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[2017] 88 taxmann.com 883 (Hyderabad - Trib.)/[2017] 59 ITR(T) 100 (Hyderabad -

Trib.)[12-07-2017]

[2017] 88 taxmann.com 883 (Hyderabad - Trib.)

IN THE ITAT HYDERABAD BENCH 'A'
Srinivas Sashidhar Chaganty
v.
Income Tax Officer*
D. MANMOHAN, VICE-PRESIDENT
AND S. RIFAUR RAHMAN, ACCOUNTANT MEMBER
M.A. NO. 5 (HYD.) OF 2017
IT APPEAL NO. 1420 (HYD.) OF 2015
[ASSESSMENT YEAR 2007-08]
JULY 12, 2017

Section 254 of the Income-tax Act, 1961 - Appellate Tribunal - Powers of (Scope of power) -
Assessment year 2007-08 - Section 254(2) refers to period of limitation reckoning from end of
month in which order is 'passed' and not from 'date of receipt of order' [In favour of revenue]
Section 254(2) refers to the period of limitation reckoning from the end of the month in which the
order is 'passed' and not from the 'date of receipt of the order'. The expression 'passed' in section
254(2) cannot be stretched to mean that the period of limitation should be reckoned from the date of
receipt of the order. Even if a liberal view has to be taken, it can be considered as the date of
uploading of the order, ordinarily anything which is uploaded in the public domain can be accessed
by the public at large and even the assessee would have access to the order and such a date
always be treated as the service of the order.
Words and phrases : Word 'Passed' as occurring in section 254(2) of the Income-tax Act,
1961
CASES REFERRED TO

CIT v. Indian Express (Madurai) (P.) Ltd. [1983] 13 Taxman 441/140 ITR 705 (Mad.) (para 3), CIT v. Sudhir
Choudhrie [2005] 147 Taxman 306/278 ITR 490 (Delhi) (para 3) and S.P. Balasubrahmanyam v. Asst. CIT
[2016] 75 taxmann.com 56/[2017] 245 Taxman 146/394 ITR 366 (Mad.) (para 3).
D.V. Anjaneyulu for the Appellant. Phani Raju, DR, for the Respondent.
ORDER

