub(DT) 5025 (Ahd-Trib)

INCOME TAX ACT, 1961

Section 254(2)

Provisions of section 254(2) limiting the period seeking remedy for an manifestly incomplete order rendered at the first instance would not transcend inherent power of Tribunal to enable it deliver decision on undecided grounds which did not merge in the judgment of High Court. In refusing to do so, a grave injustice would result to assessee for no fault and would simply trigger futile litigation and also undesired dissatisfaction in the mind of assessee. Therefore, miscellaneous application of assessee was allowed and order of Tribunal was recalled for limited purpose of adjudication of grounds remaining undecided at the time of disposal of substantive appeal.

Appeal (Tribunal) - Rectification under section 254(2) - Maintainability of MA filed beyond limitation period of 4 years - Where a grave prejudice had caused to assessee for omission of Tribunal to adjudicate grounds on merits and restraining itself to legal point which was later reversed by superior wisdom of jurisdictional High Court

Miscellaneous Application was filed by assessee under section 254(2) on 19-7-2017, i.e., within a period of about 5 months after the judgment was delivered on 27-2-2017 by the jurisdictional High Court with reference to legal point but belatedly after 4 years when seen with reference to the date of appellate order passed by Tribunal which was sought to be rectified. Assessee, in its MA, sought recall of the order of ITAT for adjudication of undecided grounds. Revenue's case was that proposed rectification could not be carried out owing to bar of limitation even if, mistake was apparent from record. Assessee's case was that where a grave prejudice had caused to assessee for omission of Tribunal to adjudicate grounds on merits and restraining itself to legal point which was later reversed by superior wisdom of Jurisdictional High Court. Held: Remedy sought by assessee could not be frustrated on the grounds of bar of limitation without weighing the circumstances of case. An incomplete order wholly attributable to Tribunal itself should not ordinarily cause miscarriage of justice. Fair play is one of the most essential facets of any judicial process. The obligation was cast upon Tribunal to set right and remove the error of an incomplete disposal in conformity with judicial functions endowed upon it. Provisions of section 254(2) limiting the period seeking remedy for an manifestly incomplete order rendered at the first instance would not transcend inherent power of Tribunal to enable it deliver decision on undecided grounds which did not merge in the judgment of High Court. In refusing to do so, a grave injustice would result to assessee for no fault and would simply trigger futile litigation and also undesired dissatisfaction in the mind of assessee. Therefore, miscellaneous application of assessee was allowed and order of Tribunal was recalled for limited purpose of adjudication of grounds remaining undecided at the time of disposal of substantive appeal.

Supported by:S. Nagraj v. State of Karnataka (1993) Supp 4 SCC 595, Esthuri Aswathiah v. CIT (1967) 66 ITR 478 (SC) : 1967 TaxPub(DT) 353 (SC), CIT v. Keshav Fruit Mart (1993) 199 ITR 771 (All.) : 1993 TaxPub(DT) 266 (All-HC), CIT v. Hyderabad Deccan Liquor Syndicate (1974) 95 ITR 130 (AP) : 1974 TaxPub(DT) 71 (AP-HC) and CIT v. Keshav Fruit Mart (1993) 199 ITR 771 (All.) : 1993 TaxPub(DT) 266 (All-HC)

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : Block Period: 1-4-1986 to 31-3-1996 & 1-4-1996 to 1-8-1996



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