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Issues Involved:
1. Legality and jurisdiction of the Tribunal's order dated April 29, 1991, u/s 254(2) of the Income-tax Act. 2. Preliminary objection regarding the availability of an alternative remedy u/s 256(1) of the Income-tax Act. Summary: Issue 1: Legality and Jurisdiction of the Tribunal's Order u/s 254(2) The petitioners sought a writ of certiorari to quash the Income-tax Appellate Tribunal's order dated April 29, 1991, which recalled its earlier order dated September 13, 1990. The Tribunal had allowed the second respondent's application u/s 254(2) on the grounds that it had not recorded findings on a point raised during the hearing, which was deemed a "mistake apparent from the record." The court examined whether this constituted a valid exercise of jurisdiction u/s 254(2). The court held that the Tribunal's power to rectify mistakes u/s 254(2) is limited to obvious and patent mistakes, not those requiring extensive argument or re-evaluation of evidence. The court found that the second respondent's application sought to review or rewrite the Tribunal's order rather than rectify a clear mistake. Consequently, the Tribunal exceeded its jurisdiction by recalling its previous order for rehearing. Issue 2: Preliminary Objection Regarding Alternative Remedy u/s 256(1) The second respondent argued that the impugned order could be the subject of a reference u/s 256(1) of the Income-tax Act, thus precluding the need for a writ petition. The court considered whether a reference u/s 256(1) was an appropriate remedy for an order passed u/s 254(2). The court dismissed the preliminary objection, stating that a reference u/s 256(1) pertains to final orders made u/s 254(1) or amended orders u/s 254(2). The impugned order, being an order to recall and rehear, did not qualify as a final order subject to reference. Therefore, the writ petition was maintainable. Conclusion: The court quashed the Tribunal's order dated April 29, 1991, and restored the order dated September 13, 1990. The Tribunal was interdicted from passing any further orders on the second respondent's application u/s 254(2). The petitioners' request for leave to appeal to the Supreme Court was rejected as the case did not involve any question of law of public importance.
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