WPMB/18/2023
2023 Latest Caselaw 919 UK

    IN THE HIGH COURT OF UTTARAKHAND
               AT NAINITAL
          HON'BLE THE CHIEF JUSTICE SRI VIPIN SANGHI
                             AND
            HON'BLE SRI JUSTICE ALOK KUMAR VERMA

                              05TH APRIL, 2023

         WRIT PETITION (M/B) No. 18 OF 2023

Between:

M/s GEE CEE Metals Private Limited (AOP).
                                                             ...Petitioner

and

Principal Commissioner, Income
Tax and others.                                          ...Respondents

Counsel for the petitioner. : Mr. Ravi Sehgal and Mr. Rohit Arora, learned counsels.

Counsel for the respondents. : Mr. Hari Mohan Bhatia, learned counsel.

JUDGMENT : (per Sri Vipin Sanghi, C.J.)

The petitioner has preferred the present Writ

Petition to seek the following reliefs :-

"a. Issue a writ, order or direction, in the nature of mandamus directing the Respondents to allow the credit of the Tax Deducted at Source ('TDS') amounting to Rs. 14,61,201/- pertaining to the A.Y. 2008-09 to the Petitioner deducted by the Executive Engineer, Rural Electrification Division, Raniket under the incorrect PAN AACCG5304J which is now being reflected under the correct PAN AAAAG5553D of the Petitioner after the revision of the TDS Statement done by the Executive Engineer, Rural Electrification Division, Haldwani (Ranikhet Division got merged with Haldwani Division);

b. Issue a writ, order or direction, in the nature of certiorari quashing the impugned Order dated 18/02/2022 (ANNEXURE NO. -2) issued by the Respondent No-1 under section 119(2)(b) of the Income Tax Act, 1961;

c. Issue a writ, order or direction, in the nature of mandamus directing the Respondents to allow the Petitioner to rectify its Income Tax return qua the TDS amounting to Rs. 14,61,201/- now being reflected under the correct PAN AAAAG5553D of the Petitioner after the revision of the TDS Statement done by the Executive Engineer, Rural Electrification Division, Haldwani (Ranikhet Division got merged with Haldwani Division) ;

d. Issue a writ, order or direction, in the nature of certiorari quashing or reading down the time limit of six years as mentioned in the clause No. 3 of the Circular No. 09/2015 dated 09.06.2015 (ANNEXURE NO. 1);

e. Issue a writ, order or direction, in the nature of certiorari quashing the Grievance filed on 11/08/2020 and closed on 21/02/2021 (ANNEXURE NO. 6)

f. Issue any other writ, order or direction and /or allow any other consequential relief as expedient in law, on the facts and circumstances of the case."

2. The case of the petitioner is that the petitioner

is an Association of Persons (AOP). The petitioner had

applied for, and obtained the PAN Number in respect of

the said Association of Persons. Petitioner states that

the petitioner was issued PAN No. AACCG5304J. The

said PAN Number related to a company, and not to an

Association of Persons. Petitioner states that due to the

said error in issuance of the PAN Card, TDS of the

amount of Rs. 14,61,201/-, deducted by the

Uttarakhand Power Corporation Limited, Ranikhet - for

whom the petitioner performed a contract, was not

reflected in Form 26AS in the new PAN No.

AAAAG5553D, which the petitioner obtained as an

Association of Persons.

3. Petitioner further states that the petitioner

requested for cancellation of the old PAN Number on

19.06.2008, since the petitioner had obtained a new

PAN Number as an Association of Persons. It appears

that, thereafter, there was a complete lull on the part of

the petitioner, and the petitioner woke up only in the

year 2020, and sought to take action for reflection of the

TDS deducted, amounting to Rs. 14,61,201/-, against

the new PAN Number obtained by the petitioner in the

year 2008 itself. Petitioner states that the Income Tax

Authorities have also reflected the aforesaid TDS amount

against the new PAN Number of the petitioner, as an

Association of Persons. The petitioner, then, applied for

rectification of the Assessment Order under Section

143A of the Income Tax Act. However, the said

application has not been entertained on the ground that

the application for rectification had been filed beyond the

period of limitation, and even beyond the period for

which the application for condonation of delay could be

entertained, which was six years from the end of the

Assessment Year, for which the application/ claim is

made. The order dated 18.02.2022, passed by

respondent no. 1, reads as follows :-

"ORDER U/S 119(2)(b) OF THE I.T. ACT, 1961

The assessee has submitted application on 09.07.2021 for granting permission u/s 119(2)(b) of the Income Tax Act, 1961 for A.Y 2008-09 and claiming refund.

