COMMISSIONER OF INCOME TAX-II V. PARMAR KANUBAHI SOMABHAI

SCA/16524/2013

AI Insights

The case involves the Commissioner of Income Tax-II, Vadodara, who filed a petition against an order by the ITAT that directed the Commissioner to reconsider a case regarding the condonation of delay in filing a tax return for the Assessment Year 2000-01. The ITAT had previously dismissed the assessee's appeal as not maintainable, stating that the order passed by the Commissioner under section 119(2)(b) of the Income Tax Act, 1961, was administrative and not appealable. However, in the rectification application, the ITAT directed the Commissioner to reconsider the case, which the Commissioner contested as being beyond the ITAT's jurisdiction.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 728667 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 25-11-2013
• Assessment Year: misc
• Other Referred Cases: Special Civil Application No.8003/2013
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: MAUNA BHATT
• Keywords: Administrative order; Condonation of delay; Income Tax; Jurisdiction; Rectification Application
• Section: 254(2); 119(2)(b); 253; 226; 227

Judgement Text

"C/SCA/16524/2013 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION NO. 16524 of 2013 For Approval and Signature: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE R.P.DHOLARIA ========================================= 1. Whether Reporters of Local Papers may be allowed to see the judgment ? Yes 2. To be referred to the Reporter or not ? Yes 3. Whether their Lordships wish to see the fair copy of the judgment ? No 4. Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? No 5. Whether it is to be circulated to the civil judge ? No ============================================= COMMISSIONER OF INCOME TAX­II....Petitioner(s) Versus PARMAR KANUBAHI SOMABHAI & 1....Respondent(s) ============================================= Appearance: MRS MAUNA M BHATT, ADVOCATE for the Petitioner(s) No. 1 NOTICE SERVED BY DS for the Respondent(s) No. 1 ­ 2 ============================================= CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE R.P.DHOLARIA Date : 25/11/2013 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) [1.0] By way of this petition under Articles 226, 227 of the Constitution of India, petitioner – Commissioner of Income Tax­II, Vadodara has prayed for an appropriate writ, direction and order to quash and set aside the impugned order dated 03.05.2013 passed by the learned Income Tax Appellate Tribunal (hereinafter referred to as “ITAT”) in Page 1 of 8 C/SCA/16524/2013 JUDGMENT Miscellaneous Application No.220/AHD/2012 in ITA No.548/AHD/2012 for the assessment year 2000­01, by which in exercise of powers under sub­section (2) of section 254 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), the learned ITAT has allowed the said miscellaneous application by observing that “we are of the view that considering the peculiar circumstances of the case, the Commissioner of Income Tax may consider the case afresh including the issue of condonation of delay and after giving proper opportunity of hearing to the assessee pass necessary orders”. [2.0] Facts leading to the present special civil application in nut­shell are as under: [2.1] That the respondent herein – assessee filed the return of income for the Assessment Year 2000­01 belatedly, more particularly, approximately after a period of three years from the actual date of return to be filed. That thereafter by application dated 14.06.2008, the assessee requested the Commissioner of Income Tax­II, Vadodara to condone the delay in furnishing the return of income for the AY 2000­01 in exercise of powers under section 119(2)(b) of the Act. That vide order dated 21.02.2009, the Commissioner of Income Tax­II, Vadodara rejected the said application. [2.2] Feeling aggrieved and dissatisfied with the order passed by the Commissioner of Income Tax­II, Vadodara in exercise of powers under section 119(2)(b) of the Act, the assessee preferred appeal before the learned ITAT. Vide order dated 15.05.2012, the learned ITAT dismissed the said appeal as not maintainable by observing that as the order passed under section 119(2)(b) of the Act is an administrative order, appeal would not be maintainable before the learned ITAT. It appears that thereafter the assessee preferred rectification application being Miscellaneous Application No. 220/AHD/2012 in ITA Page 2 of 8 C/SCA/16524/2013 JUDGMENT No.548/AHD/2012 and by impugned order the learned ITAT has allowed the said rectification application, by which it appears that the learned ITAT wanted to convey/direct the Commissioner to consider the case afresh including the issue of condonation of delay and after giving proper opportunity of hearing to the assessee, pass the necessary orders. Sum and substance of the impugned order seems to be that the learned ITAT seems to have set aside the order passed by the Commissioner passed under section 119(2)(b) of the Act and has directed the Commissioner to pass a fresh order considering the observations made by the learned ITAT in the rectification application. [2.3] Feeling aggrieved and dissatisfied with the impugned order