By TIOL News Service

NEW DELHI, MAY 31, 2018: THE ISSUE IS - Whether, under Rule 25, there is no element of period of limitation for the assessee to file an application before the Tribunal for restoration of appeals. YES IS THE VERDICT.

Facts of the case

The assessee, an individual, preferred the present appeal challenging the action of ITAT in rejecting the assessee's application for rectification, on ground of non-prosecution. The counsel for assessee thus argued that the period mentioned u/s 254(2) could be applied only when the Tribunal notices some error and decides to proceed ahead to rectify it and per se did not indicate any limitation within which the aggrieved party could approach it.

High Court held that,

++ it is to be noted that the provision of Section 254(2) was advisably amended to curtail extended period of four years which had been provided to either class of litigants to approach the ITAT for a rectification. In the present case, the ITAT did not decide the appeal on the merits as it is mandated to but rather rejected for non-prosecution. Rule 24 of the Income Tax Appellate Tribunal's Rules and the other provisions of both the Income Tax Act and Rules indicate that the ITAT has to decide the appeals or matters before it on the merits. In these circumstances, the ITAT's failure to do so, implies that it exceeded its jurisdiction and instead of deciding on the merits, rejected the appeal merely for non-prosecution. In the given circumstances and keeping in view the fact that Rule 25 does not stipulate any period of limitation within which the aggrieved party can approach the Tribunal, it is open to the assessee to approach the Tribunal with a suitable application for restoration of the appeals.

(See 2018-TIOL-1021-HC-DEL-IT)

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