INDUSTRIAL EQUIPMENT COMPANY CHANDIGARH vs. INCOME TAX APPELLATE TRIBUNAL & ORS

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CWP/25152/2013HC Punjab & HaryanaPHHC01086192201318 November 2013Author: MR. JUSTICE RAJIVE BHALLA,MR. JUSTICE DR. BHARAT BHUSHAN PARSOON2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the ITAT was correct in declining to restore the Miscellaneous Application for rectification. The Court observed that it is an established principle of law that when an appeal is pending before a superior forum, an application for rectification (which the Court characterized as akin to a review in this context) cannot be entertained by a subordinate forum. The ITAT is considered subordinate to the High Court under the Income Tax Act, 1961, and Article 227 of the Constitution. Since an appeal on the same questions raised in the rectification application was pending before the High Court, the rectification application was not maintainable before the ITAT. Therefore, the order passed by the ITAT declining to restore the application did not warrant interference. The High Court did not decide on the merits of the rectification sought, as the application was deemed not maintainable.

What were the facts?

The petitioner, Industrial Equipment Company Chandigarh, challenged an order dated 16.4.2013 passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench 'A'. The ITAT had declined to restore a Miscellaneous Application filed by the petitioner seeking rectification of an earlier order that dismissed the petitioner's appeal. The petitioner's original appeal was dismissed by the ITAT on 30.10.2009. Subsequently, the petitioner filed an appeal (ITA No.513 of 2010) challenging this dismissal order, which was admitted and is pending. The petitioner did not disclose the pendency of the rectification application before the ITAT at the time of admission of the appeal before the High Court.

What were the issues?

1. Whether the ITAT was justified in declining to restore the petitioner's Miscellaneous Application for rectification of its order, when a substantive appeal against the said order was pending before the High Court? (Question of law, turning on principles of procedural propriety and jurisdiction). Assessee's Contention: The petitioner sought restoration of its Miscellaneous Application for rectification. The judgment does not explicitly record the petitioner's arguments for restoration, but implicitly, they would have argued for the rectification of the original order. Revenue's Contention: The judgment does not record any specific arguments from the revenue. However, the High Court's reasoning implies that the revenue would have supported the ITAT's decision.

Which sections of the Income-tax Act were involved?

Section 227

AI-generated summary — verify with the full judgment below

Civil Writ Petition No.25152 of 2013 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. Civil Writ Petition No.25152 of 2013 Date of Decision: 18.11.2013 Industrial Equipment Company Chandigarh Petitioner versus Income Tax Appellate Tribunal and another ..Respondents CORAM: HON'BLE MR. JUSTICE RAJIVE BHALLA HON'BLE MR. JUSTICE DR. BHARAT BHUSHAN PARSOON Present: Mr. Ravi Shankar, Advocate, for the petitioner. RAJIVE BHALLA, J. (ORAL) The petitioner challenges order dated 16.4.2013 passed by the Income Tax Appellate Tribunal,, Chandigarh Bench `A', Chandigarh, declining the petitioner's prayer for restoration of a Miscellaneous Application seeking rectification of the original order dismissing the appeal filed by the petitioner. A perusal of the facts reveals that an appeal filed by the assessee was dismissed by the Income Tax Appellate Tribunal on 30.10.2009. Admittedly, ITA No.513 of 2010, challenging this order, stand admitted and is pending. At the time of admission, the assessee did not disclose that he had already filed an application for rectification, before the Tribunal. We are rather surprised at this practice of seeking rectification of an order and simultaneously filing an appeal. It is an established principle of law that when an appeal is pending before a superior forum, an application for rectification, in Varinder Kumar 2013.11.21 17:07 I attest to the accuracy and integrity of this document High Court Chandigarh

Civil Writ Petition No.25152 of 2013 2 this case, actually an application for review, cannot be entertained by a subordinate forum. The Income Tax Appellate Tribunal, is a forum, subordinate to the High Court under the Income Tax Act, 1961 and under Article 227 of the Constitution. We, therefore, hold that as an appeal, on the same questions, raised in the rectification application, was pending consideration before the High Court, the application for rectification was, even otherwise, not maintainable and therefore, order passed by the Tribunal declining to restore the application for rectification does not warrant interference. The writ petition is dismissed. ( RAJIVE BHALLA )

JUDGE 18.11.2013 ( DR. BHARAT BHUSHAN PARSOON ) VK JUDGE Varinder Kumar 2013.11.21 17:07 I attest to the accuracy and integrity of this document High Court Chandigarh

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