2013 (5) TMI 218 - AT - Income Tax

Tribunal dismisses late application under Income Tax Act, emphasizing statutory limitations.

The Tribunal held that the Miscellaneous Application filed by the assessee after four years was barred by limitation under Section 254(2) of the Income ... Miscellaneous Application filed after the expiry of four years - Maintainability on ground of limitation - Held that:- The limitation for filing of application under order (9) Rule (9) of CPC for setting aside the exparte order is 30 days. The assessee has neither filed any application for condonation of delay nor explained the cause of such inordinate delay of more than 4 years. In the affidavit, the assessee has not explained the cause and period of delay in filing the present Miscellaneous Application. Further, this is not a case of non receipt of the impugned order or having no knowledge about the impugned exparte order. As it is clear from the averments made in the application as well as in the affidavits that the applicant came to know about the exparte order on 4.12.2007 itself and thereafter also in receipt of the impugned order. In these facts and circumstances, the assessee has not made out any case to show any good reason much less a sufficient reason for the delay of more than 4 years. Miscellaneous Application filed by the assessee is barred by limitation and consequently, dismissed. Issues Involved:1. Limitation for filing the Miscellaneous Application.2. Tribunal's inherent jurisdiction to rectify its own errors.3. Applicability of Section 254(2) versus Rule 24 of the Income Tax Appellate Tribunal Rules.4. Validity and applicability of precedents cited by the assessee.Issue-Wise Detailed Analysis:1. Limitation for Filing the Miscellaneous Application:The primary issue is whether the Miscellaneous Application filed by the assessee after four years is maintainable. The Tribunal emphasized that the limitation period provided under Section 254(2) of the Income Tax Act is four years, which applies to both suo-motu actions by the Tribunal and actions taken on the request of a party. The Tribunal concluded that the application filed beyond this period is barred by limitation and deserves to be dismissed. The Tribunal also noted that the assessee did not file any application for condonation of delay nor explained the cause for the inordinate delay of more than four years.2. Tribunal's Inherent Jurisdiction to Rectify Its Own Errors:The assessee argued that the Tribunal has inherent jurisdiction to set aside orders passed by committing an error that caused prejudice to a party. The Tribunal acknowledged that it has the power to rectify errors to avoid prejudice, as established in the case of Income-tax Officer v. Singar Singh (S.B.) and Sons. However, the Tribunal clarified that this inherent power does not extend to bypassing the statutory limitation period. The Tribunal found that the impugned order dated 6.12.2007 did not suffer from any error committed by the Tribunal itself, but rather was a result of the assessee's failure to appear for the hearing.3. Applicability of Section 254(2) versus Rule 24 of the Income Tax Appellate Tribunal Rules:The assessee contended that the limitation period under Section 254(2) does not apply to recalling orders under Rule 24 of the Income Tax Appellate Tribunal Rules. The Tribunal noted that Rule 24 is procedural and does not extend the Tribunal's jurisdiction beyond what is provided under the statute. The Tribunal emphasized that the limitation for rectification under Section 254(2) is applicable, and Rule 24 does not provide an independent basis to recall orders beyond the statutory limitation period.4. Validity and Applicability of Precedents Cited by the Assessee:The assessee relied on several judicial precedents to support their case. The Tribunal analyzed these precedents in detail:- In the case of Commissioner of Income-tax v. Income-tax Appellate Tribunal & another, the Tribunal noted that the issue was regarding the un-amended provisions of Rule 25, which did not provide for setting aside exparte orders. The Tribunal highlighted that the rule has since been amended to include provisions for setting aside such orders.- The decision in Khushalchand B. Daga v. Surendran (T.K.) was based on the un-amended Rule 24, which was struck down as ultra vires. The Tribunal pointed out that the current Rule 24 includes provisions for setting aside exparte orders, making the precedent inapplicable.- The Nagpur Special Bench decision in Bhilai Engineering Corporation Ltd vs DCIT was overruled by a larger bench in Arvindbhai H. Shah Vs Assistant Commissioner of Income Tax, which held that the four-year limitation applies to both suo-motu actions and actions on the request of a party.Conclusion:The Tribunal concluded that the Miscellaneous Application filed by the assessee is barred by limitation and dismissed it accordingly. The Tribunal reiterated that the statutory limitation period of four years under Section 254(2) is applicable and that there is no provision for condonation of delay beyond this period. The Tribunal also emphasized that the assessee failed to provide any sufficient reason for the delay in filing the application.