In District Central Co-op bank ltd. Raisen v. Union of India, a division of the Madhya Pradesh High Court, while allowing a writ petition, held that new law of limitation providing a shorter period cannot certainly extinguish a vested right of action.
The Bank has filed an application under Section 254(2) of the Income Tax Act, 1961 stating that an appeal preferred before the Tribunal was dismissed ex-parte due to absence of authorized representative, who was not well. A restoration petition filed under section 254(2) was also dismissed since the provision provides for a limitation of six months. The time when ex parte order was passed, the limitation prescribed under section 254(2) was four years and the appellants was under the impression that their application was within limitation. To the appellant’s misfortune, section 254(4) was amended w.e.f. 1/06/2016 curtailing the limitation period from four years to six months, nullifying their existing right.
Allowing the petition, the bench noted that the amendment has been made effective virtually in case of the bank retrospectively though the amendment does not show that it is applicable with retrospective effect.
Court opined that application preferred by the bank should not have been dismissed by the Tribunal on account of the amendment. The ITAT is directed to decide the application on merits within a period of three months from the date of receipt of certified copy of this order.
Read the full text of the Order below.
