1994 (3) TMI 57 - HC - Income Tax

Summary

Issues:
1. Rectification of assessments by petitioners.
2. Delay in filing applications for rectification.
3. Jurisdiction of the Central Board of Direct Taxes.
4. Opportunity of being heard before passing orders.
5. Validity of orders passed by the Board.

Analysis:
1. The petitioners, former employees of a firm, filed returns for the years 1980-81 to 1983-84, showing salary received based on a profit-sharing agreement. The Income-tax Officer disallowed part of the salary as excessive. The petitioners sought rectification of their assessments to align with the firm's assessments.
2. Applications for rectification were filed out of time, prompting the petitioners to seek condonation of the delay from the Central Board of Direct Taxes. The Board considered the matter and found no grounds for condonation, leading to a dispute over the delay and subsequent actions taken.
3. The petitioners argued that the Board had become functus officio by transferring files to the Chief Commissioner at Bangalore. However, the court found no evidence of a transfer of jurisdiction and clarified that the petitioners were only instructed to seek information, not that the files were transferred.
4. The petitioners contended that they were not afforded an opportunity of being heard before the Board passed orders. The court noted that the Income-tax Act does not mandate oral hearings for such applications and found no violation of natural justice principles.
5. The court upheld the Board's order, stating that the rectification applications were based on the same grounds previously raised and dismissed in revision by the Commissioner of Income-tax. The court found no merit in the petitioners' grievances and dismissed the original petition without costs.