Income Tax Officer vs Income Tax Appellate Tribunal

A.K. Mathur, J.—The petitioner by this writ petition has challenged the order dated 15-10-1985 (Annexure 3) on the ground that the Tribunal, Jaipur Bench (respondent No. 1), had no jurisdiction u/s 254(2) of the income tax Act, 1961 (''the Act'') to review its own order. The respondent No. 2 is the karta of an HUF. A survey was con ducted of the premises of the assessee u/s 133A on 18-8-1979 and a number of documents and papers were seized in the business premises as well as residence of the assessee. The ITO, Special Investigation, Circle-I, Jodhpur (the petitioner), assessed the respondent No. 2 and made addition of Rs. 80,000 in the income for the assessment year 1978-79. The respondent No. 2 preferred an appeal before the AAC, Jodhpur who dismissed the appeal filed by the respondent No. 2. There after the respondent No. 2 preferred an appeal before the Tribunal. The Tribunal by its judgment dated 26-7-1984 dismissed the appeal filed by the respondent No. 2 which has been placed on record as Annexure I. Thereafter, the respondent No. 2 moved an application u/s 254(2) for rectification of the mistake. The Tribunal by its order dated 15-10-1985 allowed the miscellaneous application filed by the respondent No. 2 on the ground that the original order dated 26-7-1984, did contain mistake of facts and thereby the conclusion drawn was wrong. It was further observed that since other member was not party to the original order, therefore, the order was recalled and the matter was ordered to be disposed afresh.

Mr. Arora, the learned counsel for the petitioner, submits that the order of the Tribunal dated 15-10-1985 is beyond the scope of sub-section (2) of section 254. He submits that this is not the scope of rectification to recall the order whole hog. Mr. Mehta contested the position. On bare reading of sub-section (2) of section 254 it appears that under the garb of rectification the Tribunal cannot exercise the power of review and recall the order whole hog. There are conflicting judgments of the various High Courts on this subject. Without going into the various authorities which have been cited before me, I only need to say that a bare reading of sub-section (2) of section 254 does not empower the Tribunal to review its own order, and recall its earlier order. Thus, in the result, I allow this writ petition and set aside the order dated 15-10-1985 (Annexure 3) and remand the case back to the Tribunal to decide the rectification application in accordance with law.

No order as to costs.