2009 (1) TMI 306 - AT - Income Tax

Summary

Issues Involved:
1. Maintainability of the appeal filed by the assessee.
2. Jurisdiction of the Tribunal to entertain the appeal.
3. Retrospective application of the amendment to Section 253(1)(c) of the IT Act.
4. Rectification of the Tribunal's order under Section 254(2) of the IT Act.

Issue-wise Analysis:

1. Maintainability of the appeal filed by the assessee:

The appeal was filed by the assessee against the order of the Director of IT (Exemption) rejecting the application for renewal under Section 80G of the IT Act. The Tribunal initially entertained the appeal and decided in favor of the assessee on 22nd September 2006. However, the Revenue filed a miscellaneous application (MA) challenging the maintainability of the appeal, arguing that the right to appeal against such orders was not available prior to the amendment effective from 1st June 2007.

2. Jurisdiction of the Tribunal to entertain the appeal:

The Tribunal's jurisdiction to entertain the appeal was questioned based on the fact that the amendment to Section 253(1)(c) of the IT Act, which allowed appeals against orders under Section 80G, was effective from 1st June 2007. The Tribunal noted that all relevant events, including the filing of the application, the passing of the order by the Director of IT (Exemption), and the filing of the appeal, occurred before the amendment. Therefore, the Tribunal concluded that it lacked jurisdiction to entertain the appeal at the time it was filed and decided.

3. Retrospective application of the amendment to Section 253(1)(c) of the IT Act:

The Tribunal addressed the argument that the amendment to Section 253(1)(c) should be applied retrospectively. It held that the right to appeal is a substantive right and amendments affecting substantive rights are generally prospective unless explicitly stated otherwise. The Tribunal found no indication that the amendment was intended to apply retrospectively. Consequently, the Tribunal concluded that the amendment did not confer jurisdiction to entertain appeals filed before its effective date.

4. Rectification of the Tribunal's order under Section 254(2) of the IT Act:

The Tribunal considered whether it could rectify its previous order under Section 254(2), which allows for the rectification of mistakes apparent from the record. The Tribunal emphasized that an order passed without jurisdiction is null and void. Since the Tribunal lacked jurisdiction to entertain the appeal at the time it was filed, the original order was deemed a nullity. The Tribunal cited relevant legal principles and precedents to support its conclusion that an order passed without jurisdiction must be quashed. The Tribunal also referenced the Supreme Court's decision in Honda Siel Power Products Ltd. vs. CIT, which underscored the duty of the Tribunal to rectify its mistakes to prevent prejudice to any party.

Conclusion:

The Tribunal allowed the Revenue's miscellaneous application, concluding that the original order passed on 22nd September 2006 was without jurisdiction and thus null and void. The Tribunal rectified its mistake by recalling and quashing the order, emphasizing the need to ensure that no party suffers due to a legal error committed by the Tribunal.