FLEMINGO LINERS PVT LTD.,,MUMBAI vs. ITO, WQARD-15(1)(1), MUMBAI

IN THE INCOME-TAX APPELLATE TRIBUNAL “F” BENCH,
MUMBAI
BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER
&
SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER

ITA 6176/MUM/2024
(A.Y. 2012-13)

Flemingo Liners Private
Limited,
D-73/1,
TTC
Industrial
Area,
MIDC,
Turbhe Sanpada S.O., New
Mumbai, Thane - 400 705
v/s.
बनाम
Income Tax Officer,
Ward-15(1)(1),
Mumbai,
Aayakar

Bhavan,
M.K,
Road, Mumbai 400 020
स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AADCG2781J
Appellant/अपीलार्थी
..
Respondent/प्रतिवादी

Appellant by :
Shri Jaiprakash Bairagra
Respondent by :
Ms. Nidhi Agarwal (Sr. DR)

Date of Hearing
08.01.2025
Date of Pronouncement
14.01.2025

आदेश / O R D E R

PER PRABHASH SHANKAR [A.M.] :-

Present appeal emanating from the appellate order dated
30.09.2024 is filed by the assessee against the order of the Learned
Commissioner of Income-tax (Appeals)/National Faceless Appeal
Centre, Delhi [hereinafter referred to as “CIT(A)”] pertaining to order u/s. 154 of the Income-tax Act, 1961 [hereinafter referred to as “Act”]
dated 09.08.2021 as passed by the Income Tax Officer, Ward-15(1)(1),
Mumbai for the Assessment Year [A.Y.] 2012-13. P a g e | 2
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the TDS of Rs. 51,39,779/-. The relevant extract of the rectification order is reproduced as under:-
“The assessee company has filed letters dated
29.10.2020
and 10.02.2021in this office stating therein that credit for TDS of Rs.51,39,779/- was not given while completing the assessment u/s.143(3) for A.Y. 2012-13
and therefore, requested to issue refund after giving credit for the same which as per the assessee is reflecting in 26AS.On verification of the record, it is seen that the assessment u/s. 143(3) for A.Y. 2012-13 was completed on 25.02.2015. As per provisions of section 154(7) of the Act, no amendment u/s. 154 of the Act can be made after the expiry of four years from the end of the financial year in which the order sought to be amended was passed. In the instant case the order u/s.143(3) was passed on 25.02.2015 and the assessee has not made any application for rectification within the time limit prescribed in sec.154 of the Act. In view of the above, the assessee's request for giving credit to TDS of Rs.51,39,779/- cannot be considered at this stage and, therefore, the same is hereby rejected.”

Flemingo Liners Pvt. Ltd.

assessment order. However, the above TDS was reflecting in Form 26AS from Sept, 2019. Subsequently, the assessee filed an application for giving TDS credits and deleting of erroneously charged interest u/s 234B before the ld. AO, who passed the rectification order u/s 154 of the Act wherein he refused to allow the credit of TDS of Rs. 51,39,779/-on the ground of time limitation u/s 154(7) of the Act. It is argued that TDS paid by the deductor reflected in the Form 26AS of the company only on 28-09-2019 and hence, the rectification application u/s 154 of the Act was correctly made on 09-10-2019 i.e. after the date on which TDS credit reflected in the Form 26AS of the company. Thus, the order passed u/s 154 of the Act rejecting to give credit of the TDS of Rs.
51,39,779/-was not justified.
5.1 In support of above contention, the ld.AR relied on the following decisions:
a) Decision of Hon'ble Supreme Court of India in the case of Commissioner of Income-tax Vs. Shelly Products, 261 ITR 367
wherein it has been held under:
“Section 240 of the Income-tax Act, 1961, read with article 265 of the Constitution Refunds - Refund on appeal, etc. Assessment year 1976- 77 Whether on failure or inability of authorities to frame a regular assessment after earlier assessment is set aside or nullified, tax /deposited by an assessee by way of advance tax or self-assessment tax, of tax deducted at source is liable to be refunded to assessee, since its retention by revenue would result in breach of article 265 of Constitution which prohibits levy or collection of any tax except by authority of law, Held, no.”

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b) Decision of Hon'ble Supreme Court of India in the case of Principal Commissioner of Income-tax vs Jaswinder Pal Singh,
164 Taxmann.com 548, dated 10-07-2024 wherein SLP was dismissed against High Court ruling that where assessee, a disabled officer of Indian
Army, received disability pension with effect from date of retirement vide order dated 4-12-2017, in view of circular No.
2/2001, dated 2-7-2001, such pension was exempted from income-tax, and thus, amount of income tax paid by assessee for relevant assessment years on exempted income of disability pension was to be refunded to him.

