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IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Shakdher, Tara Vitasta Ganju, JJ.
Cement Corporation of India Ltd. – Appellant
Versus
Assistant Commissioner Income Tax Circle 5(2), New Delhi – Respondent
W.P.(C) 1486 of 2023
Decided On : 06-02-2023
Rule 24 - Income Tax - ITAT Rules - Rule 24 of the ITAT Rules, Section 254 of the Act - The court discussed the provisions of Rule 24 of the ITAT Rules and Section 254 of the Act in the context of recalling an order. The court highlighted the limitations prescribed under Section 254 and the powers of the Tribunal under Rule 24, emphasizing the need for a hearing on merits.
Fact of the Case:
The writ petition challenged the order of the Income Tax Appellate Tribunal dismissing a miscellaneous application for recalling an order due to non-prosecution of the appeal. The petitioner sought a recall of the order on the grounds of delay and reasons for non-appearance.
Finding of the Court:
The court found that the application for recall was not strictly for rectifying a mistake apparent from the record, and the Tribunal should have considered Rule 24 of the ITAT Rules instead of Section 254 of the Act. The court also noted the denial of depreciation allowance to the petitioner and the reasons provided for the delay in filing the miscellaneous application.
Issues: The issues involved the interpretation of the provisions of Rule 24 of the ITAT Rules and Section 254 of the Act, the denial of depreciation allowance, and the reasons for the delay in filing the miscellaneous application.
Ratio Decidendi: The court held that the application for recall was not within the scope of Section 254 and should have been considered under Rule 24 of the ITAT Rules. The court also emphasized the need for a hearing on merits due to the denial of depreciation allowance and the reasons for the delay.
Final Decision: The impugned order was set aside, and the matter was remitted to the Tribunal for disposal of the petitioner's statutory appeal on merits.
JUDGMENT
Physical Hearing/Hybrid Hearing (as per request)]
Rajiv Shakdher, J. (Oral)
CM APPL. 5567/2023
1. Allowed, subject to just exceptions.
W.P.(C) 1486/2023
2. Issue notice.
2.1. Mr Sanjay Kumar, learned senior standing counsel, who appears on behalf of the respondent/revenue, accepts notice.
3. Since the matter involves the construction of Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963 [in short, "ITAT Rules"], Mr Kumar says that counter-affidavit would not be necessary. Thus, with the consent of counsel for the parties, the writ petition is taken up for hearing and final disposal, at this stage, itself.
4. This writ petition seeks to lay a challenge to the order dated 07.09.2022 passed by the Income Tax Appellate Tribunal [in short, "Tribunal"].
4.1. Via the said order, the Tribunal has dismissed the Miscellaneous Application bearing no. 606/DEL/2018, whereby a prayer was made for recalling the order dated 24.01.2018 passed by the Tribunal.
4.2. The Tribunal, on 24.01.2018, dismissed the appeal preferred by the petitioner, on the ground of non-prosecution.
4.3. A perusal of the said order shows that the Tribunal noted that the petitioner had been served, and thus, no purpose would be served in issuing a fresh notice.
4.4. In the very same order i.e., the order dated 24.01.2018, the Tribunal also observes, that it would treat the appeal as not being admitted, and in this regard, the Tribunal has taken recourse to Rule 19 of the ITAT Rules.
5. It is the petitioner's assertion that the order dated 24.01.2018 was received by it on 05.02.2018. The petitioner also avers that the aforementioned miscellaneous application was filed on 24.09.2018; which, as noticed, was dismissed on 07.09.2022.
6. The reasoning of the Tribunal for rejecting the miscellaneous application is contained in paragraph 4 of the impugned order i.e., the order dated 07.09.2022.
6.1. For the sake of convenience, the same is extracted hereafter:
"4. We have heard the rival submissions and perused the records before us. From the record placed before us it is noticed that these Misc. applications were filed on 24.09.2018. The provisions of sub section (2) of section 254 stipulates the time limit for disposal of Misc. application filed at any time within 6 months from the end of the month.
in which the order was passed by the Tribunal under section 254(1) of the Act. It is noticed that the Tribunal had passed the order under section 254(1) of the Act on 24.01.2018 meaning thereby any Misc. application filed under section 254(2) of the Act with a view to rectify any mistake apparent from record is to be disposed of at any time within 6 months
from the end of the month in which the order was passed i.e. before 31.07.2018. In the case of the assessee the Misc. applications were filed on 24th September, 2018 which is beyond the period of 6 months for disposal of the Misc. applications set out in the provisions of section 254(2) meaning thereby the Misc. applications should have been filed before 31st July, 2018. The assessee filed petition requesting for condonation of delay in filing Misc. applications. However, nowhere in the statute provides for condonation of delay in filing Misc. applications before the Tribunal under section 254(2) of the Act. Condonation of
delay in filing Misc. applications by the Tribunal is beyond the powers of the Tribunal in the absence of any specific provision in the statute. In the circumstances the Misc. applications filed by the assessee are liable to be rejected."
7. As would be evident, the Tribunal seems to have taken recourse to the provisions of Section 254 of the Act. The Tribunal has alluded to the fact that since rectification of mistake, apparent from the record, can be made within six months from the end of the month in which the concerned order was passed, the petitioner's application for recall of the order dated 24.01.2018 could not have been entertained.
7.1. In this context, the Tribunal has fixed two poi
The main legal point established is that the Tribunal should consider the appropriate provisions, such as Rule 24 of the ITAT Rules, when dealing with applications for recalling orders, and the need ....
The court affirmed the power of the Tribunal to rectify its mistake and recall the order under the relevant provisions of the Income Tax Act and the Tribunal Rules.
The ITAT's dismissal of an appeal for non-prosecution instead of on merits and refusal to restore the same, despite applications by the petitioner, was violative of Rule 24 of the Income Tax (Appella....
Dismissal of an appeal by the ITAT for non-prosecution without adjudicating on merits is void; limitation amendments under Section 254(2) do not apply to applications for restoration under Rule 24 of....
The court upheld the Tribunal's decision to recall its order based on the respondent/assessee's claim of not receiving the notice of hearing and emphasized the requirement for parties to move the for....
Powers under Section 254(2) of Income Tax Act, 1961 are only to correct and/or rectify mistake apparent from record and not beyond that.
The ITAT lacks jurisdiction to condone delay in filing a rectification application beyond six months as per Section 254(2) of the Income Tax Act, 1961.
The Tribunal erred by misapplying delay standards and procedural provisions, failing to recognize sufficient cause under Section 253(5) for the petitioner’s late cross-objection.
The absence of substantial question of law can lead to the closure of appeals.
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