Facts of the Case:

  • The Income Tax Appellate Tribunal (ITAT) decided the appeal on 28th February 2007.
  • The Revenue filed an application under Section 254(2) seeking rectification of the order, claiming an error apparent on the face of the record.
  • The application was dismissed by ITAT on 6th February 2009.
  • No appeal was filed against the 28th February 2007 order earlier.
  • Subsequently, the Revenue filed the present appeal after dismissal of the rectification application.
  • The Revenue relied on Perfetti Van Melle India (P) Ltd. vs. The Commissioner of Income Tax, 296 ITR 59, contending that the Revenue cannot challenge a rectification order under Section 254(2) without also challenging the main appeal order.

 

Issues Involved:

  1. Whether the delay of approximately two years in preferring the appeal by the Revenue could be condoned under Section 5 of the Limitation Act.
  2. Whether the Revenue was entitled to challenge the ITAT order of 6th February 2009 without challenging the original appeal order dated 28th February 2007.
  3. Interpretation of Perfetti Van Melle India (P) Ltd. vs. CIT regarding challenge to orders passed under Section 254(2) of the Act.

 

Petitioner’s Arguments:

  • The Revenue argued that the delay should be condoned under Section 5 of the Limitation Act.
  • It was contended that following the precedent in Perfetti Van Melle India (P) Ltd. vs. CIT, the Revenue had a right to challenge the rectification order.

 

Respondent’s Arguments:

  • The respondent argued that the appeal was barred by limitation and that the ITAT’s dismissal of the rectification application cannot be independently challenged without contesting the original appeal order.
  • It was submitted that no such legal proposition as relied upon by the Revenue exists in the cited judgment.

 

Court Order / Findings:

  • The Court examined the judgment in Perfetti Van Melle India (P) Ltd. vs. CIT and found that it did not support the Revenue’s proposition.
  • Since the Revenue was aggrieved only by the order dated 6th February 2009, the appeal and writ petition were dismissed.
  • The Court clarified that the Revenue would be entitled to press a writ petition on its merits independently.

Important Clarification:

  • Condonation of delay under Section 5 is discretionary and depends on the facts of each case.
  • Rectification orders under Section 254(2) cannot be challenged independently if the main appeal order is not contested.
  • Perfetti Van Melle India (P) Ltd. vs. CIT cannot be interpreted to allow independent challenge of rectification orders without contesting the main ITAT order.

Sections Involved:

  • Section 5, Limitation Act
  • Section 254(2), Income Tax Act

 

Link to download the order:- https://delhihighcourt.nic.in/app/case_number_pdf/2011:DHC:11588-DB/AKS01032011ITA6702010_110622.pdf

 

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