Times Guaranty Ltd. , vs Assessee

M/s. Times Guaranty Limited, ACIT, Times of India Building, Circle 1(3), Vs. Dr. D.N. Road, Aayakar Bhavan, Mumbai - 400 001 Mumbai PAN: AABCT 2481Q (Appellant) (Respondent)

Present for: Assessee by : Shri K. Shivaram, A.R. Revenue by : Shri Asghar Zain V.P., D.R.

Date of Hearing : 10.04.2015 Date of Pronouncement : 15.04.2015

ORDER

Per Sanjay Garg, Judicial Member:

The present miscellaneous application has been moved by the applicant/assessee seeking recall of the impugned order dated 10.10. 2014 contending that the impugned order suffers from certain mistakes which are apparent on record. The mistakes alleged to be crept in the order which the assessee has claimed to be apparent on record have been mentioned in paragraph II- A to E of the application which part, for the sake of convenience, is reproduced as under:

"II. Following are the mistakes apparent on record in the order dt. 10/10/2014.

A. The impugned order is bad in law as it is pronounced after the period of limitation prescribed under Rule 34(5)(c) of the Income Tax (Appellate Tribunal) Rules, 1963.

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B. The Hon'ble ITAT has not considered and not given any finding on the Factual discrepancies in the order of learned A.O. Assessee had filed partywise chart showing factual discrepancies as per the directions of the Hon'ble ITAT. The factual discrepancies pointed out were on the basis of lease deeds and various details filed before the Assessing Officer at the time of assessment proceedings and not on the basis of any additional evidence. The contents of the lease deed are not found false by A.O.

C. Th e Hon'ble IT AT aft er re prod ucin g in pa ra 6 .1 of it s orde r th e contentions of the assessee before the learned CIT(A) regarding factual discrepancies and inaccuracies between the assessment order and the penalty order and the relevant observations from the remand report dated 21.11 .06 submitted by the Assessing Officer to the learned CIT(A) wherein after verification the assessing officer not only confirmed that no details are available in the folder to verify the facts contended by the assessee but further stated that there could be another folder containing the relevant details from which the facts stated by the assessee can be verified, has nowhere in its order dealt with this issue and adjudicated on Ground Nos 4 & 5 of the assessee's grounds of appeal.

D. Reliance on the decision of Mak Data (P) Ltd. vs. CIT (2013) 358 ITR 593 (SC) though the said decision was not relied upon by either side. Also, no opportunity of hearing was given to the assessee with respect to the said case law. The said case law is not applicable to the facts of the present case.

E. The Hon'ble ITAT failed to consider various decisions relied upon by the Assessee."

2. The hearing of the matter in this case was completed on 05.08.2014 and the order was pronounced on 10.10.14, which is a matter of record. The contention raised by the assessee vide para 'A' of the application is that the order was pronounced after the prescribed period of limitation as prescribed under rule 34(5)(c) of the Income Tax (Appellate Tribunal) Rules, 1963. For the sake of clarity, the said rule 34(5) is reproduced as under:

"34.....

(5) The pronouncement may be in any of the following manners :--

(a) The Bench may pronounce the order immediately upon the conclusion of the hearing.

(b) In case where the order is not pronounced immediately on the conclusion of the hearing, the Bench shall give a date for pronouncement.

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(c) In a case where no date of pronouncement is given by the Bench, every endeavour shall be made by the Bench to pronounce the order within 60 days from the date on which the hearing of the case was concluded but, where it is not practicable so to do on the ground of exceptional and extraordinary circumstances of the case, the Bench shall fix a future day for pronouncement of the order, and such date shall not ordinarily be a day beyond a further period of 30 days and due notice of the day so fixed shall be given on the notice board."

3. A perusal of the above reproduced rule 34(5) of the Income Tax (Appellate Tribunal) Rules, 1963 reveals that no limitation period is prescribed for the pronouncement of the order. A careful reading of the above provision reveals that it has been emphasized through this rule that the endeavor shall be made by the bench to pronounce the order within 60 days from the date of hearing. It has been further provided that where it is not practicable to pronounce the order within 60 days on the ground of exceptional and extraordinary circumstances of the case, the bench shall fix a future day for pronouncement of the order and such date shall not ordinarily be a day beyond a further period of 30 days and due notice of the date of fixed shall be given to the parties.

