COMMISSIONER OF INCOME TAX II V. RASIDA IBRAHIMBHAI VOHRA

SCA/17461/2013

AI Insights

The case involves a series of petitions filed by the Commissioner of Income Tax II, Vadodara, challenging the ITAT's decision which directed the Commissioner to reconsider the cases of several assessees whose applications for regularization of their tax returns were initially rejected. The ITAT's decision was based on a precedent that the High Court found inapplicable to the circumstances of the case. The main legal contention was whether the ITAT had the jurisdiction to entertain appeals against the Commissioner's administrative orders under Section 119(2)(b) of the Income Tax Act, 1961. The High Court concluded that such appeals were not maintainable, leading to the quashing of the ITAT's order.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 728577 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 18-12-2013
• Assessment Year: misc
• Other Referred Cases: Special Civil Application No.8003 of 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; Rectification Application; Non-Appealable
• Section: 119(2)(b); 253; 226; 227

Judgement Text

"C/SCA/17461/2013 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION NO. 17461 of 2013 With SPECIAL CIVIL APPLICATION NO. 17462 of 2013 TO SPECIAL CIVIL APPLICATION NO. 17464 of 2013 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE M.R. SHAH sd/­ and HONOURABLE MR.JUSTICE R.P.DHOLARIA sd/­ ============================================= 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 TAX II....Petitioner(s) Versus RASIDA IBRAHIMBHAI VOHRA & 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 : 18/12/2013 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1.0. As common question of law and facts arise in this group of petitions, they are disposed of by this common judgment and order. Page 1 of 7 C/SCA/17461/2013 JUDGMENT 2.0. In all these petitions under Articles 226 & 227 of the Constitution of India, the petitioner­ Commissioner of Income Tax­II, Vadodara has challenged the impugned common judgment and order passed by the learned Income Tax Appellate Tribunal (hereinafter referred to as the “ITAT”) dated 31.5.2013 passed in ITA No.188/AHD/2012 to 191/AHD/2012, by which, the learned ITAT has directed the Commissioner of Income Tax to consider the case of the respondents herein­respective assessee afresh including the issue of condonation of delay, after giving proper opportunity of being heard to them. 3.0. The facts leading to the present Special Civil Applications in nutshell are as under: 3.1. That with respect to the each assessee the Commissioner of Income Tax passed separate orders dated 3.11.2008 and 22.11.2009 respectively passed under Section 119(2)(b) of the Income Tax Act, 1961 (hereinafter referred to as the “I.T. Act”), by which, the application submitted by the respective assessee for regularization of their return in terms of Section 119(2)(b) of the I.T. Act, came to be rejected. 3.2. Feeling aggrieved and dissatisfied with the separate orders passed by the Commissioner of Income Tax passed under Section 119(2) (b) of the I.T. Act, the respective assessee preferred appeals before the learned ITAT and the learned ITAT by impugned judgment and order and relying upon the order passed by the Division Bench of this Court in Special Civil Application No.8003 of 2013 has directed the Commissioner of Income Tax to consider the case of the assessee afresh, including the issue of condonation of delay, after giving proper opportunity of being heard to them. 3.3. Feeling aggrieved and dissatisfied with the impugned common judgment and order passed by the learned ITAT, the department / revenue has preferred present Special Civil Applications Page 2 of 7 C/SCA/17461/2013 JUDGMENT under Articles 226 & 227 of the Constitution of India. 4.0. Ms. Mauna Bhatt, learned advocate on behalf of the petitioner­revenue has vehemently submitted that the learned Tribunal has materially erred in passing impugned order and directing the Commissioner to consider the case of the assessee afresh. It is submitted that the learned Tribunal has materially erred in relying upon / considering / applying the order passed by the Division Bench of this Court in Special Civil Application No.8003 of 2013. 4.1. It is further submitted by Ms. Mauna Bhatt, learned advocate for the petitioner ­revenue that as such against the order passed by the Commissioner passed under Section 119(2)(b) of the I.T. Act appeal before the learned ITAT is not maintainable as the orders passed by the Commissioner is an administrative and non appealable order. It is submitted that as such consistently the learned ITAT has held that order passed by the Commissioner passed under Section 119(2)(b) of the I.T. Act is an administrative order and therefore, non appealable. It is submitted that despite the above, in the present cases the learned Tribunal has entertained the appeals which otherwise were not maintainable and has passed impugned orders. It is submitted that therefore, common judgment and order passed by the learned Tribunal is wholly without jurisdiction. 4.2. It is further submitted by Ms. Mauna Bhatt, learned advocate for the petitioner­revenue that even the learned Tribunal has materially erred in passing the impugned order relying upon the order passed by this Court passed in Special Civil Application No.8003 of 2013. It is submitted that as such in the aforesaid decision, the Division Bench did not agree with the similar order passed by the Tribunal passed Page 3 of 7 C/SCA/17461/2013 JUDGMENT in rectification application. However, the Division Bench in exercise of powers under Article 226 of the Constitution of India did not interfere with the order passed by the Tribunal in the peculiar facts and circumstances of the case narrated in the said order. It is submitted that in the said decision the Division Bench has not stated that in each and every appeal against the order passed by the Commissioner passed under Section 119(2)(b) of the I.T. Act, the Tribunal can entertain the appeal and pass the order on merits. It is submitted that the powers which are exercised by this Court under Articles 226 of the Constitution of India cannot be permitted to be exercised by the learned Tribunal while exercising the appellate jurisdiction. It is submitted that once the appeal is not maintainable against the order passed by the Commissioner under Section 119(2)(b) of the I.T. Act, thereafter it is not open for the Tribunal to pass any order on merits. 