2023 (4) TMI 340 - HC - Income Tax

Rectification of the Assessment Order u/s 143A - whether application for rectification had been filed beyond the period of limitation ? - action for reflection of the TDS deducted against the new PAN Number obtained by the petitioner - Application for granting permission u/s 119(2)(b) - issuance of new pan - TDS deductions not reflected in Form 26AS - Petitioner seeking to rectify its Income Tax return qua the TDS now being reflected under the correct PAN - Income Tax Authorities have also reflected the TDS amount of old PAN against the new PAN Number of the petitioner, as an Association of Persons - petitioner seeking condonation of delay beyond the period of six years from the end of the Assessment Year - HELD THAT - When Section 119(2)(b) of the Income Tax Act authorizes the Board to issue instructions, directions or orders to the Income Tax Authorities to admit an application, or claim for any exemption, deduction, refund, or any other relief under the Act after the expiry of the period of limitation specified by or under the Act, along with the said power goes the power to prescribe the conditions, upon which such delayed applications may be entertained. Since the petitioner sought condonation of delay by resort of the very same Circular No. 9/2015, the petitioner has to accept the conditions prescribed in the said circular for entertainment of application seeking condonation of delay. Therefore, it is not correct for the petitioner to contend that the Board has no power to lay down an outer-limit of limitation, during which period an application for condonation of delay may be entertained. Rectification application could be filed by the petitioner within four years of the expiry of the Assessment Year. Admittedly, the petitioner did not do so. By resorting to Clause 3 of Circular No. 9/2015, the petitioner could have sought condonation of delay, in moving the rectification application by another two years. The petitioner did not file the rectification application either within the period of limitation, or even within the period for which the delay could be condoned, i.e. up to six years. The petitioner moved the rectification application only in the year 2021, i.e. after over 12 years. It is well settled that, with the expiry of limitation, the law bars the remedy even if the right is not extinguished. Therefore, the right of the petitioner, to avail of the remedy of rectification, stood barred by the law of limitation. The petitioner has only itself to blame for not availing of the remedy available to it within the period of limitation, or even within the period during which the application for condonation of delay could be entertained.

Summary

Issues:
The issues involved in the judgment are the petitioner seeking relief for the credit of Tax Deducted at Source (TDS) under an incorrect PAN, quashing of orders related to TDS, rectification of Income Tax return, challenging time limits, and grievances filed.

Relief Sought - Tax Deducted at Source (TDS) Credit:
The petitioner sought a writ to allow credit of TDS amounting to Rs. 14,61,201/- deducted under an incorrect PAN, now reflecting under the correct PAN after revision of the TDS statement by the Executive Engineer. The petitioner contended that due to an error in PAN issuance, TDS was not reflected in the new PAN, causing discrepancies.

Rectification of Income Tax Return:
The petitioner requested a writ to rectify its Income Tax return regarding the TDS amount now reflecting under the correct PAN. The petitioner highlighted issues with the application for rectification not being entertained due to filing beyond the limitation period, leading to challenges in rectifying the Assessment Order.

Challenging Time Limits and Circulars:
The petitioner sought writs to quash orders related to TDS, including the time limit of six years mentioned in Circular No. 09/2015. The petitioner contested that the circular's time limit exceeded the statutory power of the Board, causing hardship by locking up working capital.

Analysis and Decision:
The Court considered the petitioner's submissions but found no merit in the arguments. It was noted that the petitioner did not file the rectification application within the limitation period or even within the condonable delay period. As the rectification application was filed after over 12 years, the right to avail of the remedy stood barred by the law of limitation. The Court emphasized that the petitioner had missed the opportunity to rectify within the specified timelines, leading to the dismissal of the Writ Petition.

Conclusion:
The Writ Petition was dismissed, and pending applications were disposed of accordingly. The Court held that the petitioner's failure to adhere to the limitation period for filing the rectification application resulted in the remedy being barred by law, despite the right not being extinguished.