Om Parkash Bhola vs Commissioner Of Income Tax
2004 Latest Caselaw 1089 Del

JUDGMENT

B.C. Patel, C.J.

1. Admit.

2. The following question of law at the instance of the assessed is required to be determined by this Court in the present appeal preferred by the assessed under Section 260A of the IT Act, 1961 (hereinafter referred to as "the Act") :

"Whether the Tribunal was correct in law in holding that the order impugned before it was rectifiable under Section 154 of the IT Act, 1961, by the CIT(A) when the order was subject-matter of an appeal before the Tribunal ?"

3. At the request of the learned counsel appearing for the parties, we are disposing of this appeal finally.

4. Against the appellate order made by the CIT(A) on 28th Jan., 1997, an appeal preferred by the Revenue (being IT Appeal No. 2013/Del/1997) for the asst. yr. 1993-94, was pending before the Tribunal at the time when the CIT(A) made an order on 4th June, 1999, under Section 154 of the IT Act. And, in view of this order it appears that the Tribunal also disposed of the said appeal by an order dt. 10th Feb., 2003.

5. By an order dt. 28th Jan., 1997, the CIT(A) disposed of the appeal finally in favor of the assessed against which the Revenue preferred an appeal as aforesaid. During the pendency of the appeal referred above, the CIT(A) in purported exercise of powers under Section 154 of the Act passed another order on 4th June, 1999, whereby the appeal preferred by the assessed was held to be invalid, although the said appeal was subject-matter of appeal before the Tribunal.

6. The AO drew the attention of CIT(A) vide letter dt. 12th Jan., 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 CIT(A) disposed of the appeal on 28th Jan., 1997, against which appeal preferred by the Revenue was pending before the Tribunal. After the appeal was decided in favor of the assessed and during the pendency of appeal before the Tribunal such request was made and the CIT(A) after long hearing by a detailed order held that the appeal was invalid and dismissed the appeal.

7. Against the said order the assessed preferred an appeal being IT Appeal No. 3648/Del/1999 which was dismissed by the Tribunal by a detailed order dt. 28th Nov., 2002, and, hence the present appeal.

8. In a case like this, the ground could have been taken before the Tribunal that appeal filed by the assessed 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 merits in view of specific language of Section 249(4)(a) of the Act.

9. 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 IT 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-section (1) of Section 143."

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

"(2) The 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 assessed or the AO."

11. Before this Court in the case of Director of IT, International Taxation v. Dumez-Sogea-Borie-Sae in Appeal No. 154 of 2003, decided on 21st Sept., 2004 the question which was framed before the Court was as under :

"Whether, on the facts and in the circumstances of the case, the Tribunal exceeded its jurisdiction by recalling the order on an application under Section 254(2) and in passing the impugned order ?"

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

"2. The decision is reported in CIT v. Vichitra Construction (P) Ltd . The question requires no more discussion 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 IT Act. Thus, what it cannot do directly, cannot be allowed to be done indirectly. If the assessed was aggrieved, it was open for him to approach 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 favor of the Revenue and against the assessed.'"

13. That was with regard to the powers to be exercised by the 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 favor of the assessed and against the Revenue. The order made by the CIT(A) under Section 154 of the Act on 4th June, 1999, and the order made by the Tribunal, on 28th Nov., 2002, Annex. 'E', passed in Appeal No. 3648/Del/1999 are set aside. It is directed that the Tribunal, which has disposed of the appeal on 10th Feb., 2003, being IT Appeal No. 2013/Del/1997 for asst. yr. 1993-94 between the same parties in respect of the order dt. 28th Jan., 1997, shall hear afresh in accordance with law.