2013 (5) TMI 360 - HC - Income Tax

Rectification appeal against the order of ITAT - Tribunal has in the impugned order done is to require the Commissioner to pass a fresh order. Tribunal was persuaded to do because in the order passed by the Commissioner u/s 119(2)(b) of the Act, he was influenced substantially by the fact that according to him, the return was belated by three years. The respondent pointed out to the Tribunal that such delay was of about one year and three months. The Commissioner had mistakenly taken into account the date of filing of the application u/s 119(2)(b) of the Act. Only to correct the Tribunal s order, respondent cannot be dragged. The man has retired in the year 2000 as a labourer. He is seeking refund of small sum of Rs.33,949/- which for him is very substantial. Only to correct an apparent error committed by the Tribunal, we would not drag him before High Court. Even if we had issued notice and called him before us, we would have been persuaded to replace the Tribunal s order by our order and same direction would have followed. Only to bring about some result in a correct manner, we would be wholly unjustified in asking a man of advanced age and of poor means before us. Response to a High Court notice comes at a considerable cost. In exercise of discretionary writ jurisdiction, we refuse to entertain this petition. This is the beauty of the writ jurisdiction and we would be failing in our duty, if we entertained the petition.

Summary

Issues:
1. Application for regularisation of late income tax return under Section 119(2)(b) of the Income-tax Act, 1961.
2. Rejection of rectification application by the Income-tax Appellate Tribunal.
3. Jurisdiction of the Tribunal to pass orders on rectification application.
4. Condonation of delay in filing income tax return.
5. Validity of the Tribunal's direction to the Commissioner for passing a fresh order.

Analysis:

1. The petitioner, the Commissioner of Income Tax-II, Baroda, filed a petition regarding the regularisation of a late income tax return by the respondent, a retired labourer, for the assessment year 2000-01. The respondent claimed a refund of Rs.33,949, stating that he was unaware of tax laws due to retirement and received compensation under a Voluntary Retirement Scheme. The petitioner rejected the application citing a delay of nearly three years in filing the return, leading to the respondent's appeal before the Income-tax Appellate Tribunal.

2. The Tribunal dismissed the Tax Appeal, stating that the order under Section 119(2)(b) was administrative and not appealable. However, the respondent filed a rectification application, highlighting a discrepancy in the delay period of filing the return. The Tribunal, in its order, directed the Commissioner to reconsider the case, emphasizing the respondent's status as a retired labourer and the need for condonation of delay.

3. The petitioner challenged the Tribunal's order, arguing that the Tribunal lacked jurisdiction to entertain the rectification application and direct the Commissioner to pass a fresh order. The High Court held that the Tribunal's order suffered from a legal defect as it nullified the original order without establishing the appeal's maintainability. The Tribunal's direction to the Commissioner was deemed inappropriate without a clear ruling on the appeal's status.

4. The High Court acknowledged the respondent's unique circumstances as a retired labourer with minimal taxable income who sought a refund withheld for ten years. The Court refrained from calling the respondent to correct the Tribunal's apparent error, considering his advanced age and financial constraints. The Court emphasized the discretionary writ jurisdiction and declined to entertain the petition to avoid burdening the respondent with unnecessary costs.

5. Ultimately, the High Court dismissed the petition, recognizing the respondent's plight and the need to rectify the Tribunal's order without subjecting the retired labourer to additional hardships. The Court highlighted the importance of upholding justice and fairness in such cases, demonstrating the essence of discretionary writ jurisdiction in addressing legal matters.