OTTERS CLUB Vs. DIRECTOR OF INCOME TAX (EXEMPTIONS) MUMBAI
LAWS(BOM)-2017-1-239
HIGH COURT OF BOMBAY
Decided on January 12,2017

Otters Club Appellant
VERSUS
Director Of Income Tax (Exemptions) Mumbai Respondents

JUDGEMENT

- (1.) This petition under Article 226 of the Constitution of India challenges the order dated 30th September, 2016 passed by the Income Tax Appellate Tribunal (Tribunal) under Section 254(2) of the Income Tax Act, 1961 (the Act). The impugned order dismissed the petitioner's application for rectification of its order dated 3rd February, 2016 passed under Section 254(1) of the Act relating to A.Y. 2009-10.
(2.) The petitioner's grievance before us as also raised before the Tribunal are twofold: (a) The order dated 3rd February, 2016 was passed beyond a period of 90 days after the hearing of the appeal was concluded on 22nd September, 2015. This was in breach of Rule 34(5)(c) of the Income Tax Appellate Tribunal Rules, 1963 (Tribunal Rules) as also of the binding decision of this Court in Shivsagar Veg. Restaurant v. ACIT (2009) 317 ITR 433. Further this delay has also resulted in prejudice to the parties as binding decisions of the coordinate benches though referred to were ignored in the order dated 3rd February, 2016. (b) Consequent to the order dated 3rd February, 2016 passed under Section 254(1) of the Act, the jurisdictional High Court on an identical issue in the case of DIT(E), Mumbai v. Maharashtra Housing and Area Development Authority (Income Tax Appeal No.2174/2013) rendered on 18th April, 2016 has decided the issue arising herein in favour of the petitioner assessee. It is submitted subsequent decisions of jurisdictional High Court would warrant of rectification of earlier orders as held by the Apex Court in ACIT v. Saurashtra Kutch Stock Exchange Ltd. (2008)305 ITR 227. Therefore it is submitted that the Tribunal ought to have exercised its jurisdiction and allowed the rectification application.
(3.) The impugned order of the Tribunal while rejecting the rectification application does not dispute the fact that the order dated 3rd February, 2016 passed under Section 254(1) of the Act was passed beyond the period of 90 days from the date of conclusion of its hearing on 22nd September, 2015. However, it records that administrative clearance had been taken to pass such an order beyond the period of 90 days. We are at a loss to understand what is meant by 'administrative clearance' and the basis for the same. Besides when, how and from whom the administrative clearance was received, are all questions still at large. Mr. Suresh Kumar, the learned counsel who appears for all the respondents, including the Registry of the Tribunal is unable to shed any light on the same. Moreover, we are unable to comprehend the meaning of 'Administrative clearance' in the face of Rule 34 (5)(c) read with Rule 34(8) of the Tribunal Rules. It is clear that the above provisions mandate the Tribunal to pronounce its order at the very latest on or before the 90th day, after the conclusion of the hearing. In fact, this Court in Shivsagar Veg. Restaurant (supra) after referring to various decisions of the Apex Court directed the President of the Tribunal to frame guidelines to prevent delay in delivery of orders/judgments. It also directed all the revisional and appellate authorities (including Tribunal) under the Act to decide the matters heard by them within a period of three months from the date of the conclusion of the hearing. This is further compounded by the fact that the submission of the petitioner in respect of the entire issue being covered by orders of coordinate benches was according to the petitioner, lost sight of while passing the order dated 3rd February, 2016.;


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