5.0. Though, served nobody appears on behalf of the respondents. 6.0. Heard Ms. Mauna Bhatt, learned advocate for petitioner­ revenue. At the outset, it is required to be noted that what was challenged before the learned ITAT was the order passed by Commissioner passed under Section 119(2)(b) of the Act. It is submitted that consistently the Appellate Tribunal has held that the order passed by the Commissioner passed under Section 119(2)(b) of the I.T. Act is an administrative and non appealable order. Even otherwise, considering Section 253 of the I.T. Act an appeal against the order passed by the Commissioner passed under Section 119(2)(b) of the I.T. Act is not provided / maintainable. As such order passed by the Commissioner passed under Section 119(2)(b) of the I.T. Act is an administrative order against which appeal before the learned Appellate Page 4 of 7 C/SCA/17461/2013 JUDGMENT Tribunal under Section 253 of the Act would not be maintainable. At the cost of repetition, it is observed that consistently learned Appellate Tribunal has held that the order passed by the Commissioner passed under Section 119(2)(b) of the I.T. Act is an administrative and non appealable order. Under the circumstances, the learned Appellate Tribunal has materially erred in entertaining the appeals against the order passed by the Commissioner passed under Section 119(2)(b) of the I.T. Act and has materially erred in passing the impugned order directing the Commissioner to consider the case of the respondents­ assessee afresh, including the issue of condonation of delay, virtually quashing and setting aside the orders passed by the Commissioner of Income Tax passed under Section 119(2)(b) of the Act and remanding the matter to the Commissioner. 6.1. It appears that by passing impugned order, the learned Appellate Tribunal has relied upon and / or considered / followed the order passed by the Division Bench of this Court in Special Civil Application No.8003 of 2013. We have considered and perused the order passed by the Division Bench of this Court in Special Civil Application No.8003 of 2013 and considering the same, we are of the considered opinion that learned Appellate Tribunal has materially erred in passing the impugned common judgment and order relying upon the order passed by the Division Bench of this Court passed in Special Civil Application No.8003 of 2013. In the case before the Division Bench, the learned Appellate Tribunal initially dismissed the appeal which was preferred against the order passed by the Commissioner passed under Section 119(2)(b) of the I.T. Act holding that the said order is an administrative and non appealable order. Despite the above, in a rectification application, learned Tribunal issued similar direction and / or passed similar order to the impugned orders and too that as such the Page 5 of 7 C/SCA/17461/2013 JUDGMENT Division Bench did not agree with the order passed by the Tribunal passed in rectification application and as such, has observed that the Tribunal order on rectification application suffered from serious legal defect. In para 7 the Division Bench has observed as under: 7.We have no hesitation in holding that the Tribunal’s order on rectification application suffered from serious legal defect. If in the original order, the Tribunal was of the opinion that the order passed by the petitioner was not appellable, 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. In essence, the Tribunal nullified the original order of the Commissioner and directed him to pass a fresh order after hearing the respondent. The Tribunal could have done this if the appeal was maintainable. When the Tribunal was of the opinion that the appeal was not maintainable, there was no question of giving such a direction, particularly in the order on application for rectification, the Tribunal did not come to any different conclusion. In other words, without holding that the appeal was maintainable, the order under challenge could not have been interfered with. However, in the peculiar facts and circumstances of that case, the Division Bench did not thought it fit to interfere with the order passed by the learned Tribunal. Thus, it can be said that in exercise of powers under Article 226 of the Constitution of India the Division Bench thought it fit not to interfere with the order passed by the learned Tribunal, though the Division Bench observed that the order passed by the Tribunal suffered from serious legal defect. The order passed by the Division Bench in Special Civil Application No. 8003 of 2013 cannot be said to be a precedent and as such no law has been laid down by the Division Bench in the aforesaid decision. By aforesaid decision in Special Page 6 of 7 C/SCA/17461/2013 JUDGMENT Civil Application No.8003 of 2013 the Division Bench has not passed an order and / or held that though the appeal before the Appellate Tribunal against the order passed by the Commissioner passed under Section 119(2)(b) of the I.T. Act is maintainable and the Appellate Tribunal in exercise of appellate jurisdiction can entertain the appeal and pass the order on merits. Under the circumstances, as such the learned Tribunal has materially erred in solely relying upon the decision of the Division Bench of this Court in Special Civil Application No.8003 of 2013, which was passed by the Division Bench in exercise of powers under Article 226 of the Constitution of India and in the peculiar facts and circumstances of that case. As such the learned Tribunal has not correctly appreciated the decision of the Division Bench of this Court in Special Civil Application No.8003 of 2013 and as such has not considered the fact that as such appeal was not maintainable at all. Under the circumstances, the learned Appellate Tribunal has materially erred in passing the impugned common judgment and order relying upon and / or considering the order passed by this Court in Special Civil Application No.8003 of 2013. 7.0. In view of the above and for the reasons stated above all the petitions succeeds and the impugned common judgment and order passed by the learned ITAT dated 31.5.2013 passed in ITA No.188/AHD/2012 to 191/AHD/2012 is hereby quashed and set aside. Rule is made absolute to the aforesaid extent in each of the petitions. No costs. sd/­ (M.R.SHAH, J.) sd/­ (R.P.DHOLARIA,J.) Kaushik Page 7 of 7 "