2025 (2) TMI 1147 - HC - Income Tax

Rectification u/s 254 beyond period of limitation - rectification application must be filed within six months from the date of knowledge of the order sought to be rectified - HELD THAT - Even according to the Petitioner the limitation period expired on 31 May 2022 i.e. beyond the period between 15 March 2020 and 28 February 2022. The Petitioner s contention that the limitation in this matter would commence only from 01 March 2022 cannot be accepted. This is not what the order which the Petitioner relies upon says. Therefore even though the plea based on the order of the Hon ble Supreme Court was never raised by the Petitioner before the ITAT still upon consideration of the same we find that the same would not assist the Petitioner in the facts of the present case. Insofar as the second contention is concerned the issue of sufficient cause is not quite relevant. Section 254 of the IT Act does not contain any provision that enables the ITAT to condone a delay beyond 6 months. This is so held by the coordinate bench in Ram Baburao Salve 2024 (9) TMI 1127 - BOMBAY HIGH COURT Given the above position sufficient cause if any would be irrelevant. The ITAT has also not gone into the issue of sufficient cause but by relying on the decision of Re. Karuturi Global Ltd. 2019 (7) TMI 939 - KARNATAKA HIGH COURT held that it has no power to condone the delay in entertaining an application under Section 254 (2) of the IT Act. Since the ITAT s view aligns with that of our coordinate bench in Ram Baburao Salve (supra) and the decision of Re. Karuturi Global Ltd. (supra) we see no good ground to interfere with the impugned order.

Summary

ISSUES PRESENTED and CONSIDERED1. Whether the delay in filing the Miscellaneous Application by the Petitioner before the Income Tax Appellate Tribunal (ITAT) was condonable under Section 254(2) of the Income Tax Act, 1961?2. Whether the Hon'ble Supreme Court's order dated 10 January 2022 concerning the extension of limitation during the COVID period applied to the present case?3. Whether the ITAT had the jurisdiction to condone the delay in filing the Miscellaneous Application beyond the prescribed six-month period under Section 254(2) of the IT Act?ISSUE-WISE DETAILED ANALYSIS1. The Petitioner challenged the impugned order of the ITAT dated 03 November 2023, which dismissed the Miscellaneous Application filed by the Petitioner in ITA No. 1313/MUM/2020 as being barred by limitation. The Petitioner argued that there was no delay in filing the application, or if there was, it should be condoned due to sufficient cause shown. The Respondent contended that the limitation period had expired, and the ITAT had no power to condone the delay beyond six months from the date of knowledge of the order sought to be rectified.2. The Court considered the arguments presented by both parties. The Petitioner relied on the Hon'ble Supreme Court's order dated 10 January 2022, which excluded the period from 15 March 2020 to 28 February 2022 for the purpose of limitation. However, the Court noted that the Petitioner's limitation period expired after this excluded period, rendering the Supreme Court's order inapplicable. The Court also emphasized that Section 254(2) of the IT Act does not provide for the ITAT to condone delays beyond six months.3. The Court referenced precedents such as Ram Baburao Salve Vs. Assessing Officer, Ward (17) (3)(1), Mumbai & Ors 2024 162 taxmann.com 354 (Bombay) and the decision of the Karnataka High Court in Re. Karuturi Global Ltd. Vs. DCIT 2020 116 Taxmann.com 924 (Kar) to support its conclusion that the ITAT lacked the jurisdiction to condone the delay in filing the Miscellaneous Application. The Court found no grounds to interfere with the impugned order based on the legal framework and precedents cited.SIGNIFICANT HOLDINGSThe Court held that the Petitioner's reliance on the Hon'ble Supreme Court's order dated 10 January 2022 was misplaced as the limitation period had expired beyond the excluded period. The Court affirmed that the ITAT did not have the power to condone delays beyond six months as per Section 254(2) of the IT Act. Consequently, the Court dismissed the petition and discharged the Rule without imposing any cost orders.