1. This is an application under Article 226 of the Constitution of India in the constitutional writ jurisdiction of this court, inter alia, for the issue of a writ in the nature of certiorari for quashing the impugned order dated May 13, 1971 made by the Income-tax Appellate Tribunal, "A" Bench, Calcutta, on the miscellaneous application of the petitioner in the I.T.As. Nos. 14078 and 14079 of 1967-68 for the assessment years 1960-61 and 1961-62 and for a direction for re-hearing the I.T.A. No. 11416 of 1967-68, I.T.A. No. 11419 of 1967-68 and I.T.A. No. 14077 of 1967-68.
2. The facts leading to the present application as stated in the petition are set out hereunder :
The petitioner is a partnership firm. One Durga Prasad Nathani carried on business under the name and style of M/s. Shew Paper Exchange with effect from January 24, 1958. After November 10, 1958, i.e., the closing date of the accounting year of the said business, the adoptive mother of Durga Prasad and Durga Prasad formed a partnership firm under the name and style of M/s. Shew Paper Exchange. Subsequently, a deed of partnership was executed on January 27, 1959, in respect of the said firm and the bank account of the said proprietary concern of M/s. Shew Paper Exchange was converted into a partnership account with effect from January 28, 1959.
The said firm was registered with the Registrar of Firms on April 18, 1959, and an application was made to the Income-tax Officer for registration of the said firm. The Income-tax Officer, "C" Ward, Dist. V(I), Calcutta, assessed the total income of the said firm as an unregistered firm by an order dated January 8, 1965. By another order of the same date respondent No. 1 refused to register the petitioner-firm under the provisions of the Income-tax Act. The respondent No. 1 rejected the contention that Smt. Gomti Devi was a partner of the firm and held that she was a mere name-lender.
3. For the assessment year 1961-62, respondent No. 1 refused again to register the said firm under the provisions of the Income-tax Act. For the aforesaid assessment years 1960-61 and 1961-62, Durga Prasad was assessed in his individual capacity by respondent No. 2.
4. Against the said order of respondent No. 1, dated January 8, 1965, refusing to register the said firm under the Income-tax Act, Durga Prasad preferred an appeal. The said appeal was dismissed by the Appellate Assistant Commissioner of Income-tax by the order dated April 26, 1967. The appeal against the order of assessment for treating the firm as the proprietary concern of Durga Prasad was also dismissed on April 26, 1967. The appeals preferred by the petitioner against the said orders of assessment for the aforesaid assessment years 1960-61 and 1961-62 were rejected by the Income-tax Appellate Tribunal, "A" Bench, Calcutta, on September 5, 1969, and thereby upheld the rejection of registration for the years 1960-61 and 1961-62.
5. As against the order of assessment made by respondent No. 2 for the assessment year 1961-62, respondent No. 1 preferred an appeal, but the Income-tax Appellate Tribunal, "E" Bench, Calcutta, by its order dated July 25, 1970, in I.T.A. No. 11419 of 1967-68, held that there was nothing to show that Smt. Gomti Devi was the benamidar of Durga Prasad in the petitioner-firm and as such the petitioner-firm, although denied registration, was rightly assessed as an unregistered firm by the Income-tax Officer.
6. In the appeal preferred by Durga Prasad in the I.T.A. No. 14077 of 1967-68 for the assessment year 1961-62, the Income-tax Appellate Tribunal, "E" Bench, Calcutta, held by its order dated July 28, 1970, that Durga Prasad was not liable to be assessed to income from the business of the partership firm as the business had been carried on by the partnership firm. The Tribunal further held that the question as to whether the petitioner was a firm or individual in Durga Prasad Nathani who carried on the business was left open in the earlier order of the Tribunal.
7. Thereafter, the Commissioner of Income-tax, West Bengal II, made a reference application under Section 256(1) of the Act before the Income-tax Appellate Tribunal in I.T.A. No. 14077 of 1967-68, for the assessment year 1961-62, on the question of law that arose as mentioned in the said application. Thereafter, the petitioner made a miscellaneous application dated March 26, 1971, in connection with the I.T.As. Nos. 14078 and 14079 of 1967-68, for the assessment years 1960-61 and 1961-62, before the Income-tax Appellate Tribunal praying for rectification of the order passed in the said appeal as, otherwise, according to the petitioner, gross miscarriage of justice would be perpetrated and continued against the petitioner. In the said application the petitioner contended, inter alia, thai the Income-tax Appellate Tribunal recorded certain findings of facts in their order dated September 5, 1969, which were wrong on the face of it because certain relevant materials were not considered by the Tribunal before making that order. In the said application the petitioner sought for rectification of the following findings:
A. That Shew Paper Exchange was originally a proprietary concern of Durga Prasad Nathani, the account of the said individual was closed on 10th November, 1958.
