Appeal to Appellate Tribunal – Rectification of mistake – Application for rectification – Limitation – Starting date for limitation is actual date of receipt of order of Tribunal

Appeal to Appellate Tribunal – Rectification of mistake – Application for rectification – Limitation – Starting date for limitation is actual date of receipt of order of Tribunal

The order of the Tribunal passed on 19th September, 2018 was served on the assessee on 5th December, 2018. On 3rd June, 2019, the assessee filed an application u/s 254(2) for rectification of the said order. The Tribunal held that there was a delay of 66 days in filing the application and declined to entertain it, stating that being a creature of the statute it did not have any power to pass an order u/s 254(2) beyond a period of six months from the end of the month in which the order sought to be rectified was passed.

The Calcutta High Court allowed the appeal filed by the assessee and held as under:

‘i) If section 254(2) is read with sections 254(3) and 268 which provide for exclusion of the time period between the date of the order and the date of service of the order upon the assessee, no hardship or unreasonableness can be found in the scheme of the Act.

ii) The Tribunal was wrong in not applying the exclusion period in computing the period of limitation and rejecting the application of the assessee filed u/s 254(2) as barred by limitation. The order was passed on 19th September, 2018, and the copy of the order was admittedly served upon the assessee on 5th December, 2018. Therefore, the Tribunal should have excluded the time period between 19th September and 5th December, 2018 in computing the period of limitation.

iii) The appeal is, accordingly, allowed. The Tribunal below is directed to hear the application u/s 254(2) taken out by the assessee on the merits and dispose of the same within a period of six weeks from the date of communication of this order.’