2017 (8) TMI 122 - HC - Income Tax

Entitlement for refund - locus of the present petitioner - change in the parties to contract - Held that - Held that - The appeal filed by the present appellant is on doubted preposition of law and the second principle of the Income-tax Act, the petitioner/appellant as contended by him if he is assessee should have preferred an appeal since he was entitled for refund amount which was their claim under the Income-tax Act. Now, having succeeded before the Commissioner of Income-tax (Appeals) and after the observations made by the Tribunal that Tahal Consulting Engineers Ltd. is not entitled for refund to come in the proceedings at a belated stage are never contemplated by any law therefore, impugned proceedings at a very belated stage is not known to any proceedings. In that view of the matter, the writ or appeal by the assessee should not be accepted and we are of the opinion that it will not be healthy practice inasmuch as otherwise the other side will take advantage and will add any assessee at any stage treating this precedent having liability to the assessee under the judgment which has been cited in favour of the assessee. The law has to be assumed for both the sides while refunding or referring to the taxing statute. In that view of the matter, if the imposition of tax is not referred in the taxing statute, it should not apply even in the case of refund. In that view of the matter, for the consistency of law, we are of the opinion that the parties should be continuously joined all throughout proceedings. -Decided against the assessee.

Summary

Issues:
1. Refusal to rectify order by the Income-tax Appellate Tribunal.
2. Locus standi of the appellant to move application under section 254(2) of the Income-tax Act.
3. Typographical and clerical errors in the Tribunal's order.

Analysis:

Issue 1: Refusal to Rectify Order
The appellant challenged the Tribunal's order allowing the Revenue's appeal and setting aside the Commissioner of Income-tax (Appeals) order in favor of the original assessee, Tahal Consulting Engineers Ltd. The High Court framed the issue of whether the Tribunal was justified in refusing to rectify its earlier order. The Court examined the provisions of section 254(2) and section 260A, emphasizing the need for correcting apparent mistakes on record. The Counsel for the appellant argued that the Tribunal should have corrected the mistake and referred the question in favor of the appellant. However, the respondent contended that the original assessee had accepted the Assessing Officer's order, invoking the principles of acquiescence and waiver. The Court held in favor of the Department, dismissing the appeal.

Issue 2: Locus Standi of the Appellant
The Court addressed the issue of whether the appellant had the necessary locus standi to move an application under section 254(2) of the Income-tax Act. The Counsel for the appellant argued that the appellant should be regarded as an agent of Tahal Consulting Engineers Ltd. under relevant sections of the Act. The respondent countered that the appellant could not substitute itself for the original assessee and that only one assessee could exist for the same assessment year. The Court emphasized the importance of adhering to precedent years and concluded that the appellant was not a party to the earlier proceedings, thus dismissing the appellant's appeal.

Issue 3: Typographical and Clerical Errors
The Court also considered the issue of typographical and clerical errors in the Tribunal's order and the direction to the Revenue to proceed in the name of Tahal Consulting Engineers Ltd. The respondent argued against the removal of errors, citing the acceptance of the Assessing Officer's order by the present appellant. The Court found in favor of the Department, stating that the appeal and writ petition were misconceived and deserved dismissal. It emphasized the need for consistency in legal proceedings and the continuous involvement of parties throughout the process for a fair application of the law.

In conclusion, the High Court ruled in favor of the Department and against the assessee, dismissing the appeal and the writ petition as misconceived. The judgment highlighted the importance of precedent, the correct interpretation of legal provisions, and the consistent application of the law in tax matters.