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consequence should not follow. In M/s. Hiralal Ratanlal vs. STO,
AIR 1973 SC 1034, Hon’ble Supreme Court observed:
"In construing a statutory provision the first and foremost rule of construction is the literal construction. All that the Court has to see at the very outset is what does the provision say. If the provision is unambiguous and if from the provision the legislative intent is clear, the Court need not call into aid the other rules of construction of statutes. The other rules of construction are called into aid only when the legislative intent is not clear."
6.2 It may be mentioned in this connection that the first and foremost principle of interpretation of a statute in every system of interpretation is the literal rule of interpretation. The other rules of interpretation e.g. the mischief rule, purposive interpretation etc. can only be resorted to when the plain words of a statute are ambiguous or lead to no intelligible results or if read literally would nullify the very object of the statute. Where the words of a statute are absolutely clear and unambiguous, recourse cannot be had to the principles of interpretation other than the literal rule as held in Swedish Match AB vs. Securities and Exchange Board, India, AIR 2004 SC 4219. It was held in Prakash Nath Khanna vs. C.I.T. 2004 (9) SCC 686, the language employed in a statute is the determinative factor of the legislative intent. The legislature is presumed to have made no mistake.
The presumption is that it intended to say what it has said. Assuming there is a defect or an omission in the words used by the legislature, the P a g e | 8
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Bansal vs. State of Rajasthan & Anr. AIR 2003 SC 1405, State of Jharkhand & Anr. vs. Govind Singh JT 2004(10) SC 349 etc.
It is for the legislature to amend the law and not the Court vide State of Jharkhand & Anr. vs. Govind Singh JT 2004(10) SC 349.In Shiv
Shakti
Co-operative
Developers AIR 2003 SC 2434, the Apex Court observed:

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"It is a well settled principle in law that the Court cannot read anything into a statutory provision which is plain and unambiguous. A statute is an edict of the legislature. The language employed in a statute is the determinative factor of legislative intent."
6.3 In the present case, the ld.AO has, in view of the time limitation laid down in section 154(7) of the Act rightly rejected the application of the assessee for rectification to allow TDS credit which was not permissible in the light of unambiguous provisions of this section. If we look into the purpose, object, text, and context of section 154(7) ,then it would be clear that the purpose of providing limitation of 4 years is to give certainty and finality to the order passed by the A.O. In this connection,reference is made of the decision of the Co-ordinate Bench of ITAT,Hyderabad in the case of Zintec Software P.Ltd ITA No.1690/HYD/2028 17-
08.2022 where with regard to these provisions vis-a-vis intimation u/s 143(1),it was observed “ that it is abundantly clear that the ld. CIT(A) relied upon section 154(7) of the Act to deny rectification of the order passed by the CPC u/s 143(1) of the Act. The rectification of a mistake apparent from the record is required to be made by the Income Tax
Authorities u/s 154 of the Act either suo moto or on the application of assessee. The limitation for rectification of the apparent mistake has been provided by the Act for a period of 4
years u/s 154(7) of the Act.
Though under section 154(7) no separate limitation period had been provided for rectification of intimation, as in this section only "order" had been used, however, the order used in this subsection, in our opinion, shall include the intimation issued under section 143(1) of the Act. Though intimation is not an assessment order but nonetheless it is an order for all purposes under the act including under section 246 of the Act. The intimation is P a g e | 10
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nothing but finalization of computation based on the return of income filed by the assessee without providing the opportunity of hearing to the assessee with the limited power to the CPC as provided by the Act.
But nonetheless, based on this intimation/order the refunds/demand are raised by the tax authorities. The intimation may not be the assessment order but for all purposes it will be an order under the Act, therefore the limitation provided for rectification of intimation would only be four years, as in the case of order. However, if we accept the logic, that no limitation has been provided u/s 154(7) of the Act for the purpose of rectification then sequel to that would be that Assessing
Officer be in liberty to rectify the intimation either suo-moto or on the application even after a period of 4 years. That cannot countenance. As it would lead to unintended results by conferring the powers to Assessing Officer to rectify any mistake apparent from record in respect of intimation beyond a period of 4 years. In the present case, if we look into the purpose, object, text, and context of section 154(7) ,then it would be clear that the purpose of providing limitation of 4 years was to give certainties and finality to the order passed by the CPC/A.O.
If we read that the limitation provided under section 154(7) is not be available in the case of passing of any intimation to rectify the order, then chaos would happen and unlimited power would be available to the Assessing Officer/CPC to rectify the mistake even after the lapse of 4 years. In the light of the above, we are of the opinion that limitation for rectification under 154(7) is 4 years even for intimation also.”The decision of the hon’ble ITAT clearly brings out the essence that the provisions of section 154(7) laying down the time limitation for any rectification within a period of 4 years not puts restrictions on the AO