Now, the plea raised by the Ld. Counsel for the assessee is that there were no exceptional or extraordinarily circumstances of the case for which the order could not be pronounced within 60 days from the date of hearing and as such the order was barred by limitation. Such a contention of the Ld. Counsel, in our view, is misconceived. The only inference that can be drawn from the above provision is that the order should be pronounced promptly or as soon as it may be possible. In our view, even if, the order is pronounced beyond the period of 90 days, that can neither be construed to have been vitiated or ceased to have the force of law, nor the same can be termed as beyond the period of limitation. So far the words used 'exceptional and extraordinarily circumstances of the case' are concerned, the inference that can be drawn that the relevant factors such as complexity of the matter, number of issues 4 MA No.21/M/2015 (Arising out of ITA No.1681/M/2007) M/s. Times Guaranty Limited

involved, lengthy arguments and discussions involved or the issue being of such importance that it requires more time and efforts, difference of opinion between the adjudicating members on some issue which require more discussion etc. can be safely said to be 'exceptional and extraordinarily circumstances of the case.' The factors/ circumstances such as one or both the concerned Member being on leave or his/their non availability for some reason for a particular period , his occupation in some other work of equal importance as may be entrusted by the Hon'ble President of the ITAT or due to the reason that the concerned Member/Members could not spare time because of hearing or in making decision in any other factually lengthy or involving complicated issue or of the nature which require a lot of time to get to the conclusion of the matter would also fall within the purview of the above stated phrase. It cannot be assumed that such exceptional and extraordinarily circumstances of the case would mean happening of any event which is never heard or seen or which is rarely seen to happen.

4. We may point out here that as per the sub section (5) of section 255 of the Income Tax Act, the Tribunal has the power to regulate its own procedure for the discharge of its functions. This Tribunal, thus, has devised its own procedure/conventions for the proper discharge of its functions. One of the conventions/procedures so as to ensure quick disposal of the cases is concerned, every month the detail of the cases pending for pronouncement beyond the period of 30 days/ one month is sought through the registry by the Hon'ble President and the reasons for the delay, if any, are also got explained. Even, if the pronouncement of the order, for certain reasons, could not be done within the period of 90 days, there is a convention to seek the permission of the Hon'ble President for pronouncement of the same even after the period of 90 days. The above said conventions are being followed not under any statutory 5 MA No.21/M/2015 (Arising out of ITA No.1681/M/2007) M/s. Times Guaranty Limited

rules or regulations but because of the own devised procedure/convention of the Tribunal for the sake of quick disposal of the cases. We may further point out that it is also the practice/convention that if the pronouncement of the matter is delayed for certain reasons for a considerable period, the matter is refixed for clarification so that the relevant points be refreshed in the memory and if so required matter can be heard afresh. This all depends upon the satisfaction of the Bench itself as to whether it is in a position to pronounce the order or that some clarifications are required or that a fresh hearing is required. Further the word 'ordinarily' as mentioned in clause (c) of rule 34(5) is sufficient to explain that the period of further 30 days beyond the period of 60 days from the date of hearing, is not the end point and in special circumstances, order can be pronounced beyond the such further period of 30 days also. Reliance in this respect can be placed on the another decision of the Tribunal in the case of "Gift Holding (P.) Ltd. vs. Income-tax Officer" [2012] 18 taxmann.com 103 (Mum.), wherein, the Tribunal has made following observations in this respect:

"Thus, as per Sub-rule (5) of Rule 34 of the Income Tax Appellate Rules, 1963, in case where the order is not pronounced immediately on conclusion of the hearing and no date of pronouncement is given then every endeavour shall be made by the Bench to pronounce the order within a period of 60 days from the date on which the hearing of the case was concluded. This Sub-rule further facilitate provides that the pronouncement of the order after the period of 60 days ordinarily be within further period of 30 days provides that due notice of the date fixed for pronouncement shall be given on the notice board. Thus, the term ordinarily used in the Sub-Rule (5) of Rule 34 postulate that the time limit of further 30 days is not final but is flexible depending upon the nature and circumstances. The pronouncement of the order is expected to be within a period of 60 days and in case of exceptional circumstances, it may be pronounced within a further period of 30 days. The decision relied on by the ld. Sr.Counsel for the assessee for the assessee also directs that the order should be pronounced within a period three months from the date on which the case is closed for judgment. It is pertinent to note that in the case in hand, there are certain developments with respect to the long leave and transfer of one of the Member constitution the Bench who have heard the appeal. It is transpired from the record that one of the Members Shri D.K. Shrivastava, AM, seating in the Beach who heard the appeal of the assessee was 6 MA No.21/M/2015 (Arising out of ITA No.1681/M/2007) M/s. Times Guaranty Limited

