Wrong Mention Of Section In Title Of Application Can’t Be Held Against Assesee: Allahabad High Court
The Allahabad High Court has held that based on the observations of the Tribunal, if a wrong Section is written in the title of the application, it will not take away the scope/ application of Rule 24 of the Income Tax (Appellate Tribunal) Rules.Petitioner preferred an appeal against order of assessment/penalty before the Commissioner of Income Tax (Appeals) which was dismissed....
The Allahabad High Court has held that based on the observations of the Tribunal, if a wrong Section is written in the title of the application, it will not take away the scope/ application of Rule 24 of the Income Tax (Appellate Tribunal) Rules.
Petitioner preferred an appeal against order of assessment/penalty before the Commissioner of Income Tax (Appeals) which was dismissed. Thereafter, petitioner approached the Income Tax Appellate Tribunal, Lucknow Bench. Due to lack of notice of hearing, the petitioner could not appear before the Tribunal. Consequently, the appeal was dismissed for non-prosecution with an observation that the assessee would be at liberty to move an application under Section 254 (Orders of Appellate Tribunal) of the Income Tax Act, 1961.
Petitioner filed an application with the title “Application under section 254 of the Income Tax Act” which was dismissed on grounds of being beyond limitation period prescribed under Section 254 of the Act.
Counsel for the petitioner contended that the remedy for recalling such order is under Rule 24 (Hearing of Appeal Ex-Parte For Default By the Appellant) of the Rules. However, since it was mentioned in the order that application be moved under Section 254 of the Act, petitioner mentioned Section 254 in the title of the application.
Further, it was argued that reliance on Section 254 of the Act is wholly misplaced as it provides for rectification of an order, whereas Rule 24 of the Rules provides a remedy for recall of an ex-parte order on default by the appellant.
Agreeing with reliance placed by the petitioner on judgment of the Delhi High Court in Cement Corporation of India Limited vs. Assistant Commissioner, Income Tax Circle 5(2) New Delhi, the Court held that application for recall is to be decided in terms of Rule 24 of the Rules and reliance upon Section 254 was misplaced.
A bench comprising of Justice Pankaj Bhatia held
“I do not see any reason to disagree with the said judgment as in the present case also, the application moved by the petitioner, in its tenor was traceable to the provisions of Rule 24 of the Income Tax (Appellate Tribunal) Rules and the petitioner never sought rectification of the said order. A mere wrong mention in the title of the application, that too on the basis of the observations made by the Tribunal itself cannot be construed against the petitioner and cannot wipe away the scope of application under Rule 24 of the Income Tax (Appellate Tribunal Rules).”
Accordingly, the Court while quashing the order, remanded the case back to Income Tax Appellate Tribunal to pass a fresh order keeping in mind Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963.
Case Title: M/S Purnagiri Rice Mill, Shahjahanpur Thru. Authorized Representative Shri Rakesh Kumar Gupta vs. Union Of India Thru. Ministry Of Finance Deptt. Of Revenue, New Delhi And 2 Others [WRIT TAX No. - 197 of 2023]
Case Citation: 2023 LiveLaw (AB) 373