S.p.balasubrahmanyam v. Assistant Commissioner Of Income Taxmedia Circle Ino.112, Uttamar Gandhi Salaichennai - 600 034

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated: 02-09-2016 C O R A M The Honourable Mr.Justice S.ManikumarandThe Honourable Mr.Justice D.Krishnakumar Tax Case Appeal No.630 of 2016 S.P.Balasubrahmanyam... Appellant Vs Assistant Commissioner of Income TaxMedia Circle INo.112, Uttamar Gandhi SalaiChennai - 600 034 ...Respondent Prayer:Tax Case Appeal filed under Section 260A of the IncomeTax Act, 1961 against the orders of the Income Tax AppellateTribunal, Madras 'C' Bench dated 11-12-2015 made in MANo.96/Mds/2015 in ITA No.638/Mds/2011 against the order of thecommissioner of Income Tax (Appeals) VI Chennai 600 034 in 1.5A.No.185/09-10 dated 04.01.2015 against the order of the incometax officer (OSA) notice circle I, Chennai made inPA.No.GP.No.APDBG195J dated 29.12.2009. For appellant : Mr.J.BalachanderFor respondents : Mr.M.Swaminathan Sr. Standing Counsel JUDGMENT(made by S.Manikumar,J) Tax Case Appeal is directed against the order made in MANo.96/Mds/2015 in ITA No.638/Mds/2011 dated 11.12.2015, bywhich, the Tribunal, dismissed the petition filed to recall theorder made in ITA No.638/Mds/2011 dated 18.07.2011, as timebarred. https://hcservices.ecourts.gov.in/hcservices/ 2. Facts leading to the appeal are that being aggrieved bythe order of the Commissioner of Income Tax (Appeals) dated04.01.2011 made in ITA No.185/09-10, Assistant Commissioner ofIncome Tax, Media Circle I, Chennai, the assessee has filed anappeal before the Income Tax Appellate Tribunal, 'C' Bench,Chennai. When the matter was called, there was no appearance onbehalf of the appellant/assessee. Joint Commissioner of IncomeTax appeared for the Revenue and argued the case. 3. After hearing the arguments and considering the materialson record, the Tribunal, vide order dated 18.07.2011 made in ITANo.638/Mds/2011 for the Assessment Year 2007-2008, disagreedwith the finding of the Commissioner of Income Tax (Appeals),that the cost of acquisition in the hands of the assessee mustbe taken at Rs.49,82,300/-. The Tribunal further held that thecost of acquisition must be taken at Rs.24,00,000/- as adoptedby the Assessing Officer and ordered hereunder: "7.......But, as the assessee has thereafterpaid additional stamp duty and incurred othercharges on the ground of underpayment of stampduty, those amounts subsequently paid by theassessee should also be added to the amount ofRs.24.00 Lakhs to arrive at the cost ofacquisition. To this extent the assessee isentitled for the relief. Therefore we direct theassessing authority to refix the acquisition costby adding the amount of Rs.24 lakhs and the amountof additional stamp duty and expenses incurred bythe assessee. But for this modification, thecomputation made by the assessing authority isupheld.8. In the facts and circumstances of the casethe order of the Commissioner of Income Tax(Appeals) on this point is vacated and the orderof the Assessing Officer is restored, subject tothe marginal relief ordered by us.10. In result this appeal filed by theRevenue is allowed." 4. Aggrieved by the order made in ITA No.638/Mds/2011 dated18.7.2011, assessee/appellant is stated to have filed anindependent tax appeal with delay. While matter stood thus,assessee/appellant has filed MA No.96/Mds/2015, to recall theex-parte order contending that the same has resulted inprejudice to the assessee. 5. Averments made in MA No.96/Mds/2015 filed to recall andto set aside the ex-parte order, with a prayer to restore thesame on file, are that: https://hcservices.ecourts.gov.in/hcservices/ 4. Aggrieved by the order made in ITA No.638/Mds/2011 dated18.7.2011, assessee/appellant is stated to have filed anindependent tax appeal with delay. While matter stood thus,assessee/appellant has filed MA No.96/Mds/2015, to recall theex-parte order contending that the same has resulted inprejudice to the assessee. 5. Averments made in MA No.96/Mds/2015 filed to recall andto set aside the ex-parte order, with a prayer to restore thesame on file, are that: https://hcservices.ecourts.gov.in/hcservices/ "It is submitted that the petitioner/respondentcame to know about the service of the notice forposting the hearing and as well as the final exparteorder passed in the said appeal only very recently.The notice was served in the address where theoffice of the petitioner/respondent is situated.That particular notice and the final exparte orderwas received by the security agency staff of thepetitioner/respondent/ assessee. But unfortunatelythe said security of the petiitoner failed to handover the said Tribunal order either to thepetitioner/respondent/assessee or to his personalsecretary. The petitioner was never aware about theservice of the notice and the final order. Thepetitioner's personal secretary was also not welland was hospitalised for cardiac problem.It is submitted that the non representation isneither wilful nor wanton, but due to reasons setforth above. The petitioner/respondent respectfully submitsthat there is no wilful or wanton non appearancebefore the Hon'ble ITAT. The petitioner submits thatthere exists sufficient cause for recalling theorder in terms of ITAT Rules. The courts have heldsimilar views on civil law also." 6. Adverting to the same, the Tribunal vide order in MANo.96/Mds/2015 in ITA No.638/Mds/2011 dated 11.12.2015, for theAssessment Year 2007-2008, passed orders, dismissing thepetition, as hereunder: "3. The ld. AR submitted that the order of theTribunal was passed on 18.7.2011 and date of receiptof the order is to be considered. If we consider thedate of order, the assessee has to file the M.A.within four years from the date of order of theTribunal. In our opinion, the contention of the ld.AR is misconceived as per the decision of theSpecial Bench of the Tribunal in the case ofArvindbhai H. Shah v. ACIT (91 ITD 101)(Ahd.). Thetime limit of four years to make rectificationu/s.254(2) applies both to suo motu action of theTribunal as well as to action taken by the partieson request. Being so, the MA is not maintainable,which is filed beyond time limit. Accordingly, thisMA is dismissed." 