passed by the learned ITAT in rectification application, the Revenue – Commissioner of Income Tax­II, Vadodara has preferred the present special civil application under Articles 226, 227 of the Constitution of India. [3.0] Mrs. Mauna Bhatt, learned advocate appearing on behalf of the petitioner has vehemently submitted that as such the impugned order passed by the learned ITAT is wholly without jurisdiction. It is submitted that as such the learned ITAT dismissed the appeal preferred by the assessee, preferred against the order passed by the Commissioner under section 119(2)(b) of the Act by holding that the order passed by the Commissioner is administrative order. Appeal against the said oder would not be maintainable before the learned ITAT. It is submitted that once the appeal was held to be not maintainable, the learned ITAT ought not to have passed any order in the rectification application in the said appeal and ought not to have passed the impugned order. [3.1] It is submitted that as such against the order passed by the Commissioner, appeal before the learned ITAT would not be maintainable under section 253 of the Act. It is submitted that as such Page 3 of 8 C/SCA/16524/2013 JUDGMENT the learned ITAT rightly dismissed the appeal as not maintainable. It is submitted that still by passing the impugned order the learned ITAT has allowed the rectification application in the appeal which was held to be not maintainable and therefore, the impugned order passed by the learned ITAT is wholly without jurisdiction. [3.2] It is further submitted by Mrs. Bhatt, learned advocate appearing on behalf of the petitioner that while passing the impugned order in M.A., nothing has been observed and/or held by the learned ITAT that against the order passed by the Commissioner under section 119(2)(b) of the Act, appeal before the learned ITAT would be maintainable and/or there was any error committed by them in dismissing the appeal on the ground that the same was not maintainable. [3.3] It is further submitted that as such by passing the impugned order, the learned ITAT has nullified its earlier order passed in appeal dismissing the appeal as not maintainable. It is further submitted that as such by passing the impugned order, except submitting that MA is accordingly allowed, neither the order passed by the Commissioner under section 119(2)(b) of the Act has been specifically set aside nor any specific direction is given. It is submitted that whatever is stated in para 5 can be said to be their views. However, as such neither the order passed by the Commissioner under section 119(2)(b) of the Act has been set aside nor any specific direction given to the Commissioner. It is submitted that assuming that by the impugned order it can be said that the learned ITAT has set aside the order passed by the Commissioner and the matter is remitted to the file of the Commissioner to pass a fresh order, in view of the submissions made hereinabove, the impugned order is wholly without jurisdiction and illegal and/or contrary to the provisions of the Act, which cannot be sustained. [3.4] Mrs. Bhatt, learned advocate appearing on behalf of the petitioner Page 4 of 8 C/SCA/16524/2013 JUDGMENT has vehemently submitted that as such the order passed by the Commissioner under Section 119(2)(b) of the Act would not fall under any of the category as mentioned in section 253 of the Act and therefore, against the order passed by the Commissioner, under section 119(2)(b) of the Act, appeal before the learned ITAT under section 253 of the Act would not be maintainable. It is submitted that the learned ITAT cannot exercise the appellate jurisdiction unless the same is conferred under the statute. It is submitted that therefore, as such earlier the learned ITAT rightly dismissed the appeal as not maintainable. [3.5] Mrs. Bhatt, learned advocate appearing on behalf of the petitioner has heavily relied upon the observations made by the Division Bench of this Court in para 7 of judgment and order passed in Special Civil Application No.8003/2013. Making above submissions and relying upon above observations made in para 7 of the judgment and order passed by the Division Bench of this Court in Special Civil Application No.8003/2013, it is requested to allow the present special civil application. [4.0] Though served, nobody appears on behalf of the respondent. [5.0] Heard Mrs. Mauna Bhatt, learned counsel appearing on behalf of the petitioner and perused the impugned order passed by the learned Appellate Tribunal in Miscellaneous Application/Rectification Application as well as the original order passed in ITA No.548/AHD/2012. [5.1] The challenge by the assessee before the learned Appellate Tribunal was the order passed by the Commissioner on the application submitted by the assessee under section 119(2)(b) of the Act praying for condonation of delay in furnishing return of income. As such by order dated 15.05.2012, the learned Appellate Tribunal disposed of the said Page 5 of 8 C/SCA/16524/2013 JUDGMENT appeal by observing and holding as under: “This appeal has been filed against the order of CIT­II, Baroda passed under section 119(2)(b) of the Income Tax Act, 1961. The order