2023 (10) TMI 281 - HC - Income Tax

Court overturns dismissal of recall application, rules in favor of petitioner on Rule 24 application

M/s Purnagiri Rice Mill, Shahjahanpur Thru. Authorized Representative Shri Rakesh Kumar Gupta Versus Union Of India Thru. Ministry Of Finance Deptt. of Revenue, New Delhi And 2 Others

M/s Purnagiri Rice Mill, Shahjahanpur Thru. Authorized Representative Shri Rakesh Kumar Gupta Versus Union Of India Thru. Ministry Of Finance Deptt. of ... Issues:The judgment deals with the dismissal of a recall application by the Income Tax Appellate Tribunal based on the grounds of limitation prescribed under section 254(2) of the Income Tax Act, 1961 and the provisions of Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963.Summary:Issue 1: Dismissal of recall application based on limitation groundsThe petitioner challenged the order dismissing their appeal for non-prosecution by filing a recall application. The application was dismissed on the grounds of being beyond the limitation prescribed under section 254(2) of the Income Tax Act, despite being filed under Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963. The petitioner argued that the mention of Section 254 in the application was due to the Tribunal's observations and that the recall application should have been considered under Rule 24. The respondent contended that the application was rightly dismissed based on the bar of limitation under section 254(2) of the Income Tax Act.Issue 2: Interpretation of Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963The counsel for the petitioner highlighted Rule 24, which provides for the hearing of an appeal ex-parte and the subsequent setting aside of the ex-parte order if sufficient cause is shown for non-appearance. It was argued that since Rule 24 specifically addresses the procedure for recalling an order, the mention of Section 254 in the impugned order was incorrect. The petitioner relied on a judgment by the Delhi High Court that emphasized the application of Rule 24 over Section 254 for recalling orders.Judgment:The Hon'ble Judge agreed with the petitioner's arguments, stating that the application should have been considered under Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963, and not under Section 254 of the Income Tax Act. The Judge found the order dismissing the recall application unsustainable and quashed it. The matter was remanded to the Income Tax Appellate Tribunal to pass a fresh order in accordance with Rule 24. The judgment was based on the interpretation of the relevant rules and the Delhi High Court's decision in a similar case. The writ petition was disposed of with these observations.