7. Assailing the correctness of the order made in MANo.96/Mds/2015 in ITA No.638/Mds/2011, instant tax appeal isfiled, on the following substantial question of law:"Whether on the facts and circumstances of the case the Hon'ble Income Tax Appellate Tribunal wasright in law in rejecting the MiscellaneousPetition/Application filed under Order 25 of theIncome Tax Tribunal Rules, 1963 read with underSection 254(2) of the Income Tax Act, 1961 forrecall of the exparte order passed in ITANo.638/mds/2011 dated 18th July 2011 as barred bylimitation taking into consideration the time takenfor actual service of the Exparte order." 8. Inviting the attention of this court to Section 254 ofthe Income Tax Act, 1961, r/w Rule 25 of the Income TaxAppellate Tribunal Rules, 1963, Mr.J.Balachander, learnedcounsel for the appellant, submitted that whenever an ex-parteorder is passed by the Tribunal, application to set aside thesame, and to restore the appeal on file is filed, only under theabove provisions, at any time within four years from the date ofthe order, with a view to rectify any mistake, apparent on theface of record, amend any order passed by it under sub section(1) of Section 254 of the Act, and that the Tribunal shall makesuch amendment when the mistake is brought to its notice by theassessee or the Assessing officer. 8. Inviting the attention of this court to Section 254 ofthe Income Tax Act, 1961, r/w Rule 25 of the Income TaxAppellate Tribunal Rules, 1963, Mr.J.Balachander, learnedcounsel for the appellant, submitted that whenever an ex-parteorder is passed by the Tribunal, application to set aside thesame, and to restore the appeal on file is filed, only under theabove provisions, at any time within four years from the date ofthe order, with a view to rectify any mistake, apparent on theface of record, amend any order passed by it under sub section(1) of Section 254 of the Act, and that the Tribunal shall makesuch amendment when the mistake is brought to its notice by theassessee or the Assessing officer. 9. Placing reliance on the decision of the Hon'ble ApexCourt in Madan lal vs State of UP and others reported in 1975(2) SCC 779 and in the case of India House vs Kishan Lal vanireported in 2003 (9) SCC 393, Mr.J.Balachander, learned counselfor the appellant contended that the Tribunal, has erred in notproperly considering the principles of law laid down in theaforesaid judgments with regard to the time taken for service ofthe order on the assessee. According to him, the Tribunal haserred in not excluding the time taken for the actual service ofthe order passed in the appeal in ITA No.638/mds/2011 dated18.7.2011, and computed the period of limitation of four yearsfrom the date of passing of the ex-parte order i.e. 18.7.2011.For the above said reasons, he prayed to set aside the order ofthe Tribunal. 10. Contention that such petition for recalling an exparteorder, is filed under section 254(2) read with Rule 25 of theIncome Tax Appellate Tribunal Rules, 1963 to set aside theexparte order, and consequently for restoration of the appeal,is not disputed by Mr.M.Swaminathan, learned standing counselfor the respondent. But placing reliance on the decision of thiscourt in Vyline Glass Works Ltd vs. Assistant Commissioner ofWealth Tax reported in (2015) 373 ITR 355 Mad, learned standingcounsel for Income Tax department submitted that, even if theTribunal wants to recall the order, is invoking Section 254(2)of the Income Tax Act, 1961 and reasons have to be recorded, it cannot blindly recall the order, on the application forrectification. 11. He further submitted that this court further held thatpower to rectify can be exercised, only in a case, if there is amistake apparent on the face of record. Placing reliance on thedecision of the Bombay High Court in Bharat PetroleumCorporation Ltd vs. Income Tax Appellate Tribunal and othersreported in (2013) 359 ITR 371 Bom, Mr.M.Swaminathan, learnedStanding Counsel for the Revenue submitted that even if anapplication for rectification is filed under Section 254(2) ofthe Act, 1961, the Tribunal can rectify its order, only withinfour years from the date of the order, which is sought to berectified and in the case on hand, the very application forrecalling the order filed under Section 254(2) of the Act hasbeen filed beyond four years. For the above said reasons, hesubmitted that the order of the Tribunal dated 11.12.2015 madein MA No.96/mds/2015 in ITA No.638/mds/2011 does not call forany interference, and prayed for dismissal of the Tax Appeal. 12. Before adverting to the above contentions, let us have acursory look at the provisions referred to by the learnedcounsel for the appellant. 13. Section 254 of the Income Tax Act, 1961 deals with theorders passed by the Tribunal and it reads as under:Orders of Appellate Tribunal. 