Principal Commissioner of Income-Tax vs Income-Tax Appellate Tribunal

The Revenue claims to be aggrieved by the direction of the Income Tax Appellate Authority (ITAT) with respect to a previous order passed under Section 127. It contends that having regard to the presumptive nature of Section 124 in the given facts of the case, the Tribunal could not have examined the existence of the said order in view of its limited jurisdiction. The record disclosed that the ITAT had directed, on several hearings, prior to issuance of the impugned order requiring production of the file and especially the order made under Section 127 of the Income Tax Act, 1961. Apparently, the Revenue also rejected an RTI query that was filed on behalf of the assessee. The Revenue''s contention that the ITAT''s bye-laws are limited and cannot examine the existence of the order given the nature of Section 124 is unpersuasive. As an appellate body, it certainly can call for the records and examine the existence of the order. That is, however, entirely different from the effect of Section 124 which may bring forward the effect of such order. In other words, existence of the order which is the basis of an assessment can certainly be looked into by the ITAT as an appellate body. This may be done even though the effect of such order on account of Section 124 and a further enquiry into its legality may or may not be available. With this clarification, the Court is of the opinion that no substantial question of law arises. The writ petition is accordingly dismissed.