1979 (8) TMI 74 - HC - Income Tax

Summary

Issues:
1. Tribunal's refusal to state a case under s. 256(2) of the Income-tax Act, 1961.
2. Competence of the Tribunal to rectify its order under s. 254(1) of the Act.

Analysis:

1. The Court addressed the issue of the Tribunal's refusal to state a case under s. 256(2) of the Income-tax Act, 1961. The CIT had requested the Tribunal to state a question of law regarding the reopening and adjudication of an issue under s. 254 of the Act, which had been finalized through earlier orders. The Tribunal declined to state the case, stating that no question of law arose from its order. The Court reviewed the relevant facts, where the Tribunal had previously determined the cost of plant and machinery for the assessee. However, in a subsequent assessment year, the Tribunal rectified the cost of the plant and machinery based on the assessee's application. The CIT contended that the Tribunal should have stated a case as the question of the Tribunal's competence to rectify its order under s. 254(1) arose from the Tribunal's decision. The Court agreed that a question of law did arise but modified the question for reference to focus on the Tribunal's competence under s. 254(1) of the Act.

2. The Court then delved into the issue of the Tribunal's competence to rectify its order under s. 254(1) of the Act. The CIT argued that the Tribunal exceeded its jurisdiction by rectifying its appellate order regarding the cost of the plant and machinery for a specific assessment year. The CIT relied on precedent to support the contention that the Tribunal should have stated a case on this matter. The Court agreed that the question raised was a question of law concerning the Tribunal's jurisdiction under s. 254(1) of the Act. The Court allowed the application, directing the Tribunal to state a case on the issue of whether the Tribunal was competent to rectify its order regarding the cost of the plant for the relevant assessment year.

In conclusion, the Court found that a question of law did arise from the Tribunal's decision, specifically concerning the Tribunal's competence to rectify its order under s. 254(1) of the Income-tax Act, 1961. The Court modified the question for reference and directed the Tribunal to state a case on this issue.