254. (1) The Appellate Tribunal may, after givingboth the parties to the appeal an opportunity ofbeing heard, pass such orders thereon as it thinksfit.(1A) [***] 12. Before adverting to the above contentions, let us have acursory look at the provisions referred to by the learnedcounsel for the appellant. 13. Section 254 of the Income Tax Act, 1961 deals with theorders passed by the Tribunal and it reads as under:Orders of Appellate Tribunal. 254. (1) The Appellate Tribunal may, after givingboth the parties to the appeal an opportunity ofbeing heard, pass such orders thereon as it thinksfit.(1A) [***] (2) The Appellate Tribunal may, at any timewithin six months from the end of the month in whichthe order was passed, with a view to rectifying anymistake apparent from the record, amend any orderpassed by it under sub-section (1), and shall makesuch amendment if the mistake is brought to itsnotice by the assessee or the Assessing Officer:Provided that an amendment which has the effect ofenhancing an assessment or reducing a refund orotherwise increasing the liability of the assessee,shall not be made under this sub-section unless theAppellate Tribunal has given notice to the assesseeof its intention to do so and has allowed theassessee a reasonable opportunity of being heard: Provided further that any application filed by theassessee in this sub-section on or after the 1st dayof October, 1998, shall be accompanied by a fee offifty rupees. (2A) In every appeal, the Appellate Tribunal,where it is possible, may hear and decide suchappeal within a period of four years from the end ofthe financial year in which such appeal is filedunder sub-section (1) or sub-section (2)of section253: Provided that the Appellate Tribunal may, afterconsidering the merits of the application made bythe assessee, pass an order of stay in anyproceedings relating to an appeal filed under sub-section (1) of section 253, for a period notexceeding one hundred and eighty days from the dateof such order and the Appellate Tribunal shalldispose of the appeal within the said period of stayspecified in that order: Provided further that where such appeal is not sodisposed of within the said period of stay asspecified in the order of stay, the AppellateTribunal may, on an application made in this behalfby the assessee and on being satisfied that thedelay in disposing of the appeal is not attributableto the assessee, extend the period of stay, or passan order of stay for a further period or periods asit thinks fit; so, however, that the aggregate ofthe period originally allowed and the period orperiods so extended or allowed shall not, in anycase, exceed three hundred and sixty-five days andthe Appellate Tribunal shall dispose of the appealwithin the period or periods of stay so extended orallowed: Provided also that if such appeal is not so disposedof within the period allowed under the first provisoor the period or periods extended or allowed underthe second proviso, which shall not, in any case,exceed three hundred and sixty-five days, the orderof stay shall stand vacated after the expiry of suchperiod or periods, even if the delay in disposing ofthe appeal is not attributable to the assessee. (2B) The cost of any appeal to the AppellateTribunal shall be at the discretion of thatTribunal. (3) The Appellate Tribunal shall send a copy of anyorders passed under this section to the assessee andto thePrincipal Commissioner or Commissioner. (4) Save as provided in section 256 or section 260A,orders passed by the Appellate Tribunal on appealshall be final. 14. Rule 24 of the Income Tax Appellate Tribunal Rules, 1963deals with hearing of appeal exparte for default by theappellant. Hearing of appeal ex parte for default by theappellant. 24. Where, on the day fixed for hearing or onany other date to which the hearing may beadjourned, the appellant does not appear in personor through an authorised representative when theappeal is called on for hearing, the Tribunal maydispose of the appeal on merits after hearing therespondent : (3) The Appellate Tribunal shall send a copy of anyorders passed under this section to the assessee andto thePrincipal Commissioner or Commissioner. (4) Save as provided in section 256 or section 260A,orders passed by the Appellate Tribunal on appealshall be final. 14. Rule 24 of the Income Tax Appellate Tribunal Rules, 1963deals with hearing of appeal exparte for default by theappellant. Hearing of appeal ex parte for default by theappellant. 24. Where, on the day fixed for hearing or onany other date to which the hearing may beadjourned, the appellant does not appear in personor through an authorised representative when theappeal is called on for hearing, the Tribunal maydispose of the appeal on merits after hearing therespondent : Provided that where an appeal has been disposed ofas provided above and the appellant appearsafterwards and satisfies the Tribunal that therewas sufficient cause for his non-appearance, whenthe appeal was called on for hearing, the Tribunalshall make an order setting aside the exparte orderand restoring the appeal.] 15. Rule 25 of the said rules deals with hearing of theappeal exparte for default by the respondent. They read asunder:Hearing of appeal exparte for default by therespondent. 