D. Manmohan, Vice-President - By this application, the assessee seeks recall of the order dated June 21,
2016 on the ground that the Tribunal erred in holding that the assessee did not furnish any evidence with
regard to the unexplained investment, overlooking the fact that the written submissions were filed which
contained detailed explanation.
2. At the outset it may be noticed that as per the present practice followed by the Tribunal, the order was
pronounced on June 21, 2016 in the open court and the time limit, reckoned from the end of the month in
which the order was passed, is six months for seeking recall i.e., parties are entitled to seek rectification of the
said order within six months under section 254(2) of the Income-tax Act, 1961, as amended with effect from
June 1, 2016 which reads as under :
 "254.(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 rectify 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
by the assessee or as the Assessing Officer."
3. The abovementioned provision empowers the Tribunal to suo motu rectify its mistake or enable the parties
to seek rectification within the period of limitation i.e., six months from the end of the month in which the
order was passed. In the instant case, the order was passed/pronounced on June 21, 2016 and from the end of
the month, the period of six months expires on December 31, 2016. The assessee filed the present
miscellaneous application (MA) on January 20, 2017 on the ground that the order was served upon the
assessee on July 5, 2016. Reckoning the time limit from the end of the month of July, the miscellaneous
application filed by the assessee is within the period of limitation. The case of the assessee is that the
procedures as well as the period of limitation set out in the Act; are mainly intended to subserve the interest of
the parties and in tax matters. It cannot be considered as lis between the two parties but only tax adjustment,
as held by the hon'ble Madras High Court in the case of CIT v. Indian Express (Madurai) (P.) Ltd. [1983] 13
Taxman 441/140 ITR 705 (Mad.) at 722). Substantial justice has to be given paramount importance and in this
case, the Tribunal has overlooked the material papers filed and therefore, the assessee should be given one
more opportunity to put forth its grievance by recalling the order passed by the Tribunal. Accordingly, the
learned counsel for the assessee submitted that the expression "order was passed" has to be understood as
"date of receipt of the order by the parties". The learned counsel for the assessee filed brief written
submissions incorporating the provisions of sections 251(2), 254(3) of the Act and rules 34(1) and 35 of the
Income-tax (Appellate Tribunal) Rules, 1963 to submit that it is mandatory to serve a copy of the order on the
parties and hence, the time limit starts only from the "date of receipt of the order". He referred to the orders of
the hon'ble Delhi High Court in the case of CIT v. Sudhir Choudhrie [2005] 147 Taxman 306/278 ITR 490
(Delhi) wherein the court observed that the pronouncement of the order is mandatory so as to facilitate the
parties to lawfully know the result as well as to avoid unnecessary delay in communication of the orders. He,
further, relied upon the decision of the hon'ble Madras High Court in the case of S.P. Balasubrahmanyam v.
Asst. CIT [2016] 75 taxmann.com 56/[2017] 245 Taxman 146/394 ITR 366 (Mad.) at page 34 wherein the
court referred to the provisions of section 12 of the Limitation Act which speaks of the time taken for
obtaining the copy of the decree or order white computing the period of limitation. In paragraph 21 of the
judgment, the hon'ble Madras High Court observed as under (page 377 of 394 ITR) :
"Even taking for granted that the judgments of the apex court are applicable to the case on hand and that
the period of limitation of four years for filing an application for recalling an order filed under section
254(2) of the Income-tax Act, 1961, has to be computed from the date of service of the order, averment
made in the said petition, filed in the year 2015, are bereft of details as to when the order was served in
the address, where the office of the appellant is situated. Order of the Tribunal in I. T. A. No.
638/Mds/2011, has been passed on July 18, 2011, whereas the appellant has filed the petition on July 24,
2015, which is beyond four years from the date of passing of the order by the Tribunal on July 18, 2011.
Though Mr. J.A. Balachander, learned counsel for the appellant submitted that in the normal course,
service of order, on the party would take some time, and therefore the miscellaneous application filed on
July 24, 2015 was just six days exceeding the four years period from the date of passing the order and
therefore the Tribunal ought to have considered the time taken for service of the impugned order and
allowed the application for rectification, we are not inclined to accept the said contention, for the reason
that, there are no averments in the miscellaneous petition, as to when the order was served on the
appellant."
4. From the above observations, the learned counsel for the assessee submits that while computing the period
of limitation under section 254(2) of the Act, the time taken for obtaining the copy of the order should also be
considered.
5. On the other hand, the learned Departmental representative submitted that the expression "passed",
"initiated" and "served/received" are not interchangeable ; the Legislature, in its wisdom, used the appropriate
phraseology with the clear intention befitting the occasion. For example, in section 275(1)(a) of the Act time
limit was six months from the end of the month in which the order received by the Principal Chief
Commissioner, Chief Commissioner or Commissioner, whichever period expires later. In sub-clause (b)
thereof, the expression used is "after the expiry of six months from the end of the month in which such order
of revision is passed". However, in sub-clause (c) thereof, the expression used is "the period of six months
shall be counted from the end of the month in which the action is initiated". Thus, the Legislature was
conscious of the difference between the "date of receipt of the order" and date of passing the order. In section
254(2) of the Act the Legislature referred to the order "passed" and therefore the assessee should not be given
benefit of the period of limitation reckoned from the "date of receipt of the order". He, thus, strongly
submitted that the miscellaneous application filed by the assessee is beyond the period of limitation.
6. We have carefully considered the real submissions and perused the record. Section 254(2) of the Act refers
to the period of limitation reckoning from the end of the month in which the order is "passed" and not from
the "date of receipt of the order". As rightly pointed out by the learned Departmental representative, the
expressions "passed" "initiated" and served/ received" are not interchangeable and the Legislature in its
wisdom expressly used the phraseology depending on the intention. In the instant case, the expression
"passed" cannot be stretched to mean that the period of limitation should be reckoned from the date of receipt
of the order.
7. Even if a liberal view has to be taken, it can be considered as the date of uploading of the order, ordinarily
anything which is uploaded in the public domain can be accessed by the public at large and even the assessee
would have access to the order and such a date always be treated as the service of the order. In the instant
case, the noting of the senior private secretary in the book indicate that the order was uploaded on June 21,
2016. The judgment of the hon'ble Madras High Court, though referred to the latest provisions, cannot be
taken aid of inasmuch as the hon'ble High Court was dealing with the application filed in 2015, which is a
date anterior to the introduction of six months limitation period. Even otherwise, the observations made
therein cannot be equated to a finding or order since the court was not concerned with the latest provisions of
the Act. Further, the hon'ble High Court mentioned that "even taking for granted that the judgments of the
apex court are applicable to the case on hand the date of service of the order was not even mentioned and the
assessee has not applied due diligence and caution". In other words, the court concluded that the assessee has
not followed due diligence. It was also referred that even the date of order is not placed on record. In such an
event, we are afraid that we have no authority to interpret the expression "passed" as being akin to the "receipt
of the order". Since the miscellaneous application is filed beyond the period of limitation even reckoned from
the date of uploading in website, we have no other alternative except to dismiss the application as being
barred by limitation.
¦¦

*In favour of revenue.