ORDER
Brajesh Kumar Singh, Accountant Member. – By way of these two Miscellaneous Applications, the Revenue under Section 254(2) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) has requested for recalling the common order dated 10.11.2023 of the Tribunal in ITA Nos.264 and 265/Asr/2023 for AY 2014-15 and 2019-20 and to rectify it as per the prayer made in the said Miscellaneous Applications.
2. The Department has filed these Miscellaneous Applications on 04.07.2024 against the order dated 10.11.2023 of the Tribunal in ITA Nos.264 and 265/Asr/2023. Thus, it has been filed beyond the period of six months from the end of the month in which the order of the Tribunal has been passed. As per the provisions of section 254(2) of the Act, the appellate tribunal may at any time within six months from the end of the month in which the order was passed may rectify it if the mistake is brought to its notice by the assessee or the Assessing Officer. Thus, the Miscellaneous Application is filed beyond the prescribed limit. In this regard, the Department in Para no.7 of its Miscellaneous Application has submitted as under:-
“7. That the order of Hon’ble ITAT, Amritsar was received in the office of Pr. CIT (Central), Ludhiana on 18.01.2024 and the limitation period in this case falls on 31.07.2024 as decided by various High Courts which was incorporated by the Hon’ble Income Tax Appellate Tribunal, Chennai in M.A. No. 63/Chny/2020 (arising out of ITA No. 1203/Chny/2019) dated 30.06.2022 in the case of DCIT, Corporate Circle-2, Combatore v. M/s K.P.R. Mills Ltds., Coimbatore. “
2.1. Thus, it is seen that the above order dated 10.11.2023 of the Tribunal in this case was received in the office of the Pr. CIT, Central, Ludhiana on 18.01.2024 and the Department submits that the limitation period in this case falls on 31.07.2024 and thus the filing of the Miscellaneous Application on 04.07.2024 is within time.
2.2. We have considered the above submissions of the Revenue. The Hon’ble Delhi High Court in the case of Golden Times Services Pvt. Ltd. v. Dy. CIT 123/422 ITR 102 (Delhi), has held in para-15 that the starting point of limitation provided u/s 254(2) of the Act has to commence from the date of actual receipt of the judgment and order passed by the ITAT which is sought to be reviewed. The relevant extract of the order in para 14 and 15 of the said order is reproduced as under:-
14. The Supreme Court, in the case of D. Saibaba v. Bar Council of India, (2003) 6 SCC 186, had an occasion to consider a similar question in the context of Advocates Act, 1961 for exercising the remedy to review/reference/appeal. In the said case, the expression used in the provision was “sixty days from the date of that order”. The Court noticed several other decisions, rendered under different acts and came to the conclusion that the expression “the date of that order” must be construed as meaning the date of the communication or knowledge, actual or constructive of the order sought to be reviewed. The relevant portion of the said judgment has been extracted hereinunder:
“9. So far as the commencement of the period of limitation for filing the review petition is concerned we are clearly of the opinion that the expression “the date of that order” as occurring in Section 48-AA has to be construed as meaning the date of communication or knowledge of the order to the review petitioner. Where the law provides a remedy to a person, the provision has to be so construed in case of ambiguity as to make the availing of the remedy practical and the exercise of power conferred on the authority meaningful and effective. A construction which would render the provision nugatory ought to be avoided. True, the process of interpretation cannot be utilized for implanting a heart into a dead provision; however, the power to construe a provision of law can always be so exercised as to give throb to a sinking heart.
10. An identical point came up for the consideration of this Court in Raja Harish Chandra Raj Singh v. Dy. Land Acquisition Officer [AIR 1961 SC 1500 : (1962) 1 SCR 676]. Section 18 of the Land Acquisition Act, 1894 contemplates an application seeking reference to the court being filed within six months from the date of the Collector’s award. It was held that “the date of the award” cannot be determined solely by reference to the time when the award is signed by the Collector or delivered by him in his office. It must involve the consideration of the question as to when it was known to the party concerned either actually or constructively. If that be the true position, then placing a literal and mechanical construction on the words “the date of the award” occurring in the relevant section would not be appropriate. It is fair and just that a decision is communicated to the party whose rights will ultimately be affected or who will be affected by the decision. The knowledge, either actual or constructive, of the party affected by such a decision, is an essential element which must be satisfied before the decision can be brought into force. Thus construed, the making of the award cannot consist merely of the physical act of writing an award or signing it or even filing it in the office of the Collector; it must involve the communication of the said award to the party concerned either actually or constructively. A literal or mechanical way of construing the words “from the date of the Collector’s award” was held to be unreasonable. The Court assigned a practical meaning to the expression by holding it as meaning the date when the award is either communicated to the party or is known by him either actually or constructively.