25. Where, on the day fixed for hearing or anyother day to which the hearing may be adjourned,the appellant appears and the respondent does notappear in person or through an authorisedrepresentative when the appeal is called on forhearing, the Tribunal may dispose of the appeal onmerits after hearing the appellant :] Provided that where an appeal has been disposed ofas provided above and the respondent appearsafterwards and satisfies the Tribunal that therewas sufficient cause for his non-appearance whenthe appeal was called on for hearing, the Tribunalshall make an order setting aside the ex parteorder and restore the appeal. 16. Reading of both, Rules 24 and 25 of the Income TaxAppellate Tribunal Rules, 1963, does not indicate any outer timelimit prescribed for filing an application either by theappellant or respondent, as the case may be, to set aside theexparte order and to restore the appeal on file. Rules have beenframed enabling the appellant/respondent, before the Tribunal,who has suffered an exparte order, to seek for setting aside thesame and for restoration of the appeal. However, it could benoticed that under the guise of recalling an exparte order,petitions are being filed, indirectly challenging thecorrectness of the order, under Section 254 of the Act, and torectify the original order. 17. As per Section 253 of the Act, appeal has to be filedwithin the prescribed time limit of 60 days, and such appeal hasto be heard and disposed of within four years from the end ofthe financial year in which such appeal is filed under subsection (1) or sub section (2) of Section 253 of the Income TaxAct. That being the case, miscellaneous application filed beyondthe period of four years, is time barred. 18. In Vyline Glass Works Ltd vs. Assistant Commissioner ofWealth Tax reported in (2015) 373 ITR 355 Mad., a HonourableDivision Bench of this court considered the following decisions: 17. As per Section 253 of the Act, appeal has to be filedwithin the prescribed time limit of 60 days, and such appeal hasto be heard and disposed of within four years from the end ofthe financial year in which such appeal is filed under subsection (1) or sub section (2) of Section 253 of the Income TaxAct. That being the case, miscellaneous application filed beyondthe period of four years, is time barred. 18. In Vyline Glass Works Ltd vs. Assistant Commissioner ofWealth Tax reported in (2015) 373 ITR 355 Mad., a HonourableDivision Bench of this court considered the following decisions: 24. In the case of Honda Siel Power ProductsLtd., v. Commissioner of Income Tax reported in[2007] 295 ITR 466, the Supreme Court while dealingwith the scope of rectification, held as follows:"As stated above, in this case we areconcerned with the application under Section 254(2)of the 1961 Act. As stated above, the expression'rectification of mistake from the record' occursin Section 154. It also finds place in Section 254(2). The purpose behind the enactment of Section254(2) is based on the fundamental principle thatno party appearing before the Tribunal, be it anassessee or the Department, should suffer onaccount of any mistake committed by the Tribunal.This fundamental principle has nothing to do withthe inherent powers of the Tribunal. In the presentcase, the Tribunal in its order dated September 10,2003 allowing the rectification application hasgiven a finding that Samtel Color Ltd. (supra) wascited before it by the assessee but throughoversight it had missed out the said judgment whiledismissing the appeal filed by the assessee on thequestion of admissibility/allowability of the claimof the assessee for enhanced depreciation under Section 43A. One of the important reasons forgiving the power of rectification to the Tribunalis to see that no prejudice is caused to either ofthe parties appearing before it by its decisionbased on a mistake apparent from the record. 'Rule of precedent' is an important aspect oflegal certainty in rule of law. That principle isnot obliterated by Section 254(2) of the Income-taxAct, 1961. When prejudice results from an orderattributable to the Tribunal's mistake, error oromission, then it is the duty of the Tribunal toset it right. Atonement to the wronged party by thecourt or Tribunal for the wrong committed by it hasnothing to do with the concept of inherent power toreview." 26. In the case of L.D.Bhatia Hingwala (P)Ltd. v. Asst. CIT (Delhi) (FB) reported in [2011]330 ITR 243 (Delhi) (FB), the Full Bench of theDelhi High Court, while answering the referencewith regard to the power of the Tribunal to recallits order, after analysing the various decisionsincluding the decision of the Supreme Court in thecase of Honda Siel Power Products Ltd. (Supra),held as follows: "We have carefully perused the decisionsrendered by the High Courts of Madras, Bombay,Karnataka and Rajasthan which have been commendedto us by Mr. Mehta and we notice that the decisionwas distinguished on the factual score and none ofthe decisions have proceeded to say that it is nota precedent for the proposition that the Tribunalunder no circumstances can recall its own order. 33. In view of our aforesaid analysis, weproceed to state our conclusions in seriatim asfollows : "We have carefully perused the decisionsrendered by the High Courts of Madras, Bombay,Karnataka and Rajasthan which have been commendedto us by Mr. Mehta and we notice that the decisionwas distinguished on the factual score and none ofthe decisions have proceeded to say that it is nota precedent for the proposition that the Tribunalunder no circumstances can recall its own order. 