Amendment Curtailing Limitation Period for filing Rectification Applications to 6 months is applicable to appeal orders passed after 01/06/2016: ITAT

ITAT-delhi-taxscan

The Income Tax Appellate Tribunal, Mumbai bench comprising of judicial member Shri.D.T Garasia and accountant member R.C.Sharma held that the amendment to the provisions of Section 254(2) limiting the period of filing rectification application within a period of six months from four years have prospective effect and therefore, it is not applicable to the appeal orders passed after 1st June 2016.

In the instant case, the Assessee sought for rectification of mistake apparent on the record in the order dated 06/09/2013 passed by the Tribunal.

Assessee argued before the Tribunal that similar miscellaneous application filed by M/s. Reliance Communication Ltd., also have been allowed by the Tribunal. Assessee was also party in the order passed by the Tribunal dated 06/09/2013 along with M/s. Reliance Communication Ltd.

On behalf of the department, it was contended that under section 254(2) of Income Tax Act, the power of ITAT to consider mistake apparent from record was restricted to six months from the end of month in which the order was passed and in the instant case, ITAT lost his powers to consider the miscellaneous application.

Assessee relied on the Apex Court decision in Honda Siel Power Products Ltd. v/s. CIT wherein it was held that if the application has been filed within a period of 4 years, the same is maintainable and the ITAT can even pass the Order beyond the period of 4 years. Further,  ITAT Pune Bench in case of Praj Industries Ltd., also dealt with a similar issue of limitation period.

Hearing both the parties’ contention the bench noticed that in the case of Lavanya Land private limited, the tribunal held that miscellaneous application was filed beyond a period of six months from the date of the order of the Tribunal which was sought to be rectified, the miscellaneous application was barred by limitation.

According to the law applied by SC safely infer that right to appeal which includes right to file rectification application arises at the time of passing the original order and such right can only be taken away when there is a retrospective amendment.

Finally the bench allowed the miscellaneous application and curtailed the limitation period for filing the same for a period of six month.

Read the full text of the Order below.

taxscan-loader