11. The view taken in Raja Harish Chandra Raj Singh case [AIR 1961 SC 1500 : (1962) 1 SCR 676] by a two-Judge Bench of this Court was affirmed by a three-Judge Bench of this Court in State of Punjab v. Qaisar Jehan Begum [AIR 1963 SC 1604 : (1964) 1 SCR 971]. This Court added that the knowledge of the award does not mean a mere knowledge of the fact that an award has been made; the knowledge must relate to the essential contents of the award.
12. In Asstt. Transport Commr. v. Nand Singh [(1979) 4 SCC 19] the question of limitation for filing an appeal under Section 15 of the U.P. Motor Vehicles Taxation Act, 1935 came up for the consideration of this Court. It provides for an appeal being preferred “within thirty days from the date of such order”. The taxation officer passed an order on 20-10-1964/24-10-1964 which was received by the person aggrieved on 29-10-1964. calculating the period of limitation was 29-10-1964 and not 24-10-1964.
13. In Raj Kumar Dey v. Tarapada Dey [(1987) 4 SCC 398] this Court pressed into service two legal maxims guiding and assisting the court while resolving an issue as to calculation of the period of limitation prescribed, namely, (i) the law does not compel a man to do that which he could not possibly perform, and (ii) an act of the court shall prejudice no man. These principles support the view taken by us hereinabove. Any view to the contrary would lead to an absurdity and anomaly. An order may be passed without the knowledge of anyone except its author, maybe kept in the file and consigned to the record room or the file may lie unattended, unwittingly or by carelessness. In either case, the remedy against the order would be lost by limitation though the person aggrieved or affected does not even know what order has been passed. Such an interpretation cannot be countenanced.
14. How can a person concerned or a person aggrieved be expected to exercise the right of review conferred by the provision unless the order is communicated to or is known to him either actually or constructively? The words “the date of that order”, therefore, mean and must be construed as meaning the date of communication or knowledge, actual or constructive, of the order sought to be reviewed.”
(emphasis supplied)
15. The assessee had challenged the ex parte order dated 18.10.2016 and consequently, keeping in view, the aforesaid decisions, we are of the considered opinion that the starting point of limitation provided under Section 254 (2) of the Act has to commence from the date of the actual receipt of the judgment and order passed by the ITAT which is sought to be the reviewed
2.3. In view of the above cited order, we are of the considered view that the Miscellaneous Applications filed by the Department on 04.07.2024 in respect of the order dated 10.11.2023 of the Tribunal in this case received in the office of the Pr. CIT on 18.01.2024 is within prescribed time limit as provided under the provisions of section 254(2) of the Act. We, therefore, admit both the Miscellaneous Applications filed by the Revenue for adjudication.
3. In this regard, the list of dates relating to this case are as under:-
| Sr. No. | Dates | Particulars |
| 1 | 27.02.2019 | A search and seizure operation was conducted at the premises of the assessee |
| 2 | 21.04.2021 | The order u/s 153C r.w.s. 153A/143(3) of the Act was passed in the case of the assessee in which the addition of Rs. 1,18,82,100/- on account of payment made by Shri Abdul Majeed Sheikh to M/s Bach Infrastructure on behalf of the assessee for construction of hotel building at the construction site of the assessee was made, wherein according to the Assessing Officer, the entire amount was paid in cash and not accounted for in the books of accounts |
| 3 | 11.05.2022 | The Ld. CIT(A) allowed part relief to the assessee by restricting the aforementioned addition to Rs.21,73,975/- |
| 4 | 10.11.2023 | Aggrieved with the said order, the Ld. CIT(A), the assessee filed an appeal before the Tribunal and the Tribunal deleted the said addition |
| 5 | 29.12.2020 | To estimate the cost of construction, the Assessing Officer issued commission to the DVO |
| 6 | 12.08.2021 | The DVO submitted his valuation report. |
4. According to the Revenue, the ITAT upheld the appeal of the assessee and deleted addition of Rs. 1,18,82,100/- on technical ground stating that the DVO submitted the valuation report on 12.08.2021 to the then AO which was beyond the time limitation period of 6 months i.e. 30.06.2021 from the date of reference on 29.12.2020 as provided by the Act, wherein, the IT AT held that as such the said report cannot be made the basis for addition in the eyes of the law.