33. In view of our aforesaid analysis, weproceed to state our conclusions in seriatim asfollows : (A) The decision rendered in Honda Siel PowerProducts Ltd. [2007] 295 ITR 466 by the apex courtis an authority for the proposition that theIncome-taxAppellateTribunalundercertaincircumstances can recall its own order and there isno absolute prohibition.(B) In view of the law laid down in Honda SielPower Products Ltd. [2007] 295 ITR 466 by the apexcourt, the decisions rendered by this court in K.L. Bhatia [1990] 182 ITR 361 (Delhi), Deeksha Suri[1998] 232 ITR 395 (Delhi), Karan and Co. [2002]253 ITR 131 (Delhi), J. N. Sahni [2002] 257 ITR 16(Delhi) and Smt. Baljeet Jolly [2001] 250 ITR 113(Delhi) which lay down the principle that the Tribunal under no circumstances can recall itsorder in entirety do not lay down the correctstatement of law. (C) Any other decision or authority which hasbeen rendered by pressing reliance on K. L. Bhatia[1990] 182 ITR 361 (Delhi) and the said line ofdecisions are also to be treated as not laying downthe correct pro position of law that the Tribunalhas no power to recall an order passed by it inexercise of power under Section 254(2) of the Act.(D) The Tribunal, while exercising the powerof rectification under Section 254(2) of the Act,can recall its order in entirety if it is satisfiedthat prejudice has resulted to the party which isattributable to the Tribunal's mistake, error oromission and which error is a manifest error and ithas nothing to do with the doctrine or concept ofinherent power of review. (E) When the justification of an order passedby the Tribunal recalling its own order is assailedin a writ petition, it is required to be tested onthe anvil of law laid down by the apex court inHonda Siel Power Products Ltd. [2007] 295 ITR 466(SC) and Saurashtra Kutch Stock Exchange Ltd.[2008] 305 ITR 227 (SC)." 19. In Madanlal vs. State of UP and others reported in(1975) 2 SCC 779, the Hon'ble Apex Court held that thedetermination of the statutory period of limitation runs fromthe date of notice, actual or constructive, after the making ofthe order. 20. In India House vs Kishan Lal vani reported in 2003 (9)SCC 393, the Hon'ble Apex Court held as follows: "The period of limitation statutorilyprescribed has to be strictly adhered to and cannotbe relaxed or departed from for equitableconsiderations. At the same time full effect shouldalso be given to those provisions which permitextension or relaxation in computing period oflimitation such as those contained in Section 12 ofthe Limitation Act. The underlying purpose of theseprovisions is to enable a litigant seekingenforcement of his right to any remedy to do soeffectively and harsh prescription of time-bar notunduly interfering with the exercise of statutoryrights and remedies. That is why Section 12 hasalways been liberally interpreted. To wit, the timerequisite for obtaining a copy of the impugneddecree, sentence or order has been held liable to be "The period of limitation statutorilyprescribed has to be strictly adhered to and cannotbe relaxed or departed from for equitableconsiderations. At the same time full effect shouldalso be given to those provisions which permitextension or relaxation in computing period oflimitation such as those contained in Section 12 ofthe Limitation Act. The underlying purpose of theseprovisions is to enable a litigant seekingenforcement of his right to any remedy to do soeffectively and harsh prescription of time-bar notunduly interfering with the exercise of statutoryrights and remedies. That is why Section 12 hasalways been liberally interpreted. To wit, the timerequisite for obtaining a copy of the impugneddecree, sentence or order has been held liable to be excluded from computing the period of limitationalthough such copy may not necessarily be requiredto be filed along with appeal, application or memoof representation or review. No distinction is drawnbetween decrees or orders pronounced on the originalside or the appellate or revisional side. Noapplication is required to be made seeking thebenefit of Section 12 of Limitation Act; it is thestatutory obligation of the Court to extend thebenefit where available. Although the language ofsub-Section (2) of Section 12 is couched in a formmandating the time requisite for obtaining the copybeing excluded from computing the period oflimitation, the easier way of expressing the ruleand applying it in practice is to find out theperiod of limitation prescribed and then add to itthe time requisite for obtaining the copy - the dateof application for copy, and the date of delivery,thereof both included - and treat the result ofaddition as the period of limitation. The underlyingprinciple is that such copy may or may not berequired to accompany the petition in thejurisdiction sought to be invoked yet to make upone's mind for pursuing the next remedy, forobtaining legal opinion and for appropriatelydrafting the petition by finding out the groundstherefor the litigant must be armed with such copy.Without the authentic copy being available theremedy in the higher forum or subsequentjurisdiction may be rendered a farce. All that sub-Section (2) of Section 12 of the Limitation Act saysis the time requisite for obtaining the copy beingexcluded from computing the period of limitation,or, in other words, as we have put it hereinabove,the time requisite for obtaining the copy beingadded to the prescribed period of limitation andtreating the result of addition as the periodprescribed. In adopting this