2016 (3) TMI 973 - HC - Income Tax

Rectification of mistake - grievance of the Petitioner is that the impugned order does not consider various issues raised by the petitioner in its rectification application - Held that - We find that the impugned order passed by the Tribunal clearly exhibits a flaw in the decision making process. There is no mention in the impugned order as to what was the basis for revising the grounds of appeal filed by the Revenue in rectification application filed by the Petitioner. The Tribunal was concerned only with regards to the Petitioner s application for rectification. Thus, the Petitioner was not given any opportunity to deal with the revised grounds of appeal and it is not clear as to whether the revised grounds of appeal were at all filed by the Revenue. Nothing has been placed by the Revenue on record that any application has been filed by them, seeking revision of its grounds of appeal before or after the order dated 17.4.2015.

Summary

Issues:
Challenge to order under Section 254(2) of the Income-tax Act, 1961 by the Income-tax Appellate Tribunal for the assessment year 2009-2010. Revision of grounds of appeal by the Tribunal without notice to the Petitioner. Flaw in decision-making process by the Tribunal.

Analysis:

1. The Petitioner challenged the order dated 6.1.2016 passed by the Income-tax Appellate Tribunal under Section 254(2) of the Income-tax Act, 1961. The order rejected the Petitioner's application for rectification of the order dated 17.4.2015 for the assessment year 2009-2010. The Petitioner contended that the impugned order did not address various issues raised in the rectification application and revised the grounds of appeal of the Revenue without notifying the Petitioner.

2. The Tribunal's order dated 17.4.2015 was based on the grounds of appeal filed by the Revenue before it. However, the impugned order incorporated fresh grounds of appeal in the Revenue's appeal without informing the Petitioner. The Petitioner raised concerns about not being given an opportunity to address the revised grounds of appeal and questioned the basis for revising these grounds without any application from the Revenue.

3. The High Court observed a flaw in the decision-making process of the Tribunal. The impugned order failed to provide any justification for revising the grounds of appeal in the Revenue's application for rectification. The Court noted that the Tribunal's focus was solely on the Petitioner's rectification application, neglecting the due process and the Petitioner's right to respond to the revised grounds of appeal.

4. Consequently, the High Court set aside the impugned order of the Tribunal dated 6.1.2016 and directed the restoration of the Petitioner's Miscellaneous Application for fresh disposal in accordance with the law. The Court emphasized the importance of procedural fairness and the right of the parties to be heard on all relevant issues. The petition was disposed of with no order as to costs.