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2023 (10) TMI 281 - HC - Income TaxRectification Application dismissed in view of the bar of limitation prescribed u/s 254 (2) - HELD THAT - As decided in Cement Corporation of India Limited 2023 (2) TMI 925 - DELHI HIGH COURT consider a similar order passed by the Tribunal invoking the limitation as prescribed under section 254 (2) while deciding the application for recall of an order. The Delhi High Court after considering the provisions of section 254(2) of the Income Tax (Appellate Tribunal) Rules discussed the provisions and decided that the application for recall is to be decided in terms of the provisions contained in Rule 24 of the Rules and reliance upon Section 254 was misplaced. No reason to disagree with the said judgment as in the present case also, the application moved by the petitioner, in its tenor was traceable to the provisions of Rule 24 of the Income Tax (Appellate Tribunal) Rules and the petitioner never sought rectification of the said order. A mere wrong mention in the title of the application, that too on the basis of the observations made by the Tribunal itself cannot be construed against the petitioner and cannot wipe away the scope of application under Rule 24 of the Income Tax (Appellate Tribunal Rules). The order impugned dated 21.06.2023 is clearly unsustainable and is quashed. The matter is remanded to the Income Tax Appellate Tribunal to pass a fresh order in the light of the provisions contained under Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963 in accordance with law.
Issues:
The judgment deals with the dismissal of a recall application by the Income Tax Appellate Tribunal based on the grounds of limitation prescribed under section 254(2) of the Income Tax Act, 1961 and the provisions of Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963. Summary: Issue 1: Dismissal of recall application based on limitation grounds The petitioner challenged the order dismissing their appeal for non-prosecution by filing a recall application. The application was dismissed on the grounds of being beyond the limitation prescribed under section 254(2) of the Income Tax Act, despite being filed under Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963. The petitioner argued that the mention of Section 254 in the application was due to the Tribunal's observations and that the recall application should have been considered under Rule 24. The respondent contended that the application was rightly dismissed based on the bar of limitation under section 254(2) of the Income Tax Act. Issue 2: Interpretation of Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963 The counsel for the petitioner highlighted Rule 24, which provides for the hearing of an appeal ex-parte and the subsequent setting aside of the ex-parte order if sufficient cause is shown for non-appearance. It was argued that since Rule 24 specifically addresses the procedure for recalling an order, the mention of Section 254 in the impugned order was incorrect. The petitioner relied on a judgment by the Delhi High Court that emphasized the application of Rule 24 over Section 254 for recalling orders. Judgment: The Hon'ble Judge agreed with the petitioner's arguments, stating that the application should have been considered under Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963, and not under Section 254 of the Income Tax Act. The Judge found the order dismissing the recall application unsustainable and quashed it. The matter was remanded to the Income Tax Appellate Tribunal to pass a fresh order in accordance with Rule 24. The judgment was based on the interpretation of the relevant rules and the Delhi High Court's decision in a similar case. The writ petition was disposed of with these observations.
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