1989 (8) TMI 102 - AT - Income Tax

Summary

Issues:
1. Maintainability of the application under section 27(1) of the Wealth-tax Act, 1957 against the order of the Tribunal dated 29.8.1988 passed under section 35 of the Act in M.A. No. 166/Bom/1987.

Detailed Analysis:
The Tribunal highlighted that the application under section 27(1) of the Wealth-tax Act, 1957, was being contested against the order dated 29.8.1988 passed under section 35(1)(e) of the Wealth-tax Act. The Tribunal pointed out the specific provision of section 27(1) which allows an application to refer to the High Court any question of law arising from an order passed under section 24 or section 26 of the Act. The Tribunal raised the crucial question of whether the order dated 29-8-1988 fell under section 24 or section 35 of the Act, emphasizing the limitations of section 27(1) in this context.

The counsel for the assessee relied on decisions from the Allahabad High Court and the Kerala High Court to argue that a reference could be made under section 27(1) based on similar provisions in the Income-tax Act. However, the Tribunal distinguished these cases, emphasizing the absence of a parallel provision to section 254(2) of the Income-tax Act in the Wealth-tax Act. The Tribunal clarified that the power to rectify or amend an order under section 24 of the Wealth-tax Act is granted only under section 35(1)(e), making orders under section 35 distinct from those under section 24 or 26 for the purpose of section 27 applications.

Referring to the provisions of the Income-tax Act, 1922, the Tribunal discussed the historical context of tribunal orders and references to the High Court. Citing a case from the Punjab High Court, it was established that orders of rectification under section 35 could not be referred to the High Court under section 66, drawing a parallel to the current scenario under the Wealth-tax Act. The Tribunal also referenced a decision from the Delhi High Court, which reiterated that orders passed by the Tribunal on miscellaneous petitions do not qualify for references under section 27 of the Wealth-tax Act.

In its final analysis, the Tribunal concluded that when the Tribunal refuses to rectify an earlier order, the refusal order falls under section 35 of the Wealth-tax Act or is considered a miscellaneous order passed under inherent powers. The Tribunal affirmed that the original order stands valid when the Tribunal declines rectification, making an application under section 27(1) against such an order not maintainable. The Tribunal dismissed the application under section 27(1) of the Wealth-tax Act, 1957, citing the clear terms of the section and the specific orders to which references are permitted.