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Judgment
This appeal is directed against the order of the Tribunal dated December 24, 1999, on a miscellaneous application u/s 254(2) of the Income Tax Act, 1961.
The appellant is a public limited company duly incorporated under the provisions of the Companies Act, 1956. The relevant assessment year is 1990-91. On May 31, 1995, the Tribunal has decided the appeal in I. T. A. No. 1122/ JP of 1994. Thereafter, the miscellaneous application has been moved for rectification of the order u/s 254(2) of the Income Tax Act, 1961. The application has been rejected by the Tribunal holding that as to how the miscellaneous application can be allowed on December 24, 1999. As four years have expired, therefore, no mistake, in the appeal order, can be rectified.
Heard learned counsel for the parties. The provisions of Sub-section (2) of Section 254 reads as under :
"The Appellate Tribunal may, at any time within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under Sub-section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the Assessing Officer."
The admitted facts are that in appeal, the Tribunal has passed the order on May 31, 1995, and the assessee has moved the miscellaneous application on December 15, 1998, before the Tribunal, i.e., within four years, though the order has been passed on miscellaneous application on December 24, 1999. It is true that in the language the words used are that the Appellate Tribunal may at any time within four years from the date of the order rectify the mistake apparent from the record but that does not mean that if the application is moved within the period allowed, i.e., four years, and that remains pending before the Tribunal and after the expiry of four years if the Tribunal rejects that application on the ground that now four years lapsed therefore the order in appeal cannot be rectified, that view is erroneous.
Once the assessee has moved the application within four years from the date of appeal order, the Tribunal cannot reject that application on the ground that now four years have lapsed, which includes the period of pendency of the application before the Tribunal. If the assessee has moved the application within four years from the date of the order, the Tribunal is bound to decide the application on the merits and not on the ground of limitation. Therefore, in our view, when the application was moved within four years that should be decided on the merits.
As the application u/s 254(2) has not been decided on the merits, we restore the matter back to the Tribunal with a direction to decide the application on the merits. The other questions which are raised need not be decided, as the matter has been restored back to the Tribunal to decide the grounds raised in the miscellaneous application u/s 254(2) of the Income Tax Act, 1961.
The Tribunal is further directed to dispose of the miscellaneous application within three months from the date of receipt of this order.
The appeal stands disposed of with the above directions.