2005 (4) TMI 6 - HC - Income Tax

Recalling the earlier order on the ground that assessee could not be present on account of reasonable cause amounts to review of the earlier order Such review is not valid because tribunal has no power to review.

Summary

Issues:
1. Interpretation of the Tribunal's power to recall an order.
2. Application of inherent powers to prevent miscarriage of justice.
3. Reviewing a decision by the Tribunal.

Analysis:
1. The judgment pertains to a reference made by the Income-tax Appellate Tribunal, Delhi to the High Court regarding the justification of recalling an order dated January 31, 1984, after considering the assessee's request for adjournment and rejecting the first miscellaneous application. The Tribunal initially rejected the applications seeking recall of the order but later allowed them, leading to a question on the Tribunal's authority to recall its order. The High Court analyzed the Tribunal's powers under section 254(2) of the Income-tax Act, 1961, emphasizing that while the Tribunal can rectify mistakes apparent on the record, it does not possess inherent power to review its decisions.

2. The High Court deliberated on the concept of inherent powers of the Tribunal to prevent miscarriage of justice. The respondent assessee argued that the Tribunal's decision to recall the order was necessary to ensure justice. However, the High Court highlighted that while the Tribunal can recall an ex parte order upon showing sufficient cause, it cannot review its decision without statutory authorization. The judgment emphasized the distinction between rectifying mistakes and reviewing decisions, asserting that the Tribunal's power is limited to rectification based on the statute.

3. The judgment addressed the issue of reviewing a decision by the Tribunal. The respondent assessee contended that the Tribunal had the inherent power to recall the order to prevent injustice. Conversely, the Revenue argued that the Tribunal's act of recalling the order amounted to reviewing, which was beyond its jurisdiction. The High Court concluded that the Tribunal's action in recalling the order based on new grounds was akin to reviewing its earlier decision, which contravened the statutory limitations on the Tribunal's authority. Consequently, the High Court ruled in favor of the Revenue, emphasizing that the Tribunal's power is restricted to rectification and not review, as explicitly provided by the law.