1994 (11) TMI 43 - HC - Income Tax

Original Assessment Power To Admit Additional Ground Powers Of Tribunal Rectification Proceedings

Summary

Issues:
1. Admission of additional ground challenging jurisdiction of Income-tax Officer.
2. Tribunal's decision on preliminary ground and appeal merits.
3. Mistake apparent from record for double taxation relief.
4. Nature of order under section 154 and 49D/91(1) of Income-tax Act.
5. Competency of Income-tax Officer to pass order correcting mistake.

Analysis:
The High Court of Bombay addressed a reference under section 256(1) of the Income-tax Act, 1961, concerning various questions raised by the Income-tax Appellate Tribunal. The case involved the admission of additional grounds challenging the jurisdiction of the Income-tax Officer, the Tribunal's decision on preliminary grounds versus appeal merits, the mistake apparent from the record for double taxation relief, the nature of orders under sections 154 and 49D/91(1) of the Income-tax Act, and the competency of the Income-tax Officer to correct mistakes.

The controversy revolved around the powers of the Tribunal to admit additional grounds of appeal, which was settled by a Full Bench decision. The Court affirmed the Tribunal's decision to admit the additional grounds and ruled in favor of the Revenue. The Court also addressed the powers of the Income-tax Officer under section 154 to allow relief under sections 49D and 91(1) of the Income-tax Act. It emphasized that rectification under section 154 is limited to mistakes apparent from the record and cannot be based on new evidence or materials not part of the original record.

Regarding the claim for double taxation relief, the Court held that the Income-tax Officer was justified in rejecting the claim as the necessary evidence was not before him during the assessment. The Court emphasized that the power of rectification is restricted to rectifying patent or glaring mistakes evident from the record at the time of assessment. Therefore, the Court ruled in favor of the Revenue on this issue.

The Court clarified that there was no controversy in question four, as the order sought to be rectified was an order of assessment under section 143(3) and not under section 49D or 91(1) of the Act. Question five was not pressed and hence not answered. The reference was disposed of accordingly, with no order as to costs.

In conclusion, the High Court of Bombay provided a detailed analysis of the issues raised in the reference under the Income-tax Act, emphasizing the limitations of rectification powers and the importance of evidence being part of the original record for claims of relief. The judgment clarified the scope of rectification under section 154 and affirmed the decisions made by the Tribunal and the Income-tax Officer in this case.