whether on retrosoective amendment MA u/s 254(2) can be filed?

[pawansingla]

ACIT vs. GTL Ltd (ITAT Mumbai)
(64.1 KiB, 282 DLs)
 

Retrospective amendment after passing order does not lead to "apparent mistake"



Following HCL Comnet 305 ITR 409 (SC), the Tribunal took the view vide order dated 17.3.2009 that provision for bad debts debited to the P&L A/c could not be added to the "book profits" u/s 115JA. To supercede HCL Comnet, clause (g) was inserted in the Explanation to s. 115JA by the F. A. 2009 w.r.e.f 1.4.1998. The amendment received the assent of the President on 19.8.2009, after the order of the Tribunal was passed. The department filed a MA contending that in view of the said retrospective amendment, there was a "mistake apparent from the record". HELD dismissing the application:



As per the law laid down in Sudhir Mehta 265 ITR 548 (Bom), where an order is passed as per the prevailing law, a retrospective amendment which comes into force after the date of the passing of the order does not show any mistake in the order.

The Hon,ble Mumbai Tribunal has dismissed the MA of the department. But , i feel the below mentioned judgment of
The MUMBAI TRIBUNAL in case of KAILASHNATH MALHOTRA v/s JT.CIT(TM) 34 SOT 541 has held that
Section 254 of the Income Tax Act
Para-11" It will be an error apparent from records , if the order is not in conformity with the retrospective amendment carried out to the statutory provision covering the period and point in dispute , subject to the fulfillment of other conditions prescribed in the Act such as limitation period etc "

was not brought to the notice of Hon/ble as seen from the orders. The judgement being of third member was binding on the co-ordinate bench. Department may try again and in other cases.

[pawansingla]

2010-TIOL-774-ITAT-MUM

IN THE INCOME TAX APPELLATE TRIBUNAL
BENCH 'F' MUMBAI

Miscellaneous Applications Nos. 84 & 85/Mum/2010
ITA Nos.5104 & 5105/Mum/2004
Assessment Years: 1999-00 & 2000-2001

ASST COMMR OF INCOME TAX
CNTRE-1, MUMBAI

Vs

M/s UNION BANK OF INDIA
239 VIDHAN BHAVAN ROAD
NARIMAN POINT, MUMBAI-21

CROSS OBJECTIONS No.88 & 89/Mum/2010

M/s UNION BANK OF INDIA
239 VIDHAN BHAVAN ROAD
NARIMAN POINT, MUMBAI-21

Vs

ASST COMMR OF INCOME TAX
CNTRE-1, MUMBAI

D Manmohan, VP and R K Panda, AM

Dated: November 19, 2010

Appellants Rep by: Shri C Naresh
Respondents Rep by: Shri Jitendra Yadav/DR

Income Tax - Section 254(2) - Whether, in view of the retrospective amendment in Sec 115JA relating to consideration of provision for bad and doubtful debts for purpose of book profit, the MA filed by the Revenue is to be upheld.

In this case the AO disallowed the claim of the assessee vis-à-vis provision of bad and doubt full debts for the purpose of computing book profit - CIT(A) affirmed the view of the AO - ITAT relying on the special bench decision in the case of Usha Martin allowed the claim of the assessee - Revenue filed MA in view of the retrospective amendment.

After hearing the parties the ITAT held that,

++ undisputedly, the Tribunal in the instant case following the decision of the Special Bench of the Tribunal in the case of Usha Matine Industries Ltd has directed the Assessing Officer not to add bad and doubtful debts and provision for rural advances for the purpose of sec. 115JA of the I T Act. The order of the Tribunal is dated 9.5.2008. The provisions of sec. 115JA were amended by the Finance (No.2) Act 2009 with retrospective effect from 1.4.1998. Therefore, the question that arises is whether the order of the Tribunal, which was passed prior to the insertion of the provisions with retrospective effect, can be rectified or not;

++ the various decisions relied on by the counsel for the assessee are not applicable to the facts of the present case since in none of the cases the decision of the Supreme Court has been considered. As regards the decision in the case of Max India Ltd, the issue was u/s 263 of the I T Act. Since the Assessing Officer in that case has taken one view which was permissible in law and since the provisions of sec. 80HHC was amended eleven times and different views existed when the AO passed the order and the mechanics of that section had become so complicated over the years; therefore, the Supreme Court under that context had held that the subsequent amendment of section 80HHC, even though retrospective would not attract the provisions of sec. 263. However, in the instant case, there is no such complication nor the issue is u/s 263. Therefore, the decision of the Supreme Court relied on by the AR is not applicable to the facts of that case. In this view of the matter, the Miscellaneous Applications filed by the revenue has to be allowed.

Revenue's appeal allowed.

ORDER