Top Stories Bombay HC directs Disciplinary Action against AO as no Order passed on Rectification Application under Income Tax Act for Six Years [Read Order] Bombay HC orders Disciplinary Action against AO as no order passed on rectification application under Income Tax Act for 6 Years By Kalyani B. Nair – On April 22, 2024 12:41 pm – 2 mins read The Bombay High Court directed disciplinary action against the Assessing Officer ( AO ) as no order was passed on the rectification application under the Income Tax Act, 1961 for six years.

The Petitioner has approached the Court alleging that non disposal of petitioner’s application filed under Section 154 of the Income Tax Act 1961 (the Act) amounts to unreasonable and unlawful refusal by respondent no. 1 to exercise statutory powers vested in it and the violation of its statutory duty to decide applications for rectification of mistakes apparent from the record under Section 154 of the Act. Respondent no.1 has failed to pass orders on the application for rectification filed by petitioner despite numerous reminders being issued by petitioner. According to petitioner, an error committed by a professional engaged by petitioner should not be held against petitioner.

According to the counsel for the petitioner submitted that the objective of the Income Tax Act is not to penalize an assessee for such technical/ inadvertent error and deny benefits of statutory provisions. The counsel submitted no unfair advantage has been obtained by petitioner on account of this inadvertent error. Therefore, the inadvertence/ oversight in uploading Form No. 10CCB by the auditor/ the Chartered Accountants of petitioner were circumstances beyond the control of petitioner and would constitute a reasonable cause for not uploading Form No.10CCB along with the return of income. The Petitioner’s application under Section 264 of the Income Tax Act came to be dismissed on the ground that petitioner had not applied for revision within the limitation time prescribed and there was a delay of about 2 and ½ years. Since the application under Section 264 of the Income Tax Act was rejected without deciding on merits, petitioner continued to pursue the pending rectification application. According to petitioner, till date no decision has been taken by respondent no.1 on the rectification application filed by petitioner under Section 154 of the Income Tax Act, though almost 6 years have passed since the same was filed.

A Division Bench of Justices Dr Neela Gokhale and KR Shriram observed that “In our view, legislature has conferred power on respondent no.3 to condone the delay to enable the authorities to do substantive justice to the parties by disposing the matter on merits. Routinely passing the order without appreciating the reasons why the provisions for condonation of delay has been provided in the act, defeats the cause of justice.” “Respondent no.1 was duty bound to pass orders on the application which has been pending for almost 6 years, instead of making such baseless statements in the affidavit in reply. Perhaps, respondent no.1 thinks that he or she is not accountable to any citizen of this country. Copy of this order shall be placed before the PCCIT to take disciplinary action against respondent no.1 for dereliction of duty” the Court noted