methodology it does notmake any difference whether the application forcertified copy was made within the prescribed periodof limitation or beyond it. Neither it is soprovided in sub-section (2) of Section 12 of theLimitation Act nor in principle we find any reasonor logic for taking such a view." 21. Even taking for granted that the judgments of the ApexCourt are applicable to the case on hand and that the period oflimitation of four years for filing an application for recallingan order filed under Section 254(2) of the Income Tax Act,1961, has to be computed from the date of service of the order, 21. Even taking for granted that the judgments of the ApexCourt are applicable to the case on hand and that the period oflimitation of four years for filing an application for recallingan order filed under Section 254(2) of the Income Tax Act,1961, has to be computed from the date of service of the order, averments made in the said petition, filed in the year 2015, arebereft of details, as to when the order was served in theaddress, where the office of the appellant is situated. Order ofthe Tribunal in ITA No.638/mds/2011, has been passed on18.7.2011, whereas, the appellant has filed the petition on24.7.2015, which is beyond four years from the date of passingof the order by the Tribunal on 18.7.2011. ThoughMr.J.Balachander, learned counsel for the appellant, submittedthat in the normal course, service of order, on the party wouldtake some time, and therefore the miscellaneous applicationfiled on 24.7.2015 was just six days exceeding the four yearsperiod from the date of passing the order and therefore, theTribunal ought to have considered the time taken for service ofthe impugned order and allowed the application forrectification, we are not inclined to accept the saidcontention, for the reason that, there are no averments in themiscellaneous petition, as to when the order was served on theappellant. 22. Due diligence and caution, are the essentialrequirements. It is true that due diligence cannot be measuredby any absolute standard but it depends on relative facts of aparticular case. Due diligence is a measure of prudence by thelitigant, who is expected to be reasonable and prudent, underthe particular circumstances. In the case on hand, laches on thepart of the appellant is apparent. 23. The delay and laches on the part of the petitioners isper se apparent. In this context, this Court deems it fit toextract few decisions dealing with delay and laches, which areas follows:(i) In P.S.Sadasivaswamy v. State of Tamil Nadu reported inAIR 1974 SC 2271, the Apex Court held as follows;- "....... A person aggrieved by an order ofpromoting a junior over his head should approach theCourt at least within six months or at the most a yearof such promotion. It is not that there is any periodof limitation for the Courts to exercise their powersunder Article 226 nor is it that there can never be acase where the Courts cannot interfere in a matterafter the passage of a certain length of time. But itwould be a sound and wise exercise of discretion forthe Courts to refuse to exercise their extraordinarypowers under Article 226 in the case of persons who donot approach it expeditiously for relief and who standby and allow things to happen and then approach theCourt to put forward stale claims and try to unsettlesettled matters. The petitioner’s petition should,therefore, have been dismissed in limine. Entertainingsuch petitions is a waste of time of the Court. It clogs the work of the Court and impedes the work ofthe Court in considering legitimate grievances as alsoits normal work. We consider that the High Court wasright in dismissing the appellant’s petition as wellas the appeal." (ii) In State of M.P.V. Bhailal Bhai reported in AIR 1964 SC1006, the Supreme Court held that it is not either unreasonabledelay denies to the petitioner the discretionary extraordinaryremedy of mandamus, certiorari or any other relief. (III) In State of M.P., V. Nandlal Jaismal reported in 1986 (4) SCC 566, the Supreme Court, at Paragraph 24, held as follows: clogs the work of the Court and impedes the work ofthe Court in considering legitimate grievances as alsoits normal work. We consider that the High Court wasright in dismissing the appellant’s petition as wellas the appeal." (ii) In State of M.P.V. Bhailal Bhai reported in AIR 1964 SC1006, the Supreme Court held that it is not either unreasonabledelay denies to the petitioner the discretionary extraordinaryremedy of mandamus, certiorari or any other relief. (III) In State of M.P., V. Nandlal Jaismal reported in 1986 (4) SCC 566, the Supreme Court, at Paragraph 24, held as follows: "24. Now, it is well settled that the power ofthe High Court to issue an appropriate writ underArticle 226 of the Constitution is discretionary andthe High Court in the exercise of its discretion doesnot ordinarily assist the tardy and the indolent orthe acquiescent and the lethargic. If there isinordinate delay on the part of the petitioner infiling a writ petition and such delay is notsatisfactorily explained, the High Court may declineto intervene and grant relief in the exercise of itswrit jurisdiction. The evolution of this rule oflaches or delay is premised upon a number of factors.The High Court does not ordinarily permit a belatedresort to the extraordinary remedy under the writjurisdiction because it is likely to cause confusionand public inconvenience and bring in its train newinjustices. The rights