2015 (2) TMI 815 - HC - Income Tax

Claim of Refund - Condonation of delay in filing of return u/s 139(1) - CIT rejected the petitioner's application under section 119(2) - Tribunal earlier rejected the appeal of the assessee but later modified its order and allowed the appeal against rectification application - Held that - In the present writ petition we would not like to interfere for the primary reason that the question involved is of sum as small ₹ 16,000 claimed by way of refund by a retrenched/retired workman. His application for delay condonation was considered on incorrect factual premises. Had he against the order passed by the Commissioner on his application under section 119(2)(b) of the Act approached before this court, we would have in all probabilities directed the Commissioner to take a fresh decision. Considering these facts arising from the record, we refuse to exercise our discretionary writ jurisdiction. Whether order of CIT u/s 119(2)(b) is appealable - correction of ITAT order - Held that - Tribunal was correct in first order holding that the Commissioner's order under section 119(2)(b) was not appealable before the Tribunal and that, therefore, such order did not call for rectification. The Tribunal referring to and relying on the same judgment of the respondent could not have repeated the same error in law. - We, therefore, expect the Tribunal not to repeat such mistakes in future whenever similar applications come up for consideration

Issues Involved:
1. Delay in filing the income tax return.
2. Application for condonation of delay under section 119(2) of the Income-tax Act.
3. Rejection of the application by the Commissioner.
4. Appeal to the Income-tax Appellate Tribunal.
5. Tribunal's exercise of rectification powers.
6. Jurisdiction and maintainability of the Tribunal's order.
7. High Court's discretionary writ jurisdiction.

Detailed Analysis:

1. Delay in Filing the Income Tax Return:
The respondent-assessee, a workman, filed his income tax return for the assessment year 2001-02 on November 17, 2003, which was beyond the time limit specified under section 139(1) of the Income-tax Act, 1961. He claimed a refund of Rs. 16,589 in this return.

2. Application for Condonation of Delay Under Section 119(2):
Simultaneously, the assessee filed an application under section 119(2) of the Act before the Commissioner seeking condonation of the delay in filing the return. This application, along with the refund claim, remained pending for several years, prompting the assessee to send a reminder on August 29, 2008.

3. Rejection of the Application by the Commissioner:
The Commissioner finally passed an order on February 21, 2009, rejecting the application for condonation of delay. The Commissioner observed that ignorance of the law was not a valid excuse and no genuine hardship was demonstrated.

4. Appeal to the Income-tax Appellate Tribunal:
The respondent approached the Income-tax Ombudsman, who upheld the Commissioner's order but disapproved of the Commissioner's aggressive language and incorrect analysis in his response. Subsequently, the respondent filed an appeal before the Income-tax Appellate Tribunal. The Tribunal dismissed the appeal on May 15, 2012, holding that the order under section 119(2)(b) was an administrative order and not appealable.

5. Tribunal's Exercise of Rectification Powers:
The respondent filed a rectification application before the Tribunal. The Tribunal, referring to a similar case, allowed the rectification application in part, directing the Commissioner to reconsider the case afresh after giving the assessee a proper hearing.

6. Jurisdiction and Maintainability of the Tribunal's Order:
The Department challenged the Tribunal's order in the High Court. The High Court noted that the Tribunal had erred in exercising rectification powers to direct the Commissioner to pass a fresh order. The Tribunal's original order had held that the appeal was not maintainable, and thus, the rectification order nullifying the Commissioner's original order was beyond its jurisdiction.

7. High Court's Discretionary Writ Jurisdiction:
Despite recognizing the Tribunal's legal error, the High Court refused to entertain the petition, emphasizing the small sum involved and the advanced age and poor means of the respondent. The High Court highlighted the importance of exercising discretionary writ jurisdiction judiciously and the principles of natural justice. The High Court dismissed the petition, expecting the Tribunal to avoid similar mistakes in future cases and forwarded a copy of the order to the Income-tax Appellate Tribunal's Registry at Ahmedabad.

Conclusion:
The High Court's judgment addressed the issues of delay in filing tax returns, the rejection of condonation applications, and the jurisdictional limits of the Income-tax Appellate Tribunal. The court emphasized the need for judicious use of discretionary writ jurisdiction, especially in cases involving small sums and vulnerable individuals.

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