LI Network
Published on: October 11, 2023 at 13:33 IST
The Allahabad High Court has clarified that the mention of an incorrect section in the title of an application should not prejudice an assessee’s rights.
The judgment emphasizes the importance of adherence to Rule 24 of the Income Tax (Appellate Tribunal) Rules over the section mentioned in the title of the application.
This verdict, delivered by Justice Pankaj Bhatia, upholds the fundamental right to change the name and facet of an application under Article 19(1)(a) of the Indian Constitution.
The case in question involved a petitioner who had initially appealed against an order of assessment/penalty before the Commissioner of Income Tax (Appeals).
When the appeal was dismissed, the petitioner sought recourse in the Income Tax Appellate Tribunal, Lucknow Bench. Due to a lack of notice of hearing, the petitioner couldn’t attend the tribunal proceedings. Consequently, the appeal was dismissed for non-prosecution, with an observation that the assessee could move an application under Section 254 of the Income Tax Act, 1961.
However, when the petitioner filed an application with the title “Application under Section 254 of the Income Tax Act,” it was dismissed on the grounds of exceeding the limitation period prescribed under Section 254 of the Act. The petitioner’s counsel contended that the appropriate remedy for recalling such an order was under Rule 24 of the Income Tax (Appellate Tribunal) Rules.
The confusion arose from the fact that the original order suggested moving an application under Section 254 of the Act, leading the petitioner to mention Section 254 in the title of the application.
The court agreed with the petitioner’s reliance on a judgment from the Delhi High Court, which emphasized that the application for recall should be decided in accordance with Rule 24 of the Rules. This is in contrast to Section 254, which provides for the rectification of an order.
The Allahabad High Court noted that the mention of the wrong section in the title of the application, especially when based on the observations of the Tribunal, should not be held against the petitioner.
Justice Pankaj Bhatia, while delivering the judgment, stated, “A mere wrong mention in the title of the application, that too on the basis of the observations made by the Tribunal itself cannot be construed against the petitioner and cannot wipe away the scope of application under Rule 24 of the Income Tax (Appellate Tribunal Rules).”
Consequently, the Court quashed the order and remanded the case back to the Income Tax Appellate Tribunal for a fresh order, with a clear directive to consider the provisions of Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963.
This ruling sets a precedent that ensures that technicalities like the incorrect mention of a section in the title of an application do not impede the fundamental rights of the assessee to seek a remedy in accordance with the relevant rules.
Case Title: “M/S Purnagiri Rice Mill, Shahjahanpur”