B. The certificate of registration granted by the Commercial Tax Officer was originally in the name of Sri Durga Prasad Nathani and the certificate was changed in favour of Smt. Gomti Devi on June 19, 1962.
C. The bank as well as the principal of the petitioner as whose agent the petitioner has been carrying on business had not beep intimated about the formation of the firm until as stated hereafter. The bank was only intimated about the formation of the firm on January 29, 1959. There is nothing to show that the principal was intimated at any time.
The said findings mentioned hereinabove were stated to be wrong on the face of it in the said petition. The petitioner prayed for reconsideration of the materials mentioned in sub-paragraphs under paragraph 3 of the said petition filed by the petitioner for such rectification. The said petition for rectification is set out in annexure "M" to the petition. The same appears from pages 93 to 101 of the petition filed herein.
9. Paragraph 4 of the said miscellaneous application states as follows :
"Your petitioner further states that the aforesaid submissions of your petitioner should be taken into consideration by the Tribunal to rectify the findings on a consideration of the materials given herewith and should allow the registration of your petitioner-firm by correcting the aforesaid findings."
The prayer portion of the said miscellaneous application was as follows :
"In the aforesaid circumstances your petitioner humbly prays that-
(a) the petitioner may be allowed to place the facts as hereinbefore stated in this petition relating to the finding in the order dated 15th September, 1969, of the Tribunal in the Income-tax Appeals Nos. 14078 and 14079 of 1967-68, and the said order may be rectified accordingly.
(b) Any other order and/or orders as are deemed fit and proper." The aforesaid findings were sought to be rectified and/or modified in the manner as found by the Tribunal itseli in certain other proceedings.
It was urged that the said findings were inconsistent with the findings in subsequent proceedings in connected cases. The Tribunal held on a consideration of the said miscellaneous application that on the facts as alleged in the said petition there was no error apparent on the face of the record so as to justify correction of the Tribunal's earlier order. The Tribunal further held that if subsequent materials or evidence were taken into account then that would be a review of the former order and not a case of rectification of the former order. The Tribunal held that it had no power to review its order. Against the said order of the Tribunal passed in the said miscellaneous application on May 13, 1971, the present writ application has been filed.
10. Dr. Debi Pal, appearing on behalf of the petitioner, contended that the Tribunal as an appellate authority was empowered to exercise all such ancillary and incidental powers which were necessary for the effective disposal of the appeal. The power of review is such an ancillary and incidental power and is inherent in the appellate power of the Tribunal. In support of this contention Dr. Pal relied on the case of Income-tax Officer v. M. K. Mohammed Kunhi, a decision of the Supreme Court. The Appellate Tribunal has not been conferred express power of stay of realisation of dues of the assessee. The Supreme Court held in the aforesaid case that, although the power of stay of recovery of tax or penalty has not been conferred expressly upon the Tribunal, the Tribunal has such power as an ancillary or incidental power necessary for the effective disposal of the appeal. The Supreme Court observed :
The right of appeal is a substantive right and the questions of fact and law are at large and are open to review by the Appellate Tribunal. Indeed, the Tribunal has been given very wide powers under Section 254(1), for it may pass such orders as it thinks fit after giving full hearing to both the parties to the appeal. If the Income-tax Officer and the Appellate Assistant Commissioner have made assessments or imposed penalties raising very large demands and if the Appellate Tribunal is entirely helpless in the matter of stay of recovery, the entire purpose of the appeal can be defeated if ultimately the orders of the departmental authorities are set aside. It is difficult to conceive that the legislature should have left the entire matter to the administrative authorities to make such orders as they choose to pass in exercise of unfettered discretion. The assessee, as has been pointed out before, has no right to even move an application when an appeal is pending before the Appellate Tribunal under Section 220(6) and it is only at the earlier stage of appeal before the Appellate Assistant Commissioner that the statute provides for such a matter being dealt with by the Income-tax Officer. It is a firmly established rule that an express grant of statutory power carries with it by necessary implication the authority to use all reasonable means to make such grant effective (Sutherland's Statutory Construction, third edition, Articles 5401 and 5402). The powers which have been conferred by Section 254 on the Appellate Tribunal with widest possible amplitude must carry with them by necessary implication all powers and duties incidental and necessary to make the exercise of those powers fully effective.
