The limitation would begin to run when the affected person has the knowledge of the decision. The date when the order was passed cannot be solely determined by referring to the date when the same was signed by the ITAT. It was further found that under Section 254 (3) of the Act, the law stipulates that the ITAT shall send a copy of the order passed by it to the assesses and the Principal Commissioner. Rule 35 of the ITAT Rules also requires that the orders are required to be communicated to the parties was stated in the case of Pacific Projects Limited V. Asstt. CIT [W.P. (C) 2080/2020 & CM APPLs.7346-7347/2020]
Hon’ble Mr. Justice Manmohan Hon’ble Mr. Justice Sanjeev Narula stated that Section 254(2) of the Act has undergone certain amendments. However, there is no dispute that the provision still retains the distinctive two parts as observed by the Supreme Court. It emerges that the Section and the Rule mandates the communication of the order to the parties. Thus, the date of communication or knowledge, actual or constructive, of the orders sought to be rectified or amended under Section 254(2) of the Act becomes critical and determinative for the commencement of the period of limitation.
The writ petition has been filed challenging the order dated 29th July, 2019 passed by the ITAT dismissing the miscellaneous application filed by the petitioner/assessee under Section 254(2) for recall of the ex-parte order dated 01st. The ITAT in its order dated 29 September, 2017 whereby the matter was remanded to the Assessing Officer to decide the matter afresh after examining all documents, including additional evidences as well as books of accounts, bills and vouchers, etc.
The appellant/assessee that it had changed its address and shifted to 301-307, 3rd Floor, Plot No. 9, DDA Service Centre, Rohini, Delhi-110085 from Safeway House, D-4, Commercial Complex, Prashant Vihar, New Delhi-110085 w.e.f. 15th November, 2008 and this fact had been mentioned in the appeal filed by the assessee in Form No. 35 against the order dated 02nd 4. On the last date of hearing, learned counsel for the respondent had taken time to obtain instructions. December, 2018 passed by the DCIT, Circle 14(1) New Delhi.
This Court is also of the view that the ITAT has erroneously concluded that the miscellaneous application filed by the petitioner was barred by limitation under Section 254(2) of the Act inasmuch as the petitioner had filed the miscellaneous application within six months of actual receipt of the order. If the petitioner/assessee had no notice and no knowledge of the order passed by the ITAT, it cannot be said that the limitation would start from the date the order was pronounced by the Tribunal.
The court held that “the course adopted by the ITAT at the first instance, by dismissing the appeal for non-prosecution, and then compounding the same by refusing to entertain the application for recall of the order, cannot be sustained.”
Moreover, the order dated 29th July, 2019 was quashed.