4.1. In this Miscellaneous Application, the Revenue submits that above finding of the Tribunal was not correct in view of the decision of the Hon’ble Supreme Court in MA No.21 of 2022 due to the outbreak of Covid-19 pandemic directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purpose of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi judicial proceedings. It was submitted that in the present case the AO had written a letter to DVO for valuation of said property on 29.12.2020 and report of DVO in this regard was received to this office on 12.08.2021 which falls within the limitation period from 15.03.2020 to till 28.02.2022. Hence, in view of decision of Hon’ble Supreme Court it was submitted that the period of limitation was extended upto 28.02.2022 in the present case also. It was submitted by the Id. Sr. DR that the ITAT had failed to take into consideration the above mentioned decision of the Hon’ble Supreme Court and therefore, the conclusion drawn by Hon’ble ITAT that the valuation report submitted by the DVO was barred by time on 30.06.2021 is not correct as decision of the Hon’ble Supreme court in M.A No.21 of 2022 has excluded the period from 15.03.2020 till 28.02.2022 for computing the limitation due to the outbreak of the COVID-19 Pandemic. Hence, the conclusion drawn by the Tribunal is factually incorrect and thus constitutes mistake apparent from record. In this regard, the Id. Sr. DR supported the facts stated in the Miscellaneous Application.
5. The Ld. AR for the assessee submitted that the Tribunal apart from the holding that the proceedings as time barred had also held that even otherwise, in the present Miscellaneous Application, the Department has failed to consider that the Tribunal has given specific findings on Ground no 3, 4 and 6, that the overall variation in valuation is within the permissible limit of 25%, the inappropriate application of CPWD rates instead of State PWD rates, and the binding reliance placed on the judgment in the case of Commissioner of Income-tax, Ajmer v. Sunita Mansingha 258/295 CTR 590/393 ITR 121/ 93 (SC). The Id. AR drew our attention to Paragraph Nos. 11 and 12 of the order passed by the Tribunal dated 10th November 2023, as appearing on internal pages 18 and 19, which are crucial for adjudication of the present matter. It was further submitted that, the department has failed to appreciate that the Ld. Departmental Representative (DR) had also filed written submissions wherein it was admitted that the overall difference in valuation for Assessment Years 2014-15 and 2019-20 is approximately 10% and the said submission of the DR is placed at internal page no. 17 of the order passed by the Tribunal. It was further submitted that it is a settled law that rectification under section 254(2) is permissible only in cases where there exists a patent, self-evident mistake apparent from the record, which does not require any reappreciation of evidence, arguments, or interpretation of law. It was submitted that in the present case, the Revenue seeks to reopen the entire adjudication by advancing an alternate interpretation of law, which is beyond the scope of section 254(2) and it was respectfully submitted that the Tribunal, after due consideration of all facts and legal submissions, rendered a detailed and reasoned order, and the same cannot be reopened under the guise of rectification.
6. We have heard both the parties and perused the material available on record. The Tribunal in the order dated 10.11.2023 while deleting the said addition in para 10-12 has held as under:-
“10. We have heard the rival contentions, perused the material on record, written submissions, and the impugned order. Admittedly, the sole basis of the addition is only the valuation report furnished by the DVO which has been obtained by the Id. AO during the course of search assessment proceedings. As per the provisions of section 142A (6) of the Act, it apparently clear that the valuation report has to be furnished by the Id. DVO within six months from the end of the month in which reference is made by the Id. AO. This issue is now well settled by the Hon’ble Apex Court decision in case ofSargam Cinema v. [2009 (10) TMI569 – SC ORDER] and in the case of CIT v. Nirmal Kumar Aggarwal [2018 (10) TMI 2002 – SC ORDER], Admittedly, in the present case, the valuation report is dated 28.10.2016 which is beyond the prescribed time of 30.09.2016. Hence, it is evident that the said valuation report of Id. DVO is barred by limitation and, hence, cannot be relied upon by either party in the eyes of law. Consequentially, in our view, no addition per se can be made by the Revenue by placing reliance on an invalid valuation report.
11. The Ld. Counsel has taken alternative plea that the valuation report considered by the CTT(A) cannot be relied upon as the DVO report which has been made on the basis of CPWD rated instead of PWD rates (APB, Pg. 43 para 8.3). The Ld. Counsel in this regard, placed reliance upon the binding judgment of Hon’ble Supreme Court in the case of Sunita Mansingha as reported in 93 (SC), wherein, it has been held that for the purpose ofvaluating the property, the local rate should be applied and not CPWD rates and normally, there is difference of about 25% with respect to rate of CPWD and PWD rates. Thus, the addition has been made without providing the benefit of rate difference between CPWD and PWD rate.
