2015 (8) TMI 1211 - HC - Income Tax

Validity of assessment proceedings under Section 143 (3) read with Section 158BC - satisfaction had not been recorded during the course of assessment proceedings in respect of the person searched i.e. SAPL - rectification of mistake - Held that - It was on recall application filed by the Revenue to recall the order dated 14th March, 2012 that the Tribunal realized that the proceedings in respect of the person searched i.e. SAPL has been completed on 28th February 2005 while the notice to the Petitioner was issued on 20th April 2004 i.e. during the pendency of the Assessment proceedings of SAPL. It was in that view that the Tribunal proceeded to hold that it had committed a mistake in as much as it had given a finding of the impugned satisfaction not being recorded during the course of proceeding of SAPL without ascertaining the date of completion of proceedings in respect of SAPL. The observations made by the Tribunal that the issue raised by the Revenue would amount to review during the course of hearing of the Revenue s application of recall of the order dated 14th March 2012 has to be seen in the light of the further observations of the Tribunal in the order dated 30th August, 2013 that it had committed a mistake and therefore exdebito justice, it was obliged to correct a mistake in having proceeded on fundamentally incorrect basis. The issue does not stand concluded by virtue of the order of recall dated 30th August 2013. This would only enable the parties to putforth their views on correct facts. There is basis for the Tribunal to recall it s order dated 14th March 2012 as it does appear that the Tribunal had proceeded on a factual erroneous basis. We do not see what prejudice is being caused to the Petitioner in attending hearing before the Tribunal and arguing the matter on merits. The Tribunal has withdrawn it s order dated 14th March 2012 as stated in it s order dated 30th August 2013 for a mistake committed by it while passing order dated 14th March 2012. One more fact which cannot be lost sight of is that the period to file an appeal from the order dated 14th March, 2012 to this Court under Section 260A of the Act has long expired. Thus allowing the Petition at this late stage in the present facts may lead to injustice as it would revive the order dated 14th March, 2012 against which an appeal would be time barred. This of course, is not the basis for rejecting the Petition which we have dismissed on merits. However, this delay is just one more factor not to exercise our extra ordinary jurisdiction of writs.

Summary

Issues:
Challenge to orders passed by Income Tax Appellate Tribunal under Article 226 of the Constitution of India - Validity of assessment under Section 158BC read with Section 158BD - Rectification/recall of Tribunal orders - Jurisdictional error in Tribunal's orders - Petitioner's application for recall of Tribunal orders - Review of Tribunal's earlier orders - Consequences of recalling Tribunal orders - Time-barred appeal under Section 260A of the Act.

Analysis:
The High Court of Bombay dealt with a petition challenging orders issued by the Income Tax Appellate Tribunal. The case involved the assessment of the Petitioner for the Block Period from 01.04.1996 to 18.02.2003 by the Assessing Officer. The Commissioner of Income Tax upheld the assessment, leading to an appeal before the Tribunal. The Petitioner contended that the jurisdiction to assess under Section 158BC read with Section 158BD was not validly exercised. The Tribunal's original order dated 14th March 2012 was based on the satisfaction not being recorded during the assessment proceedings of the person searched, leading to the notice issued to the Petitioner being deemed null and void.

Subsequently, the Revenue filed a rectification application before the Tribunal, which was allowed on 30th August 2013. The Tribunal recalled its earlier order, citing a factual misunderstanding regarding the completion of proceedings in the case of the person searched. The Petitioner then filed an application to recall the Tribunal's order dated 30th August 2013, arguing that the basis for the recall was not valid. However, the Tribunal rejected this application on 14th January 2015.

The Court noted that the Tribunal had proceeded on a factually erroneous basis in its orders. While the issue was not conclusively resolved by the order of recall dated 30th August 2013, the Tribunal had withdrawn its original order due to a mistake committed. The Court emphasized that the Petitioner could still argue the matter on merits before the Tribunal, despite the time-barred appeal under Section 260A of the Act. The Court ultimately dismissed the petition, highlighting the potential injustice of reviving the time-barred order dated 14th March 2012.

In conclusion, the Court declined to entertain the petition but clarified that its decision did not imply agreement with the strong personal observations made in the Tribunal's order dated 30th August 2013 regarding the conduct of the Advocate. The petition was dismissed with no order as to costs.