2019 (2) TMI 1592 - HC - Income Tax

Application for rectification u/s 254(2) - non consideration of the additional evidence - additional evidences produced before the CIT (Appeals) being rejected without any justification - HELD THAT - The above grievance of the petitioner of non-consideration of the ground of rectification is evident from reading of the impugned order dated 10th August, 2017. This is even not disputed by the Revenue. Thus, there is flaw in the decision making process leading to the impugned order dated 10th august, 2017. Tribunal ought to have dealt with the above issue (urged as ground No.5) in the Miscellaneous Application for rectification and taken a view on it. Therefore, we direct the Tribunal to decide above issue urged as ground No.5 by the petitioner in its rectification application dated 30th November, 2016 and pass an order on the same after following the principles of natural justice.

Summary

Issues:
Challenge to order of Income Tax Appellate Tribunal for rectification under section 254(2) of the Income Tax Act, 1961 regarding additional evidence produced before Commissioner of Income Tax (Appeals) for Assessment Year 2009-10.

Analysis:
The petition under Article 226 challenges the order of the Income Tax Appellate Tribunal dated 10th August, 2017, which dismissed the petitioner's application for rectification under section 254(2) of the Income Tax Act, 1961. The petitioner's grievance was that the order dated 25th May, 2016, in respect of Assessment Year 2009-10, did not address the rejection of additional evidence produced before the Commissioner of Income Tax (Appeals). The petitioner contended that the additional evidence was crucial and would impact the appeal's outcome significantly. The Tribunal failed to address this specific ground in its impugned order, leading to a flaw in the decision-making process.

The High Court observed that the non-consideration of the ground of rectification was evident from the impugned order dated 10th August, 2017, and this flaw was not disputed by the Revenue. The Court held that the Tribunal should have addressed the issue raised as ground No.5 in the rectification application and provided a decision on it. Consequently, the Court directed the Tribunal to consider the issue raised by the petitioner in its rectification application and make a decision on the same while adhering to the principles of natural justice. The petition was allowed in the aforementioned terms, with no order as to costs.

In conclusion, the High Court's judgment focused on the failure of the Tribunal to address the petitioner's specific grievance regarding the rejection of additional evidence in the rectification application. The Court emphasized the importance of considering all grounds raised by the petitioner and directed the Tribunal to reevaluate the issue and provide a decision following the principles of natural justice.