of third parties may interveneand if the writ jurisdiction is exercised on a writpetition filed after unreasonable delay, it may havethe effect of inflicting not only hardship andinconvenience but also injustice on third parties.When the writ jurisdiction of the High Court isinvoked, unexplained delay coupled with the creationof third party rights in the meanwhile is animportant factor which always weighs the High Courtin deciding whether or not to exercise suchjurisdiction. We do not think it necessary to burdenthis judgment with reference to various decisions ofthis Court where it has been emphasised time andagain that where there is inordinate and unexplaineddelay and third party rights are created in theintervening period, the High Court would decline tointerfere, even if the State action complained of isunconstitutional or illegal. .........Of course, thisrule of laches or delay is not a rigid rule which can be cast in a strait jacket formula, for there may becases where despite delay and creation of third partyrights the High Court may still in the exercise ofits discretion interfere and grant relief to thepetitioner. But, such cases where the demand ofjustice is so compelling that the High Court would beinclined to interfere in spite of delay or creationof third party rights would by their very nature befew and far between. Ultimately it would be a matterwithin the discretion of the court; ex hypothesievery discretion must be exercised fairly and justlyso as to promote justice and not to defeat it." (iv) In State of Maharastra v. Digambar reported inAIR 1995 SC 1991, the Supreme Court, considered acase where compensation for the acquired land wasclaimed belatedly and at Paragraphs 12, 18 and 21,held as follows: (iv) In State of Maharastra v. Digambar reported inAIR 1995 SC 1991, the Supreme Court, considered acase where compensation for the acquired land wasclaimed belatedly and at Paragraphs 12, 18 and 21,held as follows: "12. How a person who alleges against the State ofdeprivation of his legal right, can get relief ofcompensation from the State invoking writ jurisdictionof the High Court under article 226 of theConstitution even though, he is guilty of laches orundue delay is difficult to comprehend, when it iswell settled by decision of this Court that no person,be he a citizen or otherwise, is entitled to obtainthe equitable relief under Article 226 of theConstitution if his conduct is blame-worthy because oflaches, undue delay, acquiescence, waiver and thelike. Moreover, how a citizen claiming discretionaryrelief under Article 226 of the Constitution against aState, could be relieved of his obligation toestablish his unblameworthy conduct for getting suchrelief, where the State against which relief is soughtis a welfare State, is also difficult to comprehend.Where the relief sought under Article 226 of theConstitution by a person against the welfare State isfounded on its alleged illegal or wrongful executiveaction, the need to explain laches or undue delay onhis part to obtain such relief, should, if anything,be more stringent than in other cases, for the reasonthat the State due to laches or undue delay on thepart of the person seeking relief, may not be able toshow that the executive action complained of was legalor correct for want of records pertaining to theaction or for the officers who were responsible forsuch action not being available later on. Further,where granting of relief is claimed against the Stateon alleged unwarranted executive action, is bound to result in loss to the public exchequer of the State orin damage to other public interest, the High Courtbefore granting such relief is required to satisfyitself that the delay or laches on the part of acitizen or any other person in approaching for reliefunder Article 226 of the Constitution on the allegedviolation of his legal right, was wholly justified inthe facts and circumstances, instead of ignoring thesame or leniently considering it. Thus, in our view,persons seeking relief against the State under Article226 of the Constitution, be they citizens orotherwise, cannot get discretionary relief obtainablethereunder unless they fully satisfy the High Courtthat the facts and circumstances of the case clearlyjustified the laches or undue delay on their part inapproaching the Court for grant of such discretionaryrelief. Therefore, where a High Court grants relief toa citizen or any other person under Article 226 of theConstitution against any person including the Statewithout considering his blame-worthy conduct, such aslaches or undue delay, acquiescence or waiver, therelief so granted becomes unsustainable even if therelief was granted in respect of alleged deprivationof his legal right by the State. 