Union of India vs Income Tax Appellate Tribunal, Jaipur Bench and Another

Ashok Kumar Mathur, J.—This writ petition is directed against the order (Annx. 5) passed by the Income Tax Appellate Tribunal, Jaipur Bench, Jaipur dated 15-11-1985.

The respondent No. 2 assessee is a contractor. He received total payment of Rs 7,72,226/- and 9,70,902/- and disclosed net profit of Rs. 68582/-and Rs. 9,7010/- for two years, i.e. 1980-81 and 1981-82 respectively. Since the respondent No. 2 did not maintain proper books of accounts and as such profits could not be accepted and the Income Tax Officer invoked provisions of Section 145. He applied net profit rate of 12.5% in 1980-81 and 12% in 1901-82and passed the orders of assessment accordingly. The respondent No. 2 aggrieved against these orders preferred an appeal before the Appellate Assistant Commissioner who by his order dated 4-2-1984 after considering the arguments held that rate of 12% in both the years is reasonable. Aggrieved, against this order, the respondent No. 2 preferred an appeal before the Income Tax Appellate Tribunal, Jaipur (here in after referred to as ''the Tribunal''). The learned members of the Tribunal vide its orders dated 28-6-1985'' (Annx. 5) allowed appeal No. 250 and dismissed appeal No. 251 filed by respondent No. 2. Thereafter, the assessee moved a miscellaneous application u/s 254(2) of the Income Tax Act, 1961 for rectification of mistake. The application came up for consideration before the same bench and the bench allowed the application and recalled its earlier order and proceeded with the hearing of the case afresh. It is this order which has been sought to be challenged on the ground that the respondent No. 1 had no jurisdiction for proceeding to hear this matter afresh after they have disposed of the appeals.

In some what similar circumstances a writ petition was filed by the department and it has been held in Income Tax Officer, Special Investigation, Circle-I. Jodhpur v. Income Tax Appellate Tribunal, Jaipur Bench, Jaipur and another (S.B. Civil Writ Petition No. 223 of 1986 decided on May 7, 1986) that under Sub-section (2) of Section 254 for rectification of mistake the whole order cannot be reviewed and recalled. In view of