Principal Commissioner Of Income Tax 2 v. M/S. Maharaja Sathyam Industries (P) Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 01.07.2019 Principal Commissioner of Income Tax 2,No.63, Race Course Road,Coimbatore. .. Appellant/Respondent Vs. M/s. Maharaja Sathyam Industries (P) Ltd.,119, Bhavani Road,Erode – 638 004. .. Respondent/Appellant Prayer : Tax Case Appeal filed under Section 260A of the IncomeTax Act, 1961, against the order of the Income Tax AppellateTribunal Madras 'A' Bench, Chennai, dated 10.03.2017 inI.T.A.No.326/Mds/2016 for the assessment year 2012-2013 againstthe order passed by the Income Tax Appellate Tribunal 'A' Bench,Chennai dt.02/11/2016 made in ITA.No.1334/2016 for theAssessment Year 2012-13 and against the order passed by theCommissioner of Income Tax(Appeals)-3, Coimbatore dt.29/02/2016made in ITA No. 601/2014-15 for the Assessment year 2012-13 andagainst the order passed by the Income Tax Department, Erode dt:20/03/2015 made in AACCS9484P for the Assessment year 2012-13. This appeal filed by the assessee under Section 260 A ofthe Income Tax Act, 1961 (hereinafter referred to as the Act) isdirected against the order dated 10.03.2017 passed by the IncomeTax Appellate Tribunal Madras 'A' Bench in I.T.A.No.326/Mds/2016for the Assessment Year 2012-2013. https://hcservices.ecourts.gov.in/hcservices/ 2. The revenue has filed this appeal raising thefollowing substantial questions of law: “ (i) Whether the Tribunal is correct inlaw in holding that the order dated 02.11.2016is an exparte order after considering the caseon merits? (ii) Whether the Tribunal is correct inreviewing its earlier order dated 02.11.2016 byrecalling the same under Section 254 of the Act? (iii) Whether the Tribunal is correct inlaw in holding that the order dated 02.11.2016is an exparte order even after recording theassessee's submissions and allowing the revenuesappeal on merits?” 3. This appeal filed by the revenue is directed againstthe order passed by the tribunal in a miscellaneous petitionfiled by the assessee to recall the earlier order passed by thetribunal dated 02.11.2016 in the appeal filed by the revenue. 4. The tribunal by the said order set aside the order ofCommissionerofIncome-Tax(Appeals)-3(Coimbatore)inITA.No.601/2014-15 dated 29.02.2016 and remanded the entiredisputed issue to the file of the Assessing Officer for freshadjudication. The assessee approached the Tribunal complainingthat they were not heard in the matter and it appears that theygave some reasons as to why they did not appear before theTribunal. The tribunal by impugned order dated 10.03.2017 foundthat the decision taken by it earlier on 02.11.2016 was withoutaffording an opportunity to the assessee and recall the ex-parteorder dated 02.11.2016 stating that it should be done in theinterest of justice. 5. Mr.T.R.Senthil Kumar, learned Senior Standing Counselfor the revenue submitted that the Tribunal failed to give properreasons for recalling the earlier order dated 02.11.2016, moreparticularly, when the Tribunal had decided the matter on meritsand recorded its findings in paragraph 7 of the order dated02.11.2016. It is further submitted by learned counsel forappellant-revenue that the Tribunal had no jurisdiction to recallits earlier order especially when it did not have power to reviewits own order, even if the power under Section 254 of the Act wasinvoked. 6. It is further submitted by the learned counsel for theRevenue that in the light of the decision in the case of AbhishekIndustries reported in 286 ITR 1 (Punjab & Harayana), theTribunal become functus officio and has no power to recall itsearlier order. In support of such contentions, reliance was alsoplaced in the case of CIT Vs. Earnest Exports Ltd., reported in https://hcservices.ecourts.gov.in/hcservices/ 6. It is further submitted by the learned counsel for theRevenue that in the light of the decision in the case of AbhishekIndustries reported in 286 ITR 1 (Punjab & Harayana), theTribunal become functus officio and has no power to recall itsearlier order. In support of such contentions, reliance was alsoplaced in the case of CIT Vs. Earnest Exports Ltd., reported in https://hcservices.ecourts.gov.in/hcservices/ 323 ITR 577 (Bombay) and CIT Vs. MC. Dowell &Co reported in 310ITR 215 (Karnataka). It may not be necessary for us to render adecision on the grounds raised by the revenue on account ofsubsequent developments. After tribunal passed the impugnedorder, the matter was recalled by the tribunal and fresh ordershave been passed by the CIT(A) on 27.07.2017 allowing therevenue's appeal and remanding the matter for fresh considerationto the Assessing Officer. 7. In the light of the above, there is no necessity foranswering the substantial question of law raised by the revenuein this appeal as the exercise has become academic. 8. For the above reasons, the appeal filed by the revenueis dismissed and the substantial questions of law raised by therevenue are left open. No costs. Sd/- Assistant Registrar(CS V) mp/ska //True Copy// Sub Assistant Registrar To: 1.The Principal Commissioner of Income Tax-2, No.63, Race Course Road, Coimbatore. 2.The Income Tax Appellate Tribunal Madras 'A' Bench, Chennai. 3.The Assistant Commissioner of Income Tax, Circle 1, No.15, Gandhi Road, Erode. 4.The Commissioner of Income Tax(Appeal)-3, Coimbatore. TCA.No.539 of 2018 KK(CO) RRS(23/07/2019)