Section 254(2) of the Income Tax Act, 1961 read with Article 226 of the Constitution of India — Tribunal has recalled the ex-parte order and fixed the appeal for hearing afresh, which has been filed by none else than the assessee. Ultimately, what the Tribunal has done is only to provide an opportunity of hearing to the assessee and no prejudice has been caused to the revenue by such order of the Tribunal, thus, Writ petition is dismissed.[2020] 53 ITCD 069 (BOM)
Facts: This petition has been filed under Article 226 of the Constitution of India by the Principal Commissioner of Income Tax-7, Mumbai assailing the legality and correctness of order dated 1st February, 2019 passed the Tribunal for the assessment year 2006-07, whereby the earlier order of the Tribunal dated 10th January, 2018 passed in Income Tax Appeal No.3910/Mum/2010 has been recalled and the appeal has been directed to be placed for hearing afresh. It may be mentioned that the assessee had preferred Income Tax Appeal No. 3910/Mum/2010 for the assessment year 2006-07 before the Tribunal against the order passed by the Commissioner of Income Tax (Appeals)-13, Mumbai dated 6th January, 2010. By order dated 10th January, 2018, Tribunal dismissed the appeal. From a perusal of the order dated 10th January, 2018 it is seen that there was no representation on behalf of the assessee and Tribunal decided the appeal on merit in the absence of the assessee after hearing the Departmental Representative. Assessee thereafter filed an application for recall of the aforesaid order dated 10th January, 2018 and for hearing the appeal afresh. The said application was registered as MA No.483/M/2018. After hearing learned counsel for respondent No.2 as well as the Departmental Representative, Tribunal passed the impugned order dated 1st February, 2019 recalling the earlier order dated 10th January, 2018 and fixing the appeal for hearing afresh on merit.
Held, that  from a careful reading of the provision, it is seen that Tribunal is vested with the power to rectify any mistake apparent from the record to amend any order passed by it under sub-section (1) of Section 254 at any time within six months from the end of the month in which the order was passed, provided the mistake is brought to its notice by the assessee or by the Assessing Officer. The use of the expression "may" in the aforesaid provision is clearly indicative of the legislative intent that the limitation period of six months from the end of the month in which the order was passed is not to be construed in such a manner that there can not be any extension of time beyond the said period of six months. This is so because the assessee or the Assessing Officer can only bring the mistake to the notice of the Tribunal. The assessee or the Assessing Officer has no control over the Tribunal. For one reason or the other, the Tribunal may not be in a position to pass the order under Section 254(2). For the inability of the Tribunal to pass such an order within the period provided, neither the assessee nor the revenue should suffer. What therefore becomes relevant is that the assessee or the Assessing Officer should bring the mistake to the notice of the Tribunal within the limitation period.By the said order Tribunal has recalled the ex-parte order and fixed the appeal for hearing afresh, which has been filed by none else than the assessee. Ultimately, what the Tribunal has done is only to provide an opportunity of hearing to the assessee. No prejudice has been caused to the revenue by such order of the Tribunal. Thus, having regard to the discussions made above and on due consideration, we are of the view that the challenge made by the revenue in this writ petition is misconceived. Consequently we find no merit in the writ petition. Writ petition is accordingly dismissed, but without any order as to costs.