Case Note & Summary
The petitioner, Leena Power Tech Engineers Pvt. Ltd., challenged an order of the Income Tax Appellate Tribunal (ITAT) dated 03 November 2023, which dismissed its Miscellaneous Application No.231/MUM/2022 in ITA No.1313/MUM/2020 as barred by limitation. The ITAT had rejected the assessee's appeal on 21 September 2021, and the petitioner claimed that this order was communicated on 17 November 2021. Under Section 254(2) of the Income Tax Act, 1961, a rectification application must be filed within six months from the end of the month in which the order was passed. Accordingly, the limitation expired on 31 May 2022. The petitioner filed the miscellaneous application on 26 August 2022, resulting in a delay of approximately three months. The ITAT held that it had no jurisdiction to condone the delay, relying on the Karnataka High Court decision in Karuturi Global Ltd. v. DCIT. The petitioner raised two contentions before the High Court: first, that the Supreme Court's order dated 10 January 2022 in Suo Motu Writ Petition (C) No.3 of 2020 extended limitation during the COVID-19 period, and second, that sufficient cause existed for condonation of delay. The High Court noted that the first contention was not raised before the ITAT and, upon consideration, found it inapplicable because the limitation period expired on 31 May 2022, which is beyond the period covered by the Supreme Court's order (15 March 2020 to 28 February 2022). Regarding the second contention, the High Court held that Section 254(2) does not empower the ITAT to condone delay beyond six months, as held by its coordinate bench in Ram Baburao Salve v. Assessing Officer. Consequently, the High Court dismissed the petition, finding no ground to interfere with the ITAT's order.
Headnote
A) Income Tax - Rectification of Mistake - Limitation - Section 254(2) of Income Tax Act, 1961 - The ITAT rejected the assessee's miscellaneous application as barred by limitation, holding it had no power to condone delay beyond six months. The High Court upheld this view, relying on Ram Baburao Salve v. Assessing Officer and Karuturi Global Ltd. v. DCIT, holding that Section 254(2) does not confer any power to condone delay beyond the prescribed period. (Paras 9-17) B) Limitation - COVID-19 Extension - Supreme Court Order dated 10 January 2022 in Suo Motu Writ Petition (C) No.3 of 2020 - The petitioner's contention that limitation commenced only from 01 March 2022 was rejected. The order excluded the period from 15 March 2020 to 28 February 2022, but the limitation in this case expired on 31 May 2022, which is beyond that period. Hence, the order did not assist the petitioner. (Paras 11-14)
Issue of Consideration
Whether the ITAT had jurisdiction to condone delay in filing a miscellaneous application under Section 254(2) of the Income Tax Act, 1961 beyond the prescribed six-month period, and whether the Supreme Court's order dated 10 January 2022 extending limitation during COVID-19 applied to the facts of this case.
Final Decision
The High Court dismissed the writ petition, upholding the ITAT order. The Rule was discharged without any cost orders.
Law Points
- Limitation for rectification under Section 254(2) of Income Tax Act
- 1961 is six months from end of month of order
- no power to condone delay beyond that
- Supreme Court COVID-19 order does not apply where limitation expired after 28 February 2022
