2015 (9) TMI 141 - HC - Income Tax

Miscellaneous Application seeking to recall the order - whether the order of the ITAT is correct in law in rejecting the miscellaneous application filed by the Department holding that it is barred by limitation? - Tribunal, while dismissing it held that the Department could not prosecute the same without obtaining sanction from the Committee on Disputes (C.O.D) of the Central Government which was held to be mandatory at the relevant point of time - Held that - there is a total lapse on the part of the appellant in prosecuting the appeal diligently, and in normal circumstances, the appellant ought to have approached the C.O.D immediately after 30.04.2007. Even after the appellant was made aware of the requirement by 30.09.2010 by the Tribunal, no application was made by him before the C.O.D. In other words, there was never any effort made by the appellant in seriously desiring to prosecute the appeal against the order dated 30.04.2007 passed by the Commissioner. These factors were taken into consideration by the Tribunal while refusing to recall the order dated 30.09.2010. Hence, we do not find any infirmity in the order passed by the Tribunal to interfere with. Even assuming for arguments sake, it is only on account of the law declared by the Apex Court in Electronics Corp. of India v. Union of India & Ors (2011 (2) TMI 3 - Supreme Court), dispensing with the requirement of obtaining C.O.D. is taken as starting point, the application made is belated. Further, even on the ground of the absence of diligence shown in approaching the Tribunal to recall the order, we do not find any error in the order of the Tribunal. - Decided in favour of assessee.

Summary

Issues:
Appeal under Section 260-A of the Income Tax Act, 1961 regarding the assessment year 2001-2002; Departmental appeal dismissed for lack of sanction from Committee on Disputes (C.O.D); Assessee's appeal allowed by the Tribunal; Miscellaneous Application filed seeking to recall the order; Question of law regarding rejection of the miscellaneous application on grounds of limitation and lack of diligence.

Analysis:
The High Court of Andhra Pradesh heard an appeal under Section 260-A of the Income Tax Act, 1961, concerning the assessment year 2001-2002. Both the Department and the assessee had filed appeals before the Tribunal. The Department's appeal was dismissed by the Tribunal due to the lack of sanction from the Committee on Disputes (C.O.D), as mandated by a Supreme Court judgment. The Tribunal allowed the assessee's appeal. Subsequently, a Miscellaneous Application (M.A.) was filed by the appellant seeking to recall the Tribunal's order dated 30.09.2010. The Tribunal dismissed this application on 13.08.2014, leading to the current appeal questioning this decision.

The main issue revolved around whether the Tribunal was correct in rejecting the miscellaneous application as being barred by limitation and lacking diligence. The appellant failed to seek approval from the C.O.D. to prosecute the appeal, as required by the Supreme Court judgment. The appellant only filed the Miscellaneous Application in January 2014, despite being aware of the judgment since 2011, indicating a substantial delay of over three years. The High Court noted the lack of effort by the appellant in diligently pursuing the appeal, especially considering the significant time lapse since the original order. The Tribunal's decision to refuse the recall of the order was upheld by the High Court, emphasizing the importance of certainty in taxation matters and the need to avoid reopening settled issues that could disrupt individuals' financial planning based on previous judgments.

Ultimately, the High Court ruled in favor of the assessee and against the Revenue, deeming the appeal devoid of merits and dismissing it. No costs were awarded, and any pending Miscellaneous Petitions were disposed of as infructuous. The judgment highlighted the significance of timely action, diligence in pursuing legal remedies, and the need for stability and finality in tax matters to ensure predictability and fairness in the system.