Facts of the Case

The appellant-company had challenged the order passed by the Income Tax Appellate Tribunal by way of appeals before the Delhi High Court. During the pendency of the appeals, it was brought to the notice of the Court that some issues raised by the appellant had not been adjudicated by the Tribunal in its order. Since such non-adjudication required rectification by the Tribunal itself, the appellant expressed its intention to file an appropriate rectification application before the ITAT.

Issues Involved

  1. Whether the appellant could seek rectification before the ITAT for issues left undecided in its order?
  2. Whether the High Court should entertain the appeal under Section 260A when the statutory rectification remedy remained available?
  3. Whether liberty could be granted to re-approach the High Court after disposal of rectification proceedings?

Petitioner’s Arguments

  • The appellant contended that certain material issues raised before the ITAT had remained unaddressed in the impugned order.
  • It was submitted that a rectification application under Section 254(2) would be the appropriate remedy to seek adjudication of such omitted issues.
  • The appellant requested permission to withdraw the present appeals while reserving liberty to approach the High Court again if necessary.

Respondent’s Arguments

  • The Revenue appeared through counsel and opposed the appeal proceedings.
  • However, in light of the appellant opting for rectification proceedings before the ITAT, the matter was considered in the context of the available statutory remedy.

Court Order

The Delhi High Court observed that since the appellant intended to file a rectification application before the ITAT regarding issues left undecided, it would be appropriate to permit such course of action. Accordingly, the appeals were dismissed as withdrawn. The Court specifically granted liberty to the appellant to agitate its grievances in suitable proceedings and reserved the appellant’s right to raise the questions sought to be urged in the present appeals in future proceedings, if required.

Important Clarification

This judgment clarifies that where issues remain undecided by the ITAT, the proper course is to invoke rectification jurisdiction under Section 254(2) before directly pursuing appellate remedies under Section 260A. The High Court recognized the procedural hierarchy and preserved the appellant’s substantive rights by granting liberty to re-agitate the issues subsequently.

Sections Involved

  • Section 254(2) of the Income Tax Act, 1961 – Rectification of mistakes by ITAT
  • Section 260A of the Income Tax Act, 1961 – Appeal to High Court against ITAT order

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2015:DHC:11056-DB/SRB18022015ITA1002015_122242.pd

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.