Commissioner of Income Tax vs Patel Maheshbhai Dahyabhai

Akil Kureshi, J.—This petition is filed by the Commissioner of income tax-II, Baroda, in somewhat peculiar circumstances. Respondent, one Maheshbhai Dahyabhai Patel, had filed a return of income for the assessment year 2000-01. Such return was filed after the due date prescribed under the income tax Act, 1961 (hereinafter referred to as ''the Act''). He, therefore, had moved the petitioner herein for regularisation of such return in terms of Section 119(2)(b) of the Act. His main plank was that he is a retired labourer and was totally ignorant about the income tax laws and other technical requirements. On the basis of such return, he had claimed a refund of Rs. 33,949/-. In his application dated June 10, 2003 for above purpose, he stated that his normal salary was below the taxable limit and no income tax return, therefore, was filed. Under the Voluntary Retirement Scheme, however, he received a compensation of Rs. 1,30,000/- during the financial year under consideration and the tax of Rs. 33,949/- was deducted at source by the employer company. For the purpose of getting his refund, he had filed the return. The same was, however, beyond the prescribed limit. He, therefore, requested the petitioner to exercise powers u/s 119(2)(b) of the Act.

Such application was rejected by an order dated January 22, 2008. In such order, the Commissioner recorded that the return was due on July 31, 2000. The same was filed only on June 30, 2003 i.e. nearly three years from the last date for filing the return. He rejected the petitioner''s ground of ignorance of law for delay in filing the return.

Such order of the petitioner was challenged by the respondent before the income tax Appellate Tribunal in a Tax Appeal. Such Tax Appeal came to be dismissed by an order dated April 04, 2012. The Tribunal recorded that the appeal which was filed against the order u/s 119(2)(b) of the Act was not maintainable since such order was an administrative order and, therefore, not appealable before the Tribunal.

The respondent filed a Miscellaneous Application for rectification of such order of the Tribunal. In such rectification proceedings, the Tribunal passed the impugned order dated October 19, 2012. During the course of hearing of such application, it was pointed out to the Tribunal that the petitioner had rejected the application u/s 119(2)(b) of the Act, on the premise that the return was filed late by about three years. June, 2003, however, was the date of filing of the application u/s 119(2)(b) of the Act. The return was delayed by only about one year and three months. On such premise, the Tribunal passed the following order.

We have heard the rival submissions and perused the material on record. From the order dated 22-1-2009 passed u/s. 119(2)(b), we find that the application of the assessee was rejected for the reason that the return was filed almost 3 years from the due date. The assessee''s submission is that the delay was not of 3 years but of 1 year and 3 months. It was further the submission of the Ld. A.R. that the delay be directed to be condoned in view of the fact that the assessee is a retired labourer who is ignorant about the income tax laws. The Ld. D.R. has not brought any contrary facts to contradict the submissions of the Ld. A.R.

We find that the assessee is a retired labourer. Considering the totality of facts and in the interest of justice we are of the view that considering the peculiar circumstances of the case the Commissioner of income tax may consider the case afresh including the issue of condonation of delay and after giving proper opportunity of hearing to the assessee pass the necessary orders.

It is this order that the Revenue has challenged before us. The learned counsel for the petitioner vehemently contended that the Tribunal committed serious error in entertaining and allowing the rectification application of the respondent. He submitted that the order of the Commissioner was not appealable before the Tribunal. The Tribunal, therefore, had no jurisdiction to pass any order in favour of the respondent.

We have no hesitation in holding that the Tribunal''s order on rectification application suffered from serious legal defect. If in the original order, the Tribunal was of the opinion that the order passed by the petitioner was not appealable, in exercise of rectification powers the Tribunal simply could not have given directions to the Commissioner to pass fresh order on the respondent''s application. In essence, the Tribunal nullified the original order of the Commissioner and directed him to pass a fresh order after hearing the respondent. The Tribunal could have done this if the appeal was maintainable. When the Tribunal was of the opinion that the appeal was not maintainable, there was no question of giving such a direction, particularly in the order on application for rectification, the Tribunal did not come to any different conclusion. In other words, without holding that the appeal was maintainable, the order under challenge could not have been interfered with.

This petition, however, involves peculiar facts. The respondent-assessee, who was a labourer and retired more than 10 years back, did not have any taxable income under normal circumstances. He had perhaps in his entire life never filed any return of income. As a part of golden hand shake, he received a lump sum amount of Rs. 1,30,000/-. The employer deducted a hefty tax at source of Rs. 33,949/-. It appears that he was entitled to refund of such tax deducted at source. Under such circumstances, he filed his return for the assessment year 2000-01. Such return was delayed. Such return is ignored on the ground that no valid return is filed. His refund of Rs. 33,949/- is withheld for the last about 10 years. It is for this purpose he prayed to the Commissioner that such delay be condoned. For the present, we are not commenting on the Commissioner''s approach while deciding such application. All that the Tribunal has in the impugned order done is to require the Commissioner to pass a fresh order. This the Tribunal was persuaded to do because in the order passed by the Commissioner u/s 119(2)(b) of the Act, he was influenced substantially by the fact that according to him, the return was belated by three years. The respondent pointed out to the Tribunal that such delay was of about one year and three months. The Commissioner had mistakenly taken into account the date of filing of the application u/s 119(2)(b) of the Act.

Only to correct the Tribunal''s order, we are simply not prepared to call the respondent before us. The man has retired in the year 2000 as a labourer. He is seeking refund of small sum of Rs. 33,949/- which for him is very substantial. Only to correct an apparent error committed by the Tribunal, we would not drag him before High Court. Even if we had issued notice and called him before us, we would have been persuaded to replace the Tribunal''s order by our order and same direction would have followed. Only to bring about some result in a correct manner, we would be wholly unjustified in asking a man of advanced age and of poor means before us. Response to a High Court notice comes at a considerable cost. In exercise of discretionary writ jurisdiction, we refuse to entertain this petition. This is the beauty of the writ jurisdiction and we would be failing in our duty, if we entertained the petition. In the result, the petition is dismissed.