Service of rectification order under Section 37C controls limitation, and delay may be condoned when receipt is proved later.

Where service of a rectification order is not proved in the manner required by Section 37C of the Finance Act, 1994, limitation for filing an appeal runs from the date the assessee receives that rectification order. In this matter, the department failed to produce reliable proof of earlier service, and the record showed that the assessee had acted promptly after receipt of the rectification order. On that basis, the delay of 335 days was condoned and the appeal was entertained in favour of the assessee.

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Issues: Whether the delay of 335 days in filing the appeal was liable to be condoned in view of the disputed service of the rectification order and the reckoning of limitation from the date of its receipt.

Analysis: The appeal was filed after a substantial delay, but the appellant showed that the original order had been received, a rectification application had been promptly filed, and the rectification order was received only on a later date. The department failed to produce reliable proof that the rectification order had been served earlier. In the absence of proof of service on the appellant or an authorised agent, the mandate of Section 37C of the Finance Act, 1994 was not satisfied. The record also showed prompt conduct by the appellant after receipt of the rectification order, supporting due diligence. The limitation for challenging the order was therefore treated as running from the receipt of the rectification order.

Conclusion: The delay was rightly condoned and the application was allowed in favour of the assessee.

Ratio Decidendi: Where service of a rectification order is not proved in the manner required by Section 37C of the Finance Act, 1994, limitation for filing the appeal runs from the date of receipt of that rectification order and a diligent appellant is entitled to condonation of delay.

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