In this regard, it is to state that as per Circular 9/2015 (F.No.312/22/2015-OT) dated 09.06.2015 of the Hon'ble CBDT, New delhi stated in SL. No. 3 that "No condonation application for calm of refund/loss shall be entertained beyond six years from the end of the assessment year for which such application/claim is made."

The application of the assessee is not covered by the aforesaid CBDT's circular, being beyond six years from the end of the assessment year for which application has been filed."

4. Since the petitioner was not covered by the

aforesaid Circular No. 9/2015 dated 09.06.2015, and

that came as a stumbling block in the petitioner seeking

condonation of delay beyond the period of six years from

the end of the Assessment Year pertaining to which the

application/ claim was made, the petitioner has assailed

the said Circular as well, in this Writ Petition. The

relevant clause of Circular No. 9/2015, which the

petitioner assails, reads as follows :-

"3. No condonation application for claim of refund/loss shall be entertained beyond six years from the end of the assessment year for which such application/claim is made. This limit of six years shall be applicable to all authorities having powers to condone the delay as per the above prescribed monetary limits, including the Board. A condonation application should be disposed of within six months from the end of the month in which the application is

received by the competent authority, as far as possible."

5. The submission of learned counsel for the

petitioner is that the said Circular No. 9/2015 has been

issued by the Central Board of Direct Taxes in exercise

of its powers vested under Section 119(2)(b) of the

Income Tax Act. Sub-section (1) of Section 119 of the

Income Tax Act authorizes the Board to issue such

orders, instructions and directions to other income-tax

authorities, as it may deem fit for the proper

administration of the Act, and the income-tax authorities

are bound to follow the said orders, instructions and

directions. Sub-section (2) of Section 119, insofar as, it

is relevant, reads as follows :-

"(2) Without prejudice to the generality of the foregoing power,-

                (a)        ............

                (b)        the Board may, if it considers it desirable

or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order, authorize any income-tax authority, not being a Commissioner (Appeals) to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law;"

6. Learned counsel for the petitioner submits

that Section 119(2)(b) of the Income Tax Act authorizes

the Board to issue orders to the Income Tax Authorities

to entertain remedies available under the Act, by way of

application or claim for any exemption, deduction,

refund, or any other relief beyond the period of

limitation. However, the same does not permit the

Board to lay down an outer-limit of time, during which

such application for condonation of delay may be

entertained. Learned counsel submits that, by

prescribing the outer-limit of six years, under Clause 3

of the Circular No. 9/2015, the Board has exceeded its

statutory power. Learned counsel further submits that

the petitioner would be put to grave hardship, since the

said amount of Rs. 14,61,201/-, which constitutes the

working capital of the petitioner, would remain locked

up, and will not be available to the petitioner to claim

credit, for no fault of the petitioner.

7. We have considered the aforesaid submissions

of learned counsel for the petitioner, and do not find any

merit in the same.

8. When Section 119(2)(b) of the Income Tax

Act authorizes the Board to issue instructions, directions

or orders to the Income Tax Authorities to admit an

application, or claim for any exemption, deduction,

refund, or any other relief under the Act after the expiry

of the period of limitation specified by or under the Act,

along with the said power goes the power to prescribe

the conditions, upon which such delayed applications

may be entertained. Since the petitioner sought

condonation of delay by resort of the very same Circular

No. 9/2015, the petitioner has to accept the conditions

prescribed in the said circular for entertainment of

application seeking condonation of delay. Therefore, it

is not correct for the petitioner to contend that the

Board has no power to lay down an outer-limit of

limitation, during which period an application for

condonation of delay may be entertained.

9. The rectification application could be filed by

the petitioner within four years of the expiry of the

Assessment Year. Admittedly, the petitioner did not do

so. By resorting to Clause 3 of Circular No. 9/2015, the

petitioner could have sought condonation of delay, in

moving the rectification application by another two

years. The petitioner did not file the rectification

application either within the period of limitation, or even

within the period for which the delay could be condoned,

i.e. up to six years. The petitioner moved the

rectification application only in the year 2021, i.e. after

over 12 years.

10. It is well settled that, with the expiry of

limitation, the law bars the remedy even if the right is

not extinguished. Therefore, the right of the petitioner,

to avail of the remedy of rectification, stood barred by

the law of limitation. The petitioner has only itself to

blame for not availing of the remedy available to it

within the period of limitation, or even within the period

during which the application for condonation of delay

could be entertained.

11. For the aforesaid reasons, we find no merit in

this Writ Petition. The same is, accordingly, dismissed.

12. Consequently, pending applications, if any,

also stand disposed of.

________________ VIPIN SANGHI, C.J.

___________________ ALOK KUMAR VERMA, J.

Dt: 05th April, 2023 Rahul