passed by the CIT is an administrative order. As the aforesaid order is not appealable before us, the appeal is dismissed in limine.” Thus, the learned Appellate Tribunal dismissed the said appeal as not maintainable and as such rightly dismissed the said appeal as not maintainable as against the order passed by the Commissioner under section 119(2)(b) of the Act, appeal before the Appellate Tribunal is not maintainable. [5.2] That thereafter the assessee preferred rectification application in the said tax appeal which came to be dismissed as not maintainable and by impugned order the learned Appellate Tribunal has allowed the said miscellaneous application and has virtually quashed and set aside the order passed by the Commissioner and has directed the Commissioner to consider the case afresh including the issue of condonation of delay and after giving opportunity of hearing to the assessee, pass the necessary orders. [5.3] At the outset it is required to be noted that as such the learned Tribunal in the operative portion of the order has neither specifically quashed and set aside the order of the Commissioner nor there is any specific direction given to the Commissioner. Paras 5 and 6 of the impugned order reads as under: “5. We find that the assessee is a retired labourer and is not fully conversant with tax laws. Considering the totality of facts and in the interest of justice we are of the view that considering the peculiar circumstances of the case the Commissioner of Income tax may consider the case afresh including the issue of Page 6 of 8 C/SCA/16524/2013 JUDGMENT condonation of delay and after giving proper opportunity of hearing to the assessee pass the necessary orders. 6. Miscellaneous application is accordingly allowed.” [5.4] However, from the aforesaid it can be said that the learned Tribunal seems to be of the view that the Commissioner may consider the case afresh including the issue of condonation of delay and after giving opportunity of hearing to the assessee and pass the necessary orders. Therefore, as such and without further entering into any technicality, it can be said that the learned Tribunal has set aside the order passed by the Commissioner and has remanded the matter to the Commissioner to pass a fresh order. Therefore, what is required to be considered is, whether the learned Tribunal is justified in passing the impugned order? [5.5] As stated hereinabove, as such the learned Tribunal dismissed the appeal as not maintainable and as such rightly held that the appeal was not maintainable. Once the appeal itself was held to be not maintainable, it is not appreciable how the rectification application in an appeal which was held to be not maintainable, can be said to be maintainable. Under the circumstances, as such the rectification application in the appeal which was held not maintainable, ought not to have been entertained by the learned Tribunal, unless in a rectification application it was submitted that the learned Tribunal has committed an error in holding that the appeal is not maintainable and the learned Tribunal takes the view that the appeal was maintainable. In the present case, that is not so. Neither there was any contention that the appeal was maintainable against the order passed by the Commissioner nor infact there is any finding given by the learned Tribunal in the impugned order that the appeal is held maintainable. Under the circumstances, as such the order passed by the learned Tribunal in rectification application/miscellaneous application is wholly without jurisdiction, as Page 7 of 8 C/SCA/16524/2013 JUDGMENT there cannot be any rectification/miscellaneous application in an appeal which was not maintainable before the Tribunal. [5.6] Even otherwise the impugned order cannot be sustained and it suffers from serious legal defect. As stated hereinabove, if in the original order, Tribunal was of the opinion that the order passed by the Commissioner was not appealable, in exercise of rectification powers the Tribunal simply could not have given directions to the Commissioner to pass fresh order on the respondent’s application. As such by passing the impugned order in the rectification application, the Tribunal has nullified the original order of the Commissioner and directed him to pass a fresh order after hearing the respondent. When the Tribunal was of the opinion that appeal was not maintainable, there was no question of giving such a direction more particularly in the order on application for rectification, the Tribunal did not come to a different conclusion. [6.0] In view of the above, the impugned order passed by the learned Tribunal passed in rectification application cannot be sustained and the same deserves to be quashed and set aside and as observed hereinabove, the same is as such without jurisdiction. Under the circumstances, the impugned order dated 03.05.2013 passed by the learned ITAT in Miscellaneous Application No.220/AHD/2012 in ITA No.548/AHD/2012 is hereby quashed and set aside. Rule is made absolute to the aforesaid extent. In the facts and circumstances of the case, there shall be no order as to costs. Sd/­ (M.R. SHAH, J.) Sd/­ (R.P. DHOLARIA, J.) Ajay Page 8 of 8 "