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1986 (10) TMI 29 - HC - Income Tax

Issues Involved:
The judgment involves a reference u/s 256(2) of the Income-tax Act, 1961 regarding the restoration of appeals by the Tribunal which were already decided on merits.

Summary:
The assessee, a doctor, was assessed for the years 1970-71 and 1971-72 on income from salary and medical profession. Appeals were filed against the assessment orders, which were disposed of by the Appellate Assistant Commissioner with modifications. Further appeals were filed before the Tribunal, which allowed additional deductions for expenses. Subsequently, the assessee filed an application for restoration/rehearing of the appeals, which was granted by the Tribunal. The Revenue challenged this decision, leading to a reference to the High Court on the Tribunal's power to restore an appeal already decided on merits.

The Revenue contended that the Tribunal lacked jurisdiction to order a rehearing as it had no power to review its own orders. On the other hand, the assessee argued that the Tribunal had inherent powers to act in aid of justice. Legal precedents were cited by both parties to support their arguments.

The High Court analyzed the relevant rules and provisions, noting that the Tribunal is not a court and does not have the power to review its own orders. The Court highlighted the changes in the relevant rules over time and questioned the assumption of inherent powers by certain High Courts. Ultimately, the Court found that the reference itself was incompetent as it was made on an order that did not fall within the scope of the applicable sections of the Income-tax Act.

As a result, the High Court refused to answer the question of law referred to it and deemed the reference incompetent. The judgment was agreed upon by both Judges.

This judgment clarifies the limitations of the Tribunal's powers in rehearing appeals and emphasizes the necessity of adhering to the statutory provisions in making references to the High Court.

 

 

 

 

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