1997 (11) TMI 79 - HC - Income Tax

Summary

Issues:
1. Application under s. 256(1) of the IT Act, 1961 barred by time.
2. Application under s. 254(2) of the Act for rectification in the order rejected.
3. Discretionary writ jurisdiction of the High Court in favor of the petitioner.
4. Delay and laches in filing the writ petition.

Analysis:
1. The petitioner sought quashing of the Tribunal's order rejecting the application under s. 256(1) of the IT Act, 1961, as barred by time. The Tribunal dismissed the application as it was filed beyond the period of limitation, calculated from the date of the original order, without any application for condonation of delay from the Department. The High Court noted that the limitation for filing such an application commences from the date of receipt of the order by the CIT, as per precedent. While the Court could have set aside the order and directed the Tribunal to entertain the application, it declined to do so due to the circumstances presented by the respondent, leading to the dismissal of the petition.

2. The petitioner also moved an application under s. 254(2) of the Act seeking rectification in the order dated 7th Nov., 1994. However, this application was rejected on the grounds that s. 254(2) was inapplicable for rectifying an order rejecting an application under s. 256(1) of the Act. The Court emphasized that the Department was not justified in moving the application under s. 254(2) and should have filed a writ petition challenging the rejection of the reference application instead.

3. The discretionary writ jurisdiction of the High Court was considered in favor of the petitioner. The Court highlighted that allowing the writ petition would upset a concluded order of assessment, as subsequent proceedings had already taken place, and a significant amount of time had elapsed since the original order. The Court noted that delay and laches could be grounds for refusing to exercise discretionary writ jurisdiction.

4. The Court ultimately dismissed the petition on the grounds of delay and laches. It pointed out that not only was there a delay in filing the writ petition, but a vested right had also accrued to the respondent due to the finality of the assessment order. The Court cited a similar case to support its decision and emphasized that delay and laches could be valid reasons for refusing to entertain a petition, leading to the dismissal of the case without any order as to costs.