2024 (2) TMI 1390 - HC - Income Tax

Tribunal dismissing the Income Tax Appeal filed by the petitioner for non-prosecution - HELD THAT - The said appeal was dismissed way back on 24.10.2016 by the Tribunal. The petitioner after three years from the date of dismissal of the appeal for non-prosecution filed miscellaneous petition on 9.4.2019 before the Tribunal praying for recalling of order dated 24.10.2016 and requesting the Tribunal to decide the appeal on merits. The said application came to be rejected, vide order dated 23.8.2019 in Ext. P6, on the ground that the Tribunal does not have the power to condone the delay in filing the miscellaneous application, inasmuch as the limitation period for filing miscellaneous application was six months and the application was filed with a delay of more than three years. The petitioner thereafter has approached this Court by filing this writ petition on 19.3.2020. Though it is true that under Rule 24 of the Income Tax (Appellate) Tribunal Rules, 1963, the Tribunal is required to decide the appeal on merits even when the party is not appearing or is not representing. But, considering the facts as narrated above, that the petitioner had committed gross delay and latches in filing the miscellaneous application and thereafter approaching this Court by filing this writ petition, I do not find that the writ petition is maintainable and the same is dismissed.

Summary

Issues involved: Impugning Ext. P4 order passed by the Income Tax Appellate Tribunal for non-prosecution, dismissal of appeal, delay in filing miscellaneous petition, rejection of application for recalling order.

Impugned Order by Tribunal: The petitioner, a private limited company engaged in software development and exports, filed a return of income for the assessment year 2007-08 claiming exemption under Section 10B of the Income Tax Act, 1961. The assessment was re-opened due to a deduction claim under Section 10B based on STP Scheme approval. Despite explanations, the claim was disallowed in the assessment order. Appeals to the first appellate authority and Tribunal were unsuccessful due to non-prosecution by the petitioner.

Delay in Filing Miscellaneous Petition: The petitioner filed a miscellaneous petition three years after the Tribunal's dismissal of the appeal for non-prosecution, seeking to recall the order and decide the appeal on merits. However, the Tribunal rejected the application due to exceeding the six-month limitation period for filing, leading to the petitioner approaching the High Court through a writ petition.

High Court Decision: While Rule 24 mandates the Tribunal to decide the appeal on merits even in the absence of the party, the High Court found the petitioner's significant delay in filing the miscellaneous application and subsequent writ petition as unjustifiable. Consequently, the High Court dismissed the writ petition, deeming it not maintainable.

Conclusion: The High Court's decision to dismiss the writ petition was based on the petitioner's substantial delay in filing the miscellaneous application and approaching the court, despite the Tribunal's requirement to decide the appeal on merits even in the absence of the party.