2006 (10) TMI 108 - HC - Income Tax

Summary

Issues Involved:
1. Maintainability of the miscellaneous cases under section 151 of the Civil Procedure Code.
2. Compliance with the Supreme Court's directions.
3. Legal provisions and inherent powers of the court.
4. Finality of previous judgments and orders.
5. Availability of witnesses for cross-examination.

Detailed Analysis:

1. Maintainability of the Miscellaneous Cases:
The primary issue was whether the miscellaneous cases filed under section 151 of the Civil Procedure Code were maintainable. The court examined the inherent powers under section 151 and concluded that, in reference jurisdiction under the Income-tax Act, the High Court does not possess inherent powers as per section 151 of the Code. The court referenced the Supreme Court's decision in CIT v. Bansi Dhar and Sons, which clarified that the High Court's jurisdiction under section 256 of the Income-tax Act is limited to giving advisory opinions and does not extend to exercising inherent powers under section 151 of the Code.

2. Compliance with the Supreme Court's Directions:
The court reviewed the procedural history and compliance with the Supreme Court's directions. The Supreme Court had directed the Income-tax Appellate Tribunal to refer certain questions of law to the High Court. The High Court, in its judgment dated August 1, 1990, found that the Tribunal did not consider the evidence properly and directed the Assessing Officer to give the assessee a reasonable opportunity to rebut the statements. The Tribunal subsequently restored the matter to the Assessing Officer, who reported that cross-examination of the witnesses was not possible due to their death or incapacity.

3. Legal Provisions and Inherent Powers of the Court:
The court discussed the applicability of section 151 of the Civil Procedure Code in the context of the Income-tax Act, which is a self-contained code. It referenced the Supreme Court's decision in Rao Bahadur Ravulu Subba Rao v. CIT, which established that the Income-tax Act is exhaustive and does not require the application of the Code of Civil Procedure. The court also noted that the High Court's jurisdiction under section 256 is purely advisory and does not include inherent powers to reopen or modify judgments.

4. Finality of Previous Judgments and Orders:
The court emphasized that the findings of the High Court in its judgment dated August 1, 1990, had not been challenged and had attained finality. The consequential order of the Tribunal and the remand report, which indicated that cross-examination of witnesses was not possible, were also unchallenged. Therefore, the court held that reopening these issues through miscellaneous cases was not permissible.

5. Availability of Witnesses for Cross-Examination:
The remand report indicated that none of the 14 witnesses were available for cross-examination due to death, incapacity, or untraceability. The court noted that without the possibility of cross-examination, the entire matter had become academic, aligning with the High Court's earlier conclusion that the issues would be academic if the witnesses could not be examined.

Conclusion:
The court dismissed the miscellaneous cases as totally misconceived and not maintainable. It reiterated that the High Court, in its reference jurisdiction under the Income-tax Act, could not exercise inherent powers under section 151 of the Civil Procedure Code. The finality of the previous judgments and the unavailability of witnesses for cross-examination rendered the reopening of the proceedings unnecessary and academic.