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but is also applicable to the assessees alike who are under obligation to act within the time limitation only.
6.4 The co-ordinate bench of ITAT, Mumbai in the case of Naresh
Jeramdas Idnani vs ITO, IntTax Ward-2(2)(1), Mumbai dated in ITA No.3787/Mum/2024 28.11.2024, while deciding a case where the AO tried to travel beyond the provisions of section 154(7) in considering a Valuation report held that “admittedly, the Assessing
Officer has exercised powers under Section 154 of the Act. As per Section 154(7) of the Act, no order of rectification can be passed after the expiry of 4 years from the end of the financial years in which order sought to be rectified has been passed. Unlike Section 153 of the Act, which provides the time limit for completion of assessment, Section 154(7) of the Act does not contain any clauses for exclusion of any time taken for obtaining report in reference made Section 142A/55A of the Act. Section 154(7) of the Act prescribes an outer limit within which rectification order must be passed. In the present case, the Assessment Order was passed on 28/12/2018 which falls within the Financial Year 2018-2019. The period of 4 years specified under Section 154(7) lapsed on 31/03/2023. Since the Rectification Order was passed on 25/07/2023, the same is barred by limitation prescribed in Section 154(7) of the Act.
Even if the contention of the contention of the Revenue is accepted that there is no time limit prescribed to give effect to the report received from DVO in a reference made under Section 55A of the Act, there is time limit prescribed in Section 154(7) of the Act to pass a rectification order in terms of Section 154(1) of the Act. Admittedly, the Assessing
Officer has exercised powers of rectification to pass order

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under Section 154(1) of the Act which should have been passed within the time limit of 4 years prescribed under Section 154(1) of the Act. In any case, it is settled law that where no time limit has been prescribed, the order should be passed within a reasonable time. In our view, unless the facts and circumstances of the case provide otherwise, a period of 4 years from the end of relevant previous year in which order sought to be rectified has been passed is a reasonable time. Therefore, we reject the contention of the Revenue that the Assessing Officer can pass an order under Section 154 of the Act any time as the Assessing
Officer may deem fit since no time limit has been prescribed.”
6.5 The ld.AR in support of his arguments, has also relied on the decision of hon’ble
Supreme
Court in the case of Shelly
Products(supra).We find ratio of the case is not applicable to the facts of the case. The question that arose for consideration in these appeals was whether on the facts and in the circumstances of the case the respondents were entitled to the refund of income-tax paid by them by way of advance tax and self-assessment tax in the event of assessment framed being nullified by the Tribunal on the ground of juri iction and there being no possibility of framing a fresh assessment. Apparently, there is no similarity in the facts of the cited decision vis-a-vis case of the assessee. Likewise the decision in the case of Jaswinder Pal Singh
(supra),facts are clearly distinguishable. Hon’ble Apex Court dismissed
SLP in the case where the hon’ble High Court of Punjab and Haryana

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Court directed the Revenue for refund of tax paid by assessee with interest on the ground that the Disability pension was held to be exempt by the CBDT itself.
6.6 In the appeal under consideration, the only moot issue to be decided is whether the authorities below could pass rectification order ignoring the time limitation provided in the statute u/s 154(7) or not? In view of the position of law emerging from the cited decisions (supra) on interpretation of the provisions of section 154(7) and the wordings therein making it mandatory, action of the AO in rejecting the application for allowing TDS credit u/s 154 of the Act beyond the period of 4 years from the end of the relevant financial year is absolutely in accordance with the provisions of the Act. The assessee having failed in its legal obligation to move an application within the timeframe of 4
years cannot take recourse to the provisions howsoever its claim might have merits. The authorities could not have gone beyond the provisions contained in the statute, in entertaining its belated claim which was not in consonance with the Act.
7. To conclude, we are of the considered view that there is no infirmity in the appellate order or the order passed by the ld.AO in rejecting the rectification application of the assessee in view of P a g e | 14
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mandatory provisions of section 154(7) of the Act. It was incumbent on the assessee to move application u/s 154 within the time frame and having delayed the same, it cannot expect the authorities to allow such belated claim in contravention of the provisions of section 154(7).
Accordingly, the order need no interference and is upheld dismissing the ground of appeal in this regard.

Order pronounced in the open court on 14/01/2025. SANDEEP GOSAIN
PRABHASH SHANKAR
(न्याययकसदस्य /JUDICIAL MEMBER)
(लेखाकारसदस्य/ACCOUNTANT MEMBER)

Place: म ुंबई/Mumbai
ददनाुंक /Date 14.01.2025
Lubhna Shaikh / Steno

आदेश की प्रयियलयि अग्रेयिि/Copy of the Order forwarded to :

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सत्यावपि प्रवि ////
आदेशानुसार/ BY ORDER,

उि/सहायक िंजीकार (Dy./Asstt.