Om Prakash Bhola v. Commissioner Of Income-Tax

B.C Patel, C.J:— Admit.

2. The following question of law at the instance of the assessee is required to be determined by this court in the present appeal preferred by the asses-see under section 260A of the Income-tax Act, 1961 (hereinafter referred to as “the Act”):

“Whether the Income-tax Appellate Tribunal was correct in law in holding that the order impugned before it was rectifiable under section 154 of the Income-tax Act, 1961, by the Commissioner of Income-tax (Appeals) when the order was the subject-matter of an appeal before the Tribunal ?”

3. At the request of learned counsel appearing for the parties, we are dis-posing of this appeal finally. Against the appellate order made by the Commissioner of Income-tax (Appeals) on January 28, 1997, an appeal preferred by the Revenue (being I.T.A No. 2013.Delhi of 1997) for the assessment year 1993-94, was pending before the Tribunal at the time when the Commissioner of Income-tax (Appeals) made an order on June 4, 1999, under section 154 of the Income-tax Act. And, in view of this order it appears that the Tribunal also disposed of the said appeal by an order dated February 10, 2003.

4. By an order dated January 28, 1997, the Commissioner of Income-tax disposed of the appeal finally in favour of the assessee against which the Revenue preferred an appeal as aforesaid. During the pendency of the appeal referred above, the Commissioner of Income-tax (Appeals) in pur-ported exercise of powers under section 154 of the Act passed another order on June 4, 1999, whereby the appeal preferred by the assessee was held to be invalid, although the said appeal was the subject-matter of appeal before the Tribunal.

5. The Assessing Officer drew the attention of the Commissioner of Income-tax (Appeals) vide letter dated January 12, 1998, to the effect that the admitted tax on the returned income is not paid as per requirement of section 249(4)(a) of the Act much after the Commissioner of Income-tax (Appeals) disposed of the appeal on January 28, 1997, against which appeal preferred by the Revenue was pending before the Tribunal. After the appeal was decided in favour of the assessee and during the pendency of appeal before the Tribunal such request was made and the Commissioner of Income-tax (Appeals) after long hearing by a detailed order held that the appeal was invalid and dismissed the appeal.

6. Against the said order the assessee preferred an appeal being I.T.A No. 3648.Delhi of 1999 which was dismissed by the Tribunal by a detailed order dated November 28, 2002, and, hence the present appeal.

7. In a case like this, the ground could have been taken before the Tribunal that the appeal filed by the assessee was not maintainable inasmuch as, as contemplated under section 249(4) of the Act, the appeal could not have been admitted or could not have been entertained on the merits in view of the specific language of section 249(4)(a) of the Act. It may be noted that there is a complete recall of the order made by the appellate officer earlier. Section 154 of the Act reads as under:

“154. (1) With a view to rectifying any mistake apparent from the record an income-tax authority referred to in section 116 may,—

(a) amend any order passed by it under the provisions of this Act;

(b) amend any intimation or deemed intimation under sub-sec-tion (1) of section 143.”

8. Section 254(2) is also required to be considered at this juncture. Section 254(2) reads as under:

“(2) The Appellate Tribunal may, at any time within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1) and shall make such amendment if the mistake is brought to its notice by the assessee or the Assessing Officer.”

9. Before this court in the case of Director of Income-tax, International Taxation v. Dumez-Sogea-Borie-Sae in Appeal No. 154 of 2003, decided on September 21, 2004 the question which was framed before the court was as under:

“Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal exceeded its jurisdiction by recalling the order on an application under section 254(2) and in passing the impugned order ?”

10. We examined the question in para. 2 of the aforesaid judgment which reads as under:

“2. The decision is reported in Commissioner Of Income-Tax v. Vichtra Construction (P.) Ltd., [2004] 269 ITR 371, 374 (Delhi). The question requires no more dis-cussion as the same is covered by the decision and we have held as under:

‘In view of the provisions and judicial pronouncement indicated hereinabove, we are of the view that the power to rectify a mistake under section 254(2) cannot be used for recalling the entire order. No power of review has been given to the Tribunal under the Income-tax Act. Thus, what it cannot do directly, cannot be allowed to be done indirectly. If the assessee was aggrieved, it was open for him to app-roach the appropriate forum but the Tribunal could not have reviewed the entire judgment delivered by it earlier in the garb of exercising its power under section 254(2). Accordingly, the answer is required to be given in favour of the Revenue and against the asses-see’.”

11. That was with regard to the powers to be exercised by the Income-tax Appellate Tribunal. However, reading the language of sections 154 and 254, it appears that there is not much difference between the two and the same principle would apply. In view of what is stated hereinabove, the question is answered in favour of the assessee and against the Revenue. The order made by the Commissioner of Income-tax (Appeals) under sec-tion 154 of the Act on June 4, 1999, and the order made by the Tribunal, on November 28, 2002, annexure “E”, passed in Appeal No. 3648.Delhi of 1999 are set aside. It is directed that the Income-tax Appellate Tribunal, which has disposed of the appeal on February 10, 2003, being I.T.A No. 2013.Delhi of 1997 for the assessment year 1993-94 between the same parties in respect of the order dated January 28, 1997, shall hear afresh in accordance with law.