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2012 (4) TMI 376 - HC - Income TaxReview of the orders passed by the Division Bench - invoking sub-section (7) of Section 260A Held that - There is distinction between substantive review and procedural review. Substantive review must be conferred whereas procedural review is inherent in every court or Tribunal - since the power of substantive review having not been conferred under the Income-tax Act, the review as filed is not maintainable - Division Bench Judgment of this Court in the case of Commissioner of Income Tax-1 v. M/s. The West Coast Paper Mills Ltd (2009 - TMI - 75400 - BOMBAY HIGH COURT) stated that sub-section (7) of Section 260A makes the procedure pertaining to an Appeal, as set out in the Code of Civil Procedure, 1908 and these provisions will not enable the Court to review its own order or exercise the power of review in terms of Section 114 - the power of review has to be specifically conferred and it cannot be assumed by the Court against revenue.
Issues Involved:
1. Maintainability of the review applications under sub-section (7) of Section 260A of the Income Tax Act, 1961. 2. Distinction between procedural review and substantive review. 3. Applicability of the Code of Civil Procedure (CPC) provisions to appeals under Section 260A of the Income Tax Act, 1961. Detailed Analysis: 1. Maintainability of the Review Applications: The primary issue was whether the review applications filed by the Revenue were maintainable under sub-section (7) of Section 260A of the Income Tax Act, 1961. The Court noted that the Division Bench had previously determined that the power of review must be specifically conferred and cannot be assumed by the Court. The Court relied on the precedent set in Commissioner of Income Tax-1 v. M/s. The West Coast Paper Mills Ltd., which held that sub-section (7) of Section 260A does not confer the power of substantive review. The Court emphasized that the power of review is distinct from the power of recall, and the procedural provisions applicable to appeals do not inherently include the power of substantive review. 2. Distinction Between Procedural Review and Substantive Review: The Court discussed the difference between procedural and substantive review. Procedural review allows a court to correct inadvertent errors, clerical mistakes, or procedural defects to prevent abuse of the court's process. Substantive review, on the other hand, involves reconsidering a decision on its merits and must be explicitly conferred by statute. The Court cited the Supreme Court's decision in Grindlays Bank Limited v. Central Government Industrial Tribunal to underline this distinction. The Court concluded that while procedural review is inherent, substantive review requires explicit statutory provision, which is absent in Section 260A of the Income Tax Act, 1961. 3. Applicability of CPC Provisions to Appeals Under Section 260A: The Court examined the applicability of the CPC provisions to appeals under Section 260A. Sub-section (7) of Section 260A states that the provisions of the CPC relating to appeals to the High Court shall apply as far as may be. The Court interpreted this to mean that only the procedural aspects of the CPC are applicable, not the substantive powers of review. The Court noted that Section 114 of the CPC, which deals with the power of review, falls under Part VIII of the CPC, which is distinct from the provisions relating to appeals. The Court concluded that the procedural rules under Orders XLI, XLII, and XLIII of the CPC do not encompass the substantive power of review. Conclusion: The Court held that the review applications filed by the Revenue were not maintainable under sub-section (7) of Section 260A of the Income Tax Act, 1961. The Court emphasized that the power of substantive review must be explicitly conferred by statute, which is not the case here. The Court dismissed the review applications without any order as to costs, adhering to the binding precedent set by the Division Bench in Commissioner of Income Tax-1 v. M/s. The West Coast Paper Mills Ltd.
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