1994 (5) TMI 21 - HC - Income Tax

Application For Reference High Court Power To Recall Order Reference Application Writ Petition

Summary

Issues involved:
The correctness of orders of the Income-tax Appellate Tribunal under section 254(1) and 256(1) of the Income-tax Act, 1961, regarding the computation of limitation for filing reference applications.

Judgment Summary:

Issue 1: Computation of limitation for filing reference applications under section 256(1)

In the case related to the assessment year 1983-84, the Tribunal dismissed the Department's appeal under section 254(1) on September 26, 1989. The Department filed a reference application under section 256(1), which was later dismissed as time-barred on August 27, 1990. The Department sought to recall this order based on a decision of the High Court. The Commissioner of Income-tax contended that the limitation should start from the date of receipt of the Tribunal's order by the specific Commissioner. The Court held that the petitioner's delay of nearly three years in questioning the orders was unjustified, leading to the dismissal of the writ petitions due to laches.

Issue 2: Rectification or recall of orders under section 256(1)

The Commissioner of Income-tax argued that the Tribunal could rectify its order under section 256(1) using inherent powers, citing precedents regarding rectification under section 254(2). However, the Court clarified that there is no provision for rectification under section 256, and inherent powers cannot be used to recall an order under section 256(1) based on subsequent decisions. The Court emphasized that the Commissioner's delay in seeking remedy further weakened their case, resulting in the dismissal of the writ petitions.

Conclusion:

The Court dismissed the writ petitions due to the Commissioner of Income-tax's significant delay of nearly three years in challenging the Tribunal's orders, highlighting the lack of justification for the prolonged inaction. The Court emphasized that even the alternative arguments regarding rectification or recall of orders under section 256(1) were not valid due to the absence of legal provisions supporting such actions. The dismissal was based on the grounds of serious laches and failure to act promptly after prior rejections, ultimately leading to the rejection of the petitions.