Commissioner of Income Tax vs Mannulal Nannulal

This is an application u/s 256(2) of the income tax Act, 1961 (''the Act'') at the instance of the revenue and the following question of law has been raised :

"Whether, on the facts and in the circumstances of the case, the Hon''ble Tribunal was justified in rejecting the applicant''s application u/s 254(2) of the income tax Act, 1961, holding that the order of the Tribunal does not suffer from any mistake, apparent on the face of the record ?"

The Tribunal has taken the view, relying on the decision of this Court in case of Popular Engineering Co. Vs. Commissioner of Income Tax, , that no reference application lies to the Tribunal in case where application for rectification has been rejected by the Tribunal holding that there is no mistake apparent on the face of the record. The Tribunal has held that application u/s 256(1) is not maintainable when the Tribunal has found that there is no ground to rectify as there is no apparent mistake on the face of the record. Therefore, the Tribunal, relying on the aforesaid decision of this Court, rejected the application of the revenue for referring the case to this Court. Hence, the revenue has approached this Court u/s 256(2).

We have heard the learned counsel for the petitioner. This Court in case of Popular Engg. Co. (supra) has held as under :

"The order contemplated u/s 256(1) is the order passed u/s 254 of the Act. The order of the Tribunal u/s 254(1) may be amended u/s 254(2) for rectifying any mistake apparent from the record. If, however, the application for rectification is dismissed, there is no amendment of the order passed u/s 254(1). Where no reference is sought in respect of the appellate order passed u/s 254(1), the same becomes final in view of section 254(4) and no reference from the order rejecting an application for the rectification of any mistake is tenable u/s 256(1). The position would be different if the Tribunal amends its order for rectifying any mistake. In that case, the amended order could be the subject-matter of a reference u/s 256(1) of the income tax Act, 1961." (p. 398)

Therefore, in view of the ratio laid down by this Court in the aforesaid judgment, the application of the revenue is dismissed.

The learned counsel for the petitioner has invited our attention to the decision of the Karnataka High Court in case of Jai Bharat Enterprises Vs. Commissioner of Income Tax, , and submitted that SLP has been filed against this judgment before Hon''ble the Supreme Court. We have considered that submission also. Once this Court has taken one view of the matter, there is no justification to change the view which has stood for such a long time. The Karnataka High Court has also followed the view taken by this Court. The reference application is dismissed.