Appellant granted right to restore appeal rejected by ITAT under Income Tax Act.

The appellant's grievance regarding the rejection of the rectification application by the ITAT under Section 254(2) of the Income Tax Act, 1961 was addressed. The Court held that the ITAT's dismissal of the rectification application was improper as there was no limitation period specified for such applications. The ITAT's failure to decide the appeal on its merits and rejection for non-prosecution was deemed to exceed its jurisdiction. Consequently, the appellant was granted the right to approach the ITAT for restoration of the appeals within thirty days for consideration on merits.

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Issues:
1. Appellant's grievance regarding rejection of rectification application by ITAT.
2. Interpretation of Section 254(2) of the Income Tax Act, 1961.
3. Jurisdiction of ITAT in deciding appeals on merits.
4. Appellant's right to approach ITAT for restoration of appeals.

Analysis:

1. The appellant raised a grievance that the ITAT rejected the rectification application, which was moved under Section 254(2) of the Income Tax Act, 1961. The ITAT's order dismissing the appeal was dated 16.06.2016, and the rectification application was filed on 02.6.2017, leading to its dismissal by the impugned order.

2. The appellant contended that Section 254(2) of the Act does not impose any limitation for approaching the ITAT for rectification, citing judgments of Allahabad High Court and Gujarat High Court. However, the Court held that the amendments to Section 254(2) aimed to restrict the extended period for rectification. The ITAT's failure to decide the appeal on merits, rejecting it for non-prosecution, was deemed as exceeding its jurisdiction.

3. Rule 24 of the Income Tax Appellate Tribunal’s Rules mandates the ITAT to decide appeals on merits. The Court emphasized that the ITAT's rejection for non-prosecution indicated a failure to adhere to its jurisdiction. As Rule 25 does not specify a limitation period for approaching the Tribunal, the appellant was granted the right to file an application for restoration of appeals within thirty days for consideration on merits.

4. Consequently, the appeals were disposed of, allowing the appellant to approach the ITAT for restoration of the appeals within thirty days. The ITAT was directed to consider the appeals on their merits and decide in accordance with the law after hearing both parties.

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