2018 (8) TMI 1261 - HC - Income Tax

Levy of penalty u/s 271 - validity of notice issued u/s 274 - The notice sent in a printed form without mentioning the grounds - ITAT dismissed the appeal on the ground of delay - Held that - the petitioner has made out a case that his case falls under exceptional category for exercising power under Articles 226 and 227 of the Constitution of India to interfere with the order passed by the Tribunal dismissing the Misc. Petition only on the ground of delay. In view of the aforesaid reasons, the writ petition is allowed. The impugned order passed by the Income Tax Appellate Tribunal dismissing the Misc. Petition on the ground of delay is hereby quashed. - ITAT directed to decide the issue on merit.

Summary

Issues:
Challenge to order of Income Tax Appellate Tribunal dismissing Misc. Petition as barred by limitation.

Analysis:
The petitioner challenged the order of the Income Tax Appellate Tribunal dismissing the Misc. Petition as barred by limitation. The petitioner contended that the Tribunal should have considered the petition on merits rather than dismissing it solely on technical grounds. The petitioner relied on the legal precedent set by the Division Bench of the Court in a specific case regarding the necessity of mentioning grounds in notices under certain sections of the Income Tax Act. The respondent, on the other hand, justified the dismissal based on the limitation period specified in Section 254(2) of the Act. The respondent argued that the Tribunal lacked jurisdiction to entertain the petition filed after the prescribed time limit.

The Court analyzed the facts and arguments presented by both parties. It noted that the petitioner filed the Misc. Petition seeking a review of the Tribunal's order mainly due to a misunderstanding regarding the relief granted. The Tribunal had dismissed the petition primarily on the grounds of exceeding the limitation period, which was 6 months as per Section 254(2) of the Act. The Court acknowledged the delay of 11 months and 17 days but considered the explanation provided by the petitioner. The Court emphasized the need to ensure substantial justice and referred to a previous decision where delay was condoned to prevent injustice. The Court highlighted its power under Articles 226 and 227 of the Constitution to intervene in exceptional cases where there is a failure of justice or excess of jurisdiction.

Based on the analysis, the Court found that the petitioner's case fell under the exceptional category warranting intervention. The Court referred to a specific case precedent where it was held that in cases of gross injustice or failure of justice, the Court could interfere with the orders of the original or appellate authority. Consequently, the Court allowed the writ petition, quashed the Tribunal's order dismissing the Misc. Petition, condoned the delay in filing, and remanded the matter back to the Income Tax Appellate Tribunal for a decision on merits in line with the legal observations provided by the Division Bench of the Court in the referenced case.

This detailed analysis of the judgment showcases the legal arguments, statutory provisions, case precedents, and the Court's reasoning leading to the decision to allow the writ petition and remand the matter for further consideration.