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Issues involved: Challenge to the jurisdiction of the Income-tax Appellate Tribunal under section 254(2) of the Income-tax Act, 1961 to review its own order.
In this judgment, the petitioner challenged the order dated October 15, 1985, on the grounds that the Income-tax Appellate Tribunal, Jaipur Bench, had no jurisdiction under section 254(2) of the Income-tax Act, 1961, to review its own order. The respondent, the karta of a Hindu undivided family, had been assessed by the Income-tax Officer and an addition of Rs. 80,000 was made to the income for the assessment year 1978-79. The respondent's appeal before the Appellate Assistant Commissioner was dismissed, and a subsequent appeal before the Income-tax Appellate Tribunal was also dismissed. The respondent then filed an application under section 254(2) of the Act for rectification of the mistake in the original order, which was allowed by the Tribunal on October 15, 1985, leading to the petitioner's challenge. The petitioner's counsel argued that the Tribunal's order was beyond the scope of section 254(2) of the Act, contending that the Tribunal cannot exercise the power of review and recall the order entirely under the guise of rectification. The judgment highlighted that subsection (2) of section 254 does not empower the Tribunal to review its own order and recall its earlier decision. Despite conflicting judgments from various High Courts on this matter, the Court emphasized the limitations of the Tribunal's powers under the said provision. In conclusion, the Court allowed the writ petition, setting aside the order dated October 15, 1985, and remanding the case to the Tribunal for a decision on the rectification application in accordance with the law. No costs were awarded in this matter.
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