Commissioner Of Income-Tax v. Kamal Bhai Ismailji

R.K Agrawal, J.:— The Income-tax Appellate Tribunal, Delhi has referred the following question of law under section 256(2) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for opinion to this court:

“Whether, on the facts and in the circumstances of the case, the learned Tribunal was justified in law in recalling its order dated January 31, 1984, after considering the assessee's request for adjournment on merits and also after rejecting the assessee's first miscellaneous application ?”

2. The reference relates to the assessment years 1977-78 and 1978-79.

3. Briefly stated, the facts giving rise to the present reference are as follows:

The appeals filed by the respondent-assessee in respect of the assessment years in question were dismissed by the Income-tax Appellate Tribunal, Delhi vide order dated January 31, 1984. The Tribunal had proceeded to decide the appeals ex parte after rejecting the application for adjournment. Thereafter miscellaneous applications were filed on March 19, 1984, seeking recall of the two orders dismissing the appeals filed before the Tribunal. The Tribunal, vide order dated March 27, 1984, had rejected the miscellaneous applications in the following words:

“6. We have heard the learned senior Departmental representative. The assessee is not represented despite the fact that on the last date of hearing Sri R.C Tandon, learned counsel for the assessee has made a specific note under his signatures about the date of hearing. A telegram has, however, been received (without any confirmation) requesting adjournment in I.T.A Nos. 338 and 356 (Delhi) of 1983 which request having been considered on merits, stood rejected.

4. In view of the above, since the request for adjournment was considered on the merits and rejected and since no mistake apparent from record within the meaning of section 254(2) of the Act has been pointed out and since the Appellate Tribunal has no power to review its earlier order and since we do not find any material much less reasons to exercise our inherent jurisdiction because no case has been made out for that.

The present miscellaneous applications fails and stands rejected.”

4. For the reasons best known, the assessee preferred two applications afresh seeking recall of the order dated January 31, 1984. The Tribunal heard the learned authorised representative and this time had allowed the miscellaneous applications and recalled the order dated January 31, 1984, by the following words:

“3. This time we have again heard the learned authorised representatives of the parties and we feel satisfied that the assessee could not be present and represented on the date of hearing of the regular appeals due to reasonable and sufficient cause, hence we exercise our inherent powers to do justice and accordingly recall our order dated 31st January, 1984 and direct that the appeals will come up for hearing on 23rd of May, 1985, a date which shall be notified to the assessee through his counsel as also to the learned departmental representative at the earliest.

4. Miscellaneous applications succeed and stand allowed.”

5. We have heard Sri Shambhoo Chopra, learned standing counsel for the Revenue, and Sri Vikram Gulati, learned counsel appearing for the respondent-assessee.

6. Learned standing counsel submitted that the Tribunal having rejected the miscellaneous applications for recall of the order dated January 31, 1984, vide order dated March 27, 1984, it was not open to the Tribunal to entertain the second application on the same set of facts and recalled its order dated January 31, 1984, which virtually amounted to review which power the Tribunal does not possess.

7. According to him, the only power which is available with the Tribunal is to rectify the error apparent on the record under section 254(2) of the Act and even if it is assumed that the Tribunal has inherent power to recall an ex parte order on sufficient cause having been shown, the Tribunal having declined to do so vide order dated March 27, 1984, the Tribunal was not justified in recalling the order dated January 31, 1984, on the second applications filed by the respondent-assessee.

8. Sri Vikram Gulati, learned counsel for the respondent-assessee, submitted that the Tribunal has inherent power to recall an order passed ex parte in order to prevent miscarriage of justice and to ensure that justice is done and, therefore, the order dated May 17, 1985, passed by the Tribunal recalling the earlier order dated January 31, 1984, cannot be said to be wholly without jurisdiction.

9. Having given our anxious consideration to various submissions made by learned counsel for the parties, we are of the considered opinion that even though the Tribunal has inherent power to recall an ex parte order on sufficient cause being shown by either of the parties, it has no power to review. It is well-settled that the Tribunal has no inherent power to review. The power to review has to be expressly conferred by the statute. In the present case, we find that no power of review has been conferred upon the Tribunal and only a power to rectify the mistake apparent on the record has been conferred under section 254(2) of the Act. From a perusal of the order dated March 27, 1984, reproduced above, it is clear that the Tribunal had applied its mind on the applications filed by the respondent-assessee seeking recall of the order dated January 31, 1984, and had not found the grounds sufficient for recalling its order and consequently had rejected the said applications. The order dated May 17, 1985, does not deal with any mistake having been committed by the Tribunal in the order dated March 27, 1984. On the other hand, it decided the applications de novo and recalled its order dated January 31, 1984, on the ground that the respondent could not be present on account of reasonable and sufficient cause. This virtually amounts to review of the order dated March 27, 1984, which is not permissible under law.

10. In view of the foregoing discussions, we answer the question of law referred to us in the negative, i.e, in favour of the Revenue and against the assessee. There shall be no order as to costs.