transferred from Mumbai Benches to Ahmedabad Benches of this Tribunal. Therefore, it appears that due to transfer of one of the Members of the Bench who have heard the appeal, there exists some extra ordinary circumstances which lead to the delay in pronouncement of the order. In the absence of any tangible material, glaring facts and circumstances of the case to show that by the reason of delay in pronouncement of the order, the Bench has ignored or failed to consider material facts or legal point of argument of the assessee. Merely because, there is a delay due to some exceptional circumstances, would not render the decision of the Tribunal as illegal or void. Therefore, in our view when the assessee has not brought on record anything to establish prima facie that any material fact or contention was left without considering by the Tribunal while passing the impugned order. Accordingly, we do not agree with the contentions of the learned counsel for the assessee on this point, the same is rejected."

4.1 Under such circumstances, the contention of the Ld. Counsel that since the order was pronounced beyond the period of 60 days from the date of hearing and hence, the same was barred by limitation has no force and as such is not tenable. We may point out here that the function of 'pronouncement or orders' is not like of a nature such as an 'actionable legal claim' which if not claimed within the period of 60 days or 90 days, can be said to have been barred by limitation.

Further such a contention that the order was pronounced beyond the period of 60 days can not validly be raised in a petition u/s 254 of the Act, as the same can not be said to be an error apparent on record.

5. So far as the other contentions raised by the Ld. Counsel vide para Nos. B, C, D & E are concerned, we find that the Ld. Counsel has raised the points about the factual and legal merits of the case which cannot be termed as an error apparent on record and thus would not fall within the purview of the provisions of section 254(2) of the Income Tax Act. We have gone through the order dated 10.10.2014 of this Tribunal and we find that the contentions raised by the petitioner vide paras B, C & E have been thoroughly examined, dealt with and discussed by the Tribunal in the impugned order. So far the contention raise vide Para 'D', about the reliance on the decision of the 7 MA No.21/M/2015 (Arising out of ITA No.1681/M/2007) M/s. Times Guaranty Limited

Hon'ble Supreme Court in the case of 'MAK Data Pvt. Ltd.' (2013) 358 ITR 593 SC is concerned, the Ld. Counsel could not point out as to how the said decision was not applicable to the case of the assessee or how the application of the said decision has caused any prejudice to the assessee. The decision of the Hon'ble Supreme Court is a widely published decision and is binding on all the subordinate courts and Tribunals of the country and has been rightly relied upon in this case of the assessee. The Tribunal, vide impugned order, has not only considered the submissions of the assessee but has given a categorical finding on all of the issues which were raised before the Tribunal by the ld. counsel for the assessee. Neither any new fact nor any law has been brought by the ld. counsel for the assessee before us, which may be said to have escaped the attention of this Tribunal while deciding the appeal of the assessee on merits vide impugned order. This Tribunal has no jurisdiction to recall or review its order passed on merits while dealing with an application under section 254(2) of the Income Tax Act. If the assessee has any grievance against the impugned order, proper course to agitate the same is by filing an appeal before the next appellate authority but not with the present application under section 254(2) of the Income Tax Act. The Hon'ble Bombay High Court in the case of 'Commissioner Of Income-Tax vs Ramesh Electric And Trading Co.' 1993 203 ITR 497 (Bom.), while relying upon the decision of the Hon'ble Supreme Court in the case of 'T. S. Balaram, ITO v. Volkart Brothers' [1971] 82 ITR 50 and further relying upon the decisions of the various High Courts has categorically held that the power of rectification under section 254(2) of the Income-tax Act 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 by the Tribunal to consider an argument advanced by 8 MA No.21/M/2015 (Arising out of ITA No.1681/M/2007) M/s. Times Guaranty Limited

either party for arriving at a conclusion is not an error apparent on the record, although it may be an error of judgment and under such circumstances the Tribunal has no jurisdiction under section 254(2) to pass the second order.

6. In view of our above observations and the legal position as stated above, we do not find any merit in this application and the same is accordingly hereby dismissed.

Order pronounced in the open court on 15.04.2015.

Sd/- Sd/- (N.K. Billaiya) (Sanjay Garg) ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai, Dated: 15.04.2015. * Kishore, Sr. P.S.

Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The CIT (A) Concerned, Mumbai The DR Concerned Bench //True Copy// [

By Order

Dy/Asstt. Registrar, ITAT, Mumbai.