1991 (4) TMI 455 - AT - Income Tax

Summary

Issues Involved:
1. Validity of the assessment based on the second return filed by the assessee.
2. Compliance with section 254(3) of the Income-tax Act regarding the communication of the Tribunal's order.
3. The assessee's entitlement to relief under Article 226 of the Constitution of India.
4. The appropriateness of the miscellaneous petition under section 254(3) of the Income-tax Act.

Issue-Wise Detailed Analysis:

1. Validity of the assessment based on the second return filed by the assessee:
The assessee firm challenged the validity of the assessment on the grounds that the second return filed did not fall under section 139(5) of the Income-tax Act and was not a valid return, making the assessment void and without jurisdiction. The Tribunal allowed the appeal in part on 28-9-1984. The High Court, however, declined to grant relief under Article 226, stating that even if the assessment was illegal, the assessee was not entitled to discretionary relief under a writ petition.

2. Compliance with section 254(3) of the Income-tax Act regarding the communication of the Tribunal's order:
The main contention was whether the communication of the Tribunal's order to the assessee's counsel constituted compliance with section 254(3) of the Income-tax Act. The assessee argued that the counsel was not specifically authorized to receive orders on its behalf, and thus, the Tribunal failed to comply with the mandatory provisions. The Tribunal noted that the vakalat granted to the counsel authorized him to appear and conduct proceedings but did not explicitly include receiving orders. However, the Tribunal found that the counsel's name and address were provided in the memorandum of appeal for communication purposes.

3. The assessee's entitlement to relief under Article 226 of the Constitution of India:
The High Court held that the assessee was not entitled to relief under Article 226 as the assessment, even if illegal, did not warrant discretionary relief. The High Court also declined the alternative prayer to direct the Tribunal to deliver the order to a competent person on behalf of the assessee, as this was a mixed question of fact and law, not a pure question of law.

4. The appropriateness of the miscellaneous petition under section 254(3) of the Income-tax Act:
The Tribunal examined whether the miscellaneous petition under section 254(3) was appropriate given that the assessee had already received the order from its counsel. The Tribunal noted that the assessee pursued a writ petition instead of filing a reference application and now sought to fall back on the reference application remedy to circumvent the limitation period. The Tribunal found that the assessee's negligence in seeking the appropriate remedy could not be excused. The Tribunal also distinguished the case from other cited judgments, noting that the facts were not analogous, particularly since the assessee had provided the counsel's address for communication in the memorandum of appeal.

Conclusion:
The Tribunal concluded that the intent and purpose of section 254(3) were fulfilled as the assessee had received the order through its counsel and had taken further legal action based on that order. The Tribunal dismissed the miscellaneous petition, holding that the provisions of section 254(3) had been complied with and no further action was required.