1996 (12) TMI 18 - HC - Income Tax

Summary

Issues Involved:
1. Condonation of delay in filing the restoration petition.
2. Setting aside the order of dismissal and restoring the case for rehearing.
3. Applicability of the Limitation Act to tax case references.
4. Jurisdiction and powers of the High Court under section 256 of the Income-tax Act, 1961.
5. Relevance of Supreme Court decisions and other High Court judgments in similar contexts.

Issue-wise Detailed Analysis:

1. Condonation of Delay in Filing the Restoration Petition:
The petitioner filed T.C.M.P. No. 693 of 1996 under section 151 of the Code of Civil Procedure to condone the delay of 77 days in filing the restoration petition, T.C.M.P. No. 692 of 1996. The delay was attributed to the fact that the original counsel for the assessee had either left practice or moved abroad. The petitioner learned of the case outcome through a letter from another advocate. The Supreme Court dismissed the special leave petition, allowing the petitioner to seek appropriate orders from the High Court.

2. Setting Aside the Order of Dismissal and Restoring the Case for Rehearing:
T.C.M.P. No. 692 of 1996 was filed to set aside the dismissal order in T.C. No. 1117 of 1984 and restore the case for rehearing. The court noted that the tax case had been listed for hearing multiple times, and the absence of the assessee's counsel was not justifiable. The court emphasized that the assessee should have shown diligence in engaging a new counsel for the tax case, similar to the writ petition.

3. Applicability of the Limitation Act to Tax Case References:
The court held that the Limitation Act does not apply to tax case references under section 256 of the Income-tax Act, 1961. The limitation period for filing tax case petitions is specified within the Income-tax Act itself. The court further noted that the notice under rule 6(a) in Form A of the Appellate Side Rules, 1965, clearly states that references will be heard and determined in the absence of the assessee if they fail to appear.

4. Jurisdiction and Powers of the High Court under Section 256 of the Income-tax Act, 1961:
The court clarified that under section 256, it functions in an advisory capacity to provide opinions on referred questions of law. The court cannot review its earlier decision in a tax case, as it would exceed its advisory jurisdiction. The court can either answer the question referred to it or return it unanswered but cannot recall an order once the question has been answered on its merits.

5. Relevance of Supreme Court Decisions and Other High Court Judgments:
The court examined several precedents:
- In Jaipur Mineral Development Syndicate v. CIT, the Supreme Court held that the High Court has inherent power to recall its order if sufficient reason for non-appearance is shown. However, this applies to cases where the reference was declined, not where the question was answered on merits.
- In CIT v. Bansi Dhar and Sons, the Supreme Court distinguished between incidental powers and the special jurisdiction under section 256, suggesting that incidental powers do not extend to reviewing decisions on merits.
- The Kerala High Court in K. Ahamad v. CIT allowed correction of accidental errors or omissions, but no such errors were identified in the present case.
- The Allahabad High Court in Lakshmi Industries and Cold Storage Co. (P.) Ltd. held that decisions without notice to the assessee are nullities. However, this was not applicable as the assessee had notice.

Conclusion:
The court concluded that the petitions filed under section 151 of the Code of Civil Procedure were not maintainable. The inherent powers under section 151 could not be invoked to review the earlier order passed in the tax case. The petitions were dismissed.