In a recent ruling, the division bench of the Bombay High Court quashed the order of the ITAT passed with a delay of more than 90 days and held that the delay cannot be justified on ground of “administrative clearance.”
The bench comprising of Justice M.S Sanklecha and Justice A.K Menon was hearing a writ petition challenging the order dismissing a rectification application by the Tribunal after a delay of more than 90 days. Based on Rule 34(5)(c) of the Income Tax Appellate Tribunal Rules, 1963 and the Bombay High Court decision in Shivsagar Veg. Restaurant v/s. ACIT, the petitioner urged that the order should have been passed within 90 days of the conclusion of hearing and the delay is not justifiable.
The bench noted that the Tribunal on passing the order does not dispute the fact that there is delay beyond 90 days. It was further noted that the reason for the delay was administrative clearance. Furthermore, the Respondent was unable to substantiate the reason for such delay.
“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.” Accordingly, the order of the Tribunal was quashed.
Read the full text of the Order below.