12. Considering the factual matrix of the case and judicial pronouncements, we hold that the order passed by the Ld. CIT(A) is infirm and perverse to the facts on record in confirming the addition based on invalid report of DVO and further without allowing benefit of the difference in the value as per law. Accordingly, the addition of Rs. 21,73,975/- sustained by the Ld. CIT (A) is bad in Law and as such, same is deleted. “
7. Thus, it is seen that the Tribunal in deleting the above addition in addition to the fact that the addition was based on invalid report of the DVO (on account of limitation as discussed in para no. 10 of the order of the Tribunal as referred above) had also deleted the addition for not allowing the benefit of the difference in the value adopted as per CPWD rates instead of PWD rates as discussed in para 11 of the Tribunal as referred above.
8. The scope of section 254(2) of the Act has been examined by Hon’ble Bombay High Court, vide order dated 06.11.1992 passed in Commissioner of Income Tax (T-4) V M/s. Reliance Telecom Limited, reported in [1993] 203 ITR, wherein Hon’ble High Court has held as under:
“Under section 254(2) of the Income-tax Act, 1961, the Appellate Tribunal may, “with a view to rectifying any mistake apparent from the record”, amend any order passed by it under sub-section (1) within the time prescribed therein. It is an accepted position that the Appellate Tribunal does not have any power to review its own orders under the pro visions of the Act. The only power which the Tribunal possesses is to rectify any mistake in its own order which is apparent from the record. This is merely a power of amending its order. The power of rectification under section 254(2) can be exercised only when the mistake which is sought to be rectified is an obvious and patent mistake which is apparent from the record, and not a mistake which requires to be established by arguments and a long drawn process of reasoning on points on which there may conceivably be two opinions. Failure of the Tribunal to consider an argument advanced by either party for arriving at a conclusion is not an error apparent on the record, although it may be an error of judgment. The Tribunal cannot, in the exercise of its power of rectification, look into some other circumstances which would support or not support its conclusion”
9. The Hon’ble Supreme court, vide order dated 03.12.2021 passed in Commissioner of Income-tax (IT-4), Mumbai v. Reliance Telecom Ltd. 517 (SC)/Civil Appeal No. 7110 of 2021, vide para 3.2 and 6 has held as under:
“3.2 Having gone through both the orders passed by the ITAT, we are of the opinion that the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013 is beyond the scope and ambit of the powers under Section 254(2) of the Act. While allowing the application under Section 254(2) of the Act and recalling its earlier order dated 06.09.2013, it appears that the ITAT has re-heard the entire appeal on merits as if the ITAT was deciding the appeal against the order passed by the C.I.T. In exercise of powers under Section 254(2) of the Act, the Appellate Tribunal may amend any order passed by it under sub-section (1) of Section 254 of the Act with a view to rectifying any mistake apparent from the record only. Therefore, the powers under Section 254(2) of the Act are akin to Order XLVII Rule 1 CPC. While considering the application under Section 254(2) of the Act, the Appellate Tribunal is not required to re-visit its earlier order and to go into detail on merits. The powers under Section 254(2) of the Act are only to rectify/correct any mistake apparent from the record.
6. None of the aforesaid grounds are tenable in law. Merely because the Revenue might have in detail gone into the merits of the case before the ITAT and merely because the parties might have filed detailed submissions, it does not confer jurisdiction upon the ITAT to pass the order de hors Section 254(2) of the Act. As observed hereinabove, the powers under Section 254(2) of the Act are only to correct and/or rectify the mistake apparent from the record and not beyond that.
Even the observations that the merits might have been decided erroneously and the ITAT had jurisdiction and within its powers it may. pass an order recalling its earlier order which is an erroneous order, cannot be accepted. As observed hereinabove, if the order passed by the /TAT Was erroneous on merits, in that case, the remedy available to the Assessee was to prefer an appeal before the High Court, which in fact was filed by the Assessee before the High Court, but later on the Assessee withdrew the same in the instant case.
10. Thus, in this case, the Revenue has failed to take notice of the fact that the Tribunal in its order had allowed the appeal of the assessee not only on the ground of limitation in the submission of the DVO report but also on the ground of its finding that the Id. CIT(A) had erred in not allowing the benefit of rate difference of CPWD rates and PWD rates in arriving at the valuation of the investment in the said property. Thus, the Miscellaneous Application of the Revenue is not maintainable in the given facts of the case.
11. Therefore, in view of aforesaid legal and factual position, the miscellaneous application filed by the Revenue is, thus, not maintainable and is dismissed accordingly.
12. The facts and issue in MA No. 84/Asr/2024 are exactly identical to facts and issue in MA No. 83/Asr/2024. Therefore, our finding given in MA No. 83/Asr/2024 shall be applicable to the case in MA No. 84/Asr/2024 in mutatis mutandis and accordingly the MA No.84/Asr/2024 filed by the Revenue is dismissed.
13. In the result, both the Miscellaneous Applications of the Revenue are dismissed.