18. Laches or undue delay, the blame-worthyconduct of a person in approaching a Court of Equityin England for obtaining discretionary relief whichdisentitled for grant of such relief was explainedsuccinctly by Sir Barnes Peacock, long ago, in LindsayPetroleum Co. v. Prosper Armstrong (1874) 5 PC 221)thus : 18. Laches or undue delay, the blame-worthyconduct of a person in approaching a Court of Equityin England for obtaining discretionary relief whichdisentitled for grant of such relief was explainedsuccinctly by Sir Barnes Peacock, long ago, in LindsayPetroleum Co. v. Prosper Armstrong (1874) 5 PC 221)thus : "Now the doctrine of laches inCourts of Equity is not an arbitrary or atechnical doctrine. Where it would bepractically unjust to give a remedy, eitherbecause the party has, by his conduct, donethat which might fairly be regarded asequivalent to a waiver of it, or where by hisconduct and neglect he has, though perhapsnot waiving that remedy, yet put the otherparty in a situation, in which it would notbe reasonable to place him if the remedy wereafterwards to be asserted, in either of thesecases, lapse of time and delay are mostmaterial. But in every case, if an argumentagainst relief, which otherwise would bejust, is founded upon mere delay, that delayof course not amounting to a bar by any statute or limitations, the validity of thatdefence must be tried upon principlessubstantially equitable. Two circumstances,always important in such cases, are, thelength of the delay and the nature of theacts done during the interval, which mightaffect either party and cause a balance ofJustice or injustice in taking the one courseor the other, so far as it relates to theremedy." 21. Therefore, where a High Court in exercise ofits power vested under Article 226 of the Constitutionissues a direction, order or writ for granting reliefto a person including a citizen without consideringhis disentitlement of such relief due to hisblameworthy conduct of undue delay or laches inclaiming the same, such a direction, order or writbecomes unsustainable as that not made judiciously andreasonably in exercise of its sound judicialdiscretion, but as that made arbitrarily." (V). IN STATE OF RAJASTHAN V. D.R.LAXMI REPORTED IN 1996(6) SCC 445, THE SUPREME COURT OBSERVED THAT THOUGH THE ORDERMAY BE VOID, IF THE PARTY DOES NOT APPROACH THE COURT WITHIN AREASONABLE TIME, WHICH IS ALWAYS A QUESTION OF FACT AND HAVE THEORDER INVALIDATED OR ACQUIESCED OR WAIVED, THE DISCRETION OF THECOURT HAS TO BE EXERCISED IN A REASONABLE MANNER. (vi). In Chairman, U.P. Jal Nigam and another v. Jaswant Singhreported in AIR 2007 SC 924, the Supreme Court, after considering acatena of decisions on the aspect of delay, at Paragraph 13, held asfollows: "13........Therefore, whenever it appears thatthe claimants lost time or while away and did not riseto the occasion in time for filing the writ petitions,then in such cases, the Court should be very slow ingranting the relief to the incumbent. Secondly, it hasalso to be taken into consideration the question ofacquiescence or waiver on the part of the incumbentwhether other parties are going to be prejudiced ifthe relief is granted." 24. Further in H.Dohil Constructions Company Private LimitedV. Nahar Exports Limited and Another, reported in 2015 (1)Supreme Court Cases 680, the Hon'ble Supreme Court, afterconsidering a Hon'ble Division Bench judgment of this Court inTamilnadu Mercantile Bank Ltd., Vs. Appellate Authority,reported in (1990) 1 LLN 457 and decision of the Supreme Courtin Esha Bhattacharjee v. Raghunathpur Nafar Academy, reported in https://hcservices.ecourts.gov.in/hcservices/ (2013) 12 SCC 649 at paragraph Nos.23 and 24, held as follows:“23. We may also usefully refer to the recentdecision of this Court in Esha Bhattacharjee [EshaBhattacharjee v. Raghunathpur Nafar Academy, reportedin (2013) 12 SCC 649], where several principles wereculled out to be kept in Principles (iv), (v), (viii),(ix) and (x) of para 21 can be usefully referred to,which read as under: (SCCpp.658-59) “21.4(iv) No presumption can be attached todeliberate causation of delay but, gross negligence onthe part of the counsel or litigant is to be taken noteof. https://hcservices.ecourts.gov.in/hcservices/ (2013) 12 SCC 649 at paragraph Nos.23 and 24, held as follows:“23. We may also usefully refer to the recentdecision of this Court in Esha Bhattacharjee [EshaBhattacharjee v. Raghunathpur Nafar Academy, reportedin (2013) 12 SCC 649], where several principles wereculled out to be kept in Principles (iv), (v), (viii),(ix) and (x) of para 21 can be usefully referred to,which read as under: (SCCpp.658-59) “21.4(iv) No presumption can be attached todeliberate causation of delay but, gross negligence onthe part of the counsel or litigant is to be taken noteof. 21.5. (v) Lack of bona fides imputable to a partyseeking condonation of delay is a significant andrelevant fact. 21.8. (viii) There is a distinction betweeninordinate delay and a delay of short duration or fewdays, for to the former doctrine of prejudice isattracted whereas to the latter it may not beattracted. That apart, the first one warrants strictapproach whereas the second calls for a liberaldelineation. 21.9 (ix) The conduct, behaviour and attitude of aparty relating to its inaction or negligence arerelevant factors to be taken into consideration. It isso as the fundamental principle is that the courts arerequired to weight the scale of balance of justice inrespect of both parties and the said principle cannotbe given a total go-by in the name of liberal approach.21.10. (x) If the explanation offered is concoctedor the grounds urged in the application are fanciful,the courts should be vigilant not to expose the otherside unnecessarily to face such a litigation. 24. When we apply those principles to the case onhand, it has to be stated that the failure of theRespondents in not showing due diligence in filing ofthe appeals and the enormous time taken in the refilingcan only be construed, in the absence of any validexplanation, as gross negligence and lacks in bonafidesas displayed on the part of the Respondents. Further,when the Respondents have not come forward with properdetails as regar