After considering the relevant passages from Maxwell on the Interpretation of Statutes, 11th edition, page 350, and certain relevant decisions on Motor Vehicles Act, it was observed by the Supreme Court that:
"Section 255(5) of the Act does empower the Appellate Tribunal to regulate its own procedure, but it is very doubtful if the power of stay can be spelt out from that provision. In our opinion, the Appellate Tribunal must be held to have the power to grant stay as incidental or ancillary to its appellate jurisdiction. This is particularly so when Section 220(6) deals expressly with a situation when an appeal is pending before the Appellate Assistant Commissioner, but the Act is silent in that behalf when an appeal is pending before the Appellate Tribunal. It could well be said that when Section 254 confers appellate jurisdiction, it impliedly grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution and that the statutory power carries with it the duty in proper cases to make such orders for staying proceedings as will prevent the appeal if successful from being rendered nugatory."
Dr. Pal next relied on the case of Income-tax Officer v. S. B. Singar Singh & Sons, a decision of the Division Bench of the Allahabad High Court, wherein it was held that:
"Even when express power to review its orders is not conferred by a statute, a court or a Tribunal has inherent jurisdiction to rectify a wrong committed by itself....."
The decision in the said case centres round the question as to whether a Tribunal had inherent jurisdiction to rectify a wrong that it had inadvertently done to the assessee by not considering a very material ground and for that reason rehearing the matter and do justice between the parties. That proposition is a corollary of a broader principle, viz., that no one should suffer by an act inadvertently or mistakenly done by the court or Tribunal. A Tribunal or a court has certainly the inherent jurisdiction of correcting a mistake or error inadvertently committed by it.
11. Dr. Pal relied on the passage appearing at page 650 of the said report which reads as follows:
"We now come to consider the second submission of Mr. Gopal Behari that a Tribunal has no inherent power even to rectify an error which it has inadvertently made to the prejudice of a party. Learned counsel contends on the basis of certain decided cases that it is only regular courts of law which are vested with such powers and not a Tribunal. On the basis of the legal maxim that no party shall suffer prejudice by an act of a court or a Tribunal, it has been held on occasions that the court or a Tribunal has inherent jurisdiction to set aside an order which it has made by committing an error itself and which has caused prejudice to a party."
But the very next paragraph of the said judgment, in my opinion, lays down the correct law on the point which is set out as under :
"It is true that the normal rule is that the remedy of review is a creature of a statute and if the statute does not contain powers for review then the power cannot be exercised. Review proceedings of this kind are those where a party as of right can apply for reconsideration of the matter already decided upon after a fresh hearing on the merits of the controversy between the parties. Such a remedy must be provided by the statute. The inherent power to rectify a wrong committed by itself, by a court or Tribunal, is not, really speaking, a power to review. It is the atonement to the wronged party by the 'court' or the 'Tribunal' for the wrong that it has itself committed. The two powers operate in different fields and are different in essential quality or nature."
In the instant case the order dated May 13, 1971, in the aforesaid miscellaneous application did not contain any error due to inadvertence or mistake of the Tribunal. Thus, the aforesaid decision, which was also followed in the case of Khushalchand B. Daga v. T. K. Surendran, 4th Income-tax Officer, [1972] 85 I.T.R. 48 (Bom.) to my mind, is of no assistance to Dr. Pal.
12. The petitioner's contention is that the Tribunal should consider and take into cognisance certain fresh evidence which was not on record before the Tribunal at the time of hearing of the said appeal. This power is not ancillary or incidental to the powers of hearing an appeal.
13. The aforesaid Supreme Court decision also, in my opinion, is not applicable to the facts and circumstances of the instant case.
14. The right of review in the circumstances as claimed by the petitioner cannot be assumed unless expressly given by statute or by rules having the force of statute: Ramachandra Maradaraj Deo Garu v. Beero Pollai, A.I.R. 1936 Mad. 531. Narayan Yeshwant Nene v. Rajaram Balkrishna Raut, , Ramnath Prasad v. State Transport Appellate Authority, .
15. For the reasons stated above, this application must fail and is dismissed. The rule nisi is discharged.
16. In the facts and circumstances of this case, I do not make any order as to costs.