2015 (4) TMI 1263 - HC - Income Tax

Rectification petition u/s 254 - AO rejected the claim of refund, as the return was filed belatedly, but advised the assessee to file a petition under Section 119(2)(b) for condonation of delay and to seek refund - CIT(A) dismissed the appeal holding that the order passed by the AO is not under Section 237 - Tribunal allowed the appeal filed by the assessee holding that the communication from the AO amounted to an order under Section 237 - HELD THAT - Tribunal, on merits, had come to the conclusion that the order passed by the Assessing Officer is one within the provisions of Section 237 of the Income Tax Act. When the Tribunal had arrived at such a finding, it is not open to the Revenue to file a Miscellaneous Petition challenging the said finding in the guise of rectification of the order. The Revenue has a remedy of appeal as against the findings of the Tribunal. Without resorting to such a remedy, the Revenue has filed the Miscellaneous Petition. In the light of the above, we see no reason to interfere with the order of the Tribunal. - Decided against revenue

Summary

Issues:
1. Whether the Income Tax Appellate Tribunal was right in dismissing the Miscellaneous Petition filed by the Department without examining the merits and legal position of the case?

Analysis:
The case involves an appeal by the Revenue against the order of the Income Tax Appellate Tribunal. The assessee, a registered firm, filed a return of income for the assessment year 1983-84, claiming a refund of advance tax. The Assessing Officer rejected the refund claim due to a belated filing of the return, advising the assessee to file a petition for condonation of delay. The Commissioner of Income Tax (Appeals) dismissed the appeal, stating that the Assessing Officer's order was not under Section 237 of the Income Tax Act, hence not appealable. The Income Tax Appellate Tribunal allowed the appeal, considering the communication from the Assessing Officer as an order under Section 237. The Revenue filed a Miscellaneous Petition seeking rectification, which the Tribunal dismissed, emphasizing that rectification can only correct errors apparent on the face of the record and not reverse orders. The High Court noted that the Tribunal's power of rectification aims to prevent prejudice caused by its mistakes and found no reason to interfere with the Tribunal's order.

The Tribunal's decision was based on the understanding that the Department's grievance could be addressed through an appeal, thus precluding the need for rectification under Section 254(2) of the Income Tax Act. The High Court highlighted that the Tribunal can rectify errors on the face of the record to prevent prejudice to the parties involved due to mistakes or omissions. In this case, the Tribunal had already determined that the Assessing Officer's order fell under Section 237, making it inappropriate for the Revenue to challenge this finding through a Miscellaneous Petition. The High Court emphasized that the Revenue had the option to appeal the Tribunal's findings instead of filing a rectification petition, ultimately dismissing the appeal and granting the Revenue the liberty to pursue the appeal through proper channels if desired.