1989 (9) TMI 156 – ITAT DELHI-A – [1989] 31 ITD 287 – Application For Rectification, Assessment Year, Retrospective Effect – Misc. Application No. 39 (Delhi) of 1989, Misc. Application No. 20 (Delhi) of 1981, IT Appeal No. 361(Chd.) of 1978-79, IT Appeal No. 362 of 1978-79, IT Appeal No. 363 (Chd.) of 1978-79, IT Appeal No. 364 (Chd.) of 1978-79 Dated:- 4-9-1989 – Member(s) : CH. G. KRISHNAMURTHY., F. C. RUSTAGI. ORDER Per Krishnamurthy, President-This is a misc. application filed by the assessee on 14-10-1988 bringing to the notice of the Tribunal that the allowance of an earlier misc. application filed by the I.T.O. Co. Cir., Rohtak on 28-1-1981, in his favour was out of time and was barred by limitation, was therefore wrong and should be cancelled. 2. The assessee claimed, inter alia, relief u/s 80J of the Income-tax Act, stating that in computing the capital employed for the purpose of the business, the borrowed capital also should be included as capital. The Tribunal by its ord
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t did exist in the order of the Tribunal and, therefore, it should be rectified. The operative portion of the order of the Tribunal was relevant and, we therefore, reproduce it below :- At the time of hearing of this application, the learned counsel for the assessee Sh. C.S. Agarwal did not oppose this petition and concede the point because as on today the decision of the Supreme Court on Sec. 80J and the effect of retrospective amendment were all decided against the assessee. The order of the Tribunal, therefore, stands modified to this extent, namely, that the relief u/s 80J will now have to be worked out excluding the loans taken by the assessee. The ITO will work out the capital accordingly. This order shall be treated as part and parcel of the order passed by the Tribunal in I.T.A. Nos. 361 to 364 of 1978-79 dated 27-8-1980. 3. In this present misc. application, filed by the assessee, it is now pointed out that u/s. 254(2) of the Income-tax Act, the Income-tax Appellate Tribunal i
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f time. The earlier misc. application was filed by the Department on 25-1-1981 though it was disposed of on 6-4-1985. The order of the Tribunal was dated 27th August, 1980. Reckoning the period of limitation of four years from the date of the order of the Tribunal namely 27th August, 1980, the order passed by the Tribunal on 6-4-1985 was clearly out of time, though the application for rectification was filed by the department on 27-1-1981 which was well within time. When an application was filed well within time, the time taken by the authority to rectify the mistake will not render the petition as time barred, even if the order was passed after the period of four years, because the crucial date is not the date of passing the order by the authority empowered to rectify the mistake but the date of filing of the petition, as otherwise the delay taken by the authority to rectify the mistake either voluntarily or involuntarily, may frustrate the very right given to an assessee to get his o
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e Old Act (to make the rectification) and if he had failed to do so, the High Court had power to issue a writ directing the ITO to make a rectification even though the period of four years fixed u/s 35 had expired. By relying upon this principle, the learned Advocate for the assessee very seriously contended that the time limit fixed to make a rectification could thus be lifted by the authority concerned if the application had been filed in time and since his application was filed in time, the Tribunal could pass an order now on his application holding that its earlier order of 6-4-1985 was barred by limitation even though the application for rectification for that order was filed by the Department. The period of four years from the date of the order of the Tribunal. We fail to see how the decision of the Allahabad High Court helped the assessee in any manner nor how the law could be one for the assessee and another for the Department because the power given to the Tribunal to rectify
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t the Department did not act on those applications. It filed a writ in the High Court in 1967 for a writ to compel the I.T.O. to rectify the assessment. It was pleaded on behalf of the Revenue that as the period of four years prescribed for rectification by Sec. 35(1) had expired in 1960, no writ to enforce rectification could be issued. It was in that context that the High Court observed that it was the duty of the I.T.O. u/s 35 to make the rectification and as he had failed to do so, the High Court had power to issue a writ and directing the I.T.O. to make a rectification even though the period of four years fixed u/s 35 had expired. The High Court in this case, after reviewing the relevant Law on the subject, including the Halsbury s Laws of England came to the conclusion that the period prescribed u/s 35 could only be said to be the period within which proceedings and other section should be commenced and not that the power given on that section should be exercised within the perio
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uage of sec. 254(2) and sec. 35 being on pari materia the law as made applicable to sec. 35 would also apply to Sec. 255(4) and, therefore, if an application has been made at any time within four years from the date of the order, with a view to rectify any mistake apparent from the record, the Tribunal may amend any order passed by it and in doing so, all that it has to see is whether the application was made in time. The limit of time provided in sec. 254(2) applies only to the commencement of the proceedings namely, filing of the application, bringing the mistake to the notice of the Tribunal and not to the orders to be passed by the Tribunal. Once the mistake has been brought to the notice of the Tribunal in time, that mistake can be rectified at any time even after the lapse of the period of four years otherwise it will lead to miscarriage of justice which is not the object of the Legislature, even though the Tribunal has to be careful enough to pass the orders as quickly as possib
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ssed by the I.T.O. and the C.I.T. could have cancelled the order only if the earlier order had been passed by a Commissioner u/s 263 or sec. 264 and not otherwise. There were some other issues involved in this case which were decided by the High Court against the revenue but we are not concerned with any one of them in this matter. This decision, does not turn upon an issue even closer to the issue before us. 6. The learned counsel for the assessee also placed reliance upon a decision of the Supreme Court in the case of Kapurchand Shrimal v. CIT [1981] 131 ITR 451. The Supreme Court laid down in this case the ruling that it is well known that an appellate authority has the jurisdiction as well as the duty to correct all errors in the proceedings under appeal and to issue, if necessary, appropriate directions to the authority against whose decision the appeal is preferred to dispose of the whole or any part of the matter afresh, unless forbidden from doing so by the statute. We fail to
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of the statutory time limit on merits and in accordance with law. This circular helps the cause of both the assessee as well as that of the Department. It applies with equal force to both the parties before us. We cannot say that the force of the Circular is applicable only to the applications filed on behalf of the assessee but not to the applications filed on behalf of the department. Before the law every one is equal, it cannot be slanted in favour of the assessee at the cost of the revenue or vice versa. The Law of Limitation vests a right in a party and if the limitation expires, a vested right accrues to the other party and that right cannot be easily tampered with by mere technicalities. Therefore, none of the decision relied upon by the learned counsel for the assessee advance the cause of the assessee. To the petition filed by the assessee in time now but sought to be disposed of after the expiry of the four years, is in time we fail to see how on the same logic and reasoning
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