2024 (4) TMI 1230 - HC - Income Tax

HC upholds ITAT's 4379-day delay condonation and remands case for fresh CIT(A) hearing under Section 245F(2)

The Principal Commissioner of Income Tax 1, Surat Versus MD Industries Pvt. Ltd.

The HC dismissed the petition challenging the ITAT order condoning a 4379-day delay in filing an appeal and remitting the matter to the CIT(Appeal) for ... Rectification application u/s 254 - pendency of the application filed by the assessee before the Settlement Commission as per the provision of Section 245F(2) - assessee filed an appeal before the ITAT challenging the order passed by the CIT(Appeal) with an application to condone the delay in preferring the appeal - ITAT by order condoned the delay of 4379 days and remitted the matter back to the CIT(Appeal) for fresh consideration on merits - Petitioner preferred Misc. Application before the Tribunal for recall of the aforesaid order on the ground that there was a mistake apparent on record as the applications were pending before the Settlement Commission, the Tribunal could not have proceeded with the appeals filed by the assessee as the jurisdiction over the matter would lie before the Settlement Commission as per Section 245F(2) and the Tribunal has no jurisdiction to adjudicate the appeal - Also pointed out to the Tribunal that as the CIT(Appeal) had dismissed the appeal of the assessee for want of jurisdiction and the disposal was only for statistical purpose it was not an appealable order. HELD THAT:- As pertinent to note that the petitioner did not raise the ground with regard to the jurisdiction over the matter of respondent assessee lies with the Income Tax Settlement Commission by virtue of Section 245(F)(2) of the Act and the Tribunal has no jurisdiction to adjudicate the appeal as well as the CIT(Appeal) has only dismissed the appeal for statistical purpose and therefore the order is not an appealable order as the grounds are raised for the first time in the Miscellaneous Application filed by the petitioner. No infirmity in the impugned order passed by the Tribunal to come to the conclusion that there is no mistake apparent on record in the order of the Tribunal wherein after following the decision of the Coordinate Bench, the Tribunal condoned the delay and as the CIT(Appeal) did not adjudicate the issue on merits and dismissed the appeals of the respondent-assessee as not maintainable in view of the order passed by the Settlement Commission on the ground that the matters have abated, the Tribunal has rightly remanded the matter back to the CIT(Appeal). The Gujarat High Court considered a case where the petitioner challenged a common order passed by the Income Appellate Tribunal under Section 254(2) of the Income Tax Act, 1961. The case involved a survey action under Section 133A of the Act, where it was found that bogus capital build-up cases were created by Shri Pankaj Danawala CA and transferred to various assessees of MD group. The respondent assessee filed for settlement before the Settlement Commission. The Assessing Officer passed an assessment order, and the CIT(Appeal) dismissed the appeals due to the pending application before the Settlement Commission. The Settlement Commission disposed of the settlement applications as abated, which was challenged before the Bombay High Court. The matter was remanded back to the Settlement Commission for fresh consideration. Subsequently, various proceedings took place, including objections raised by the assessee and an appeal before the ITAT, which condoned a significant delay and remitted the matter back to the CIT(Appeal) for fresh consideration.The petitioner filed Miscellaneous Applications before the Tribunal for recall of the order remanding the matter, arguing that the Tribunal lacked jurisdiction as the matter was pending before the Settlement Commission. The Tribunal dismissed the applications, leading to the present challenge. The petitioner contended that the Tribunal erred in not applying Section 245(F)(2) of the Act and in following a decision to condone a delay of over 4000 days. The Tribunal's order was scrutinized, and it was found that the Tribunal had followed a decision of a Coordinate Bench to condone the delay and had not made any jurisdictional error.The Court observed that the Tribunal had not erred in following the decision of the Coordinate Bench and had not entertained the appeal on merits. The petitioner's objections regarding jurisdiction were raised for the first time in the Miscellaneous Application and were not considered. The Court concluded that there was no mistake apparent on record in the Tribunal's order, as it had rightly remanded the matter back to the CIT(Appeal) in line with the decision of the Coordinate Bench in a similar case.In light of the above analysis, the Court found no merit in the petitioner's challenges and dismissed the petitions, discharging the notices.The significant holdings of the Court include the affirmation of the Tribunal's decision to remand the matter back to the CIT(Appeal) based on the decision of the Coordinate Bench, the rejection of the petitioner's arguments regarding jurisdiction, and the dismissal of the petitions for lack of merit.