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TMI Blog1969 (11) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... took the view that 74 currency notes of the denomination of Rs. 1,000 each, represented the assessee's income during the previous year. When the matter went before the Appellate Tribunal, the Tribunal agreed to reduce the amount of add-back from Rs. 74,000 to Rs. 34,000. At the instance of the assessee the following question of law was referred to this court : " Whether there was material for assessing the sum of Rs. 34,000 represented by 34 notes of Rs. 1,000 each and cashed by the assessee under the High Denomination Notes (Demonetization) Ordinance, 1947, as income chargeable to income-tax ? " This question was answered by this court on August 21, 1962, in the negative, and against the department. In view of the High Court's decision, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he department, the present case of refund is governed by the Income-tax Act, 1961. It will be convenient to refer to the two Acts as the old Act and the new Act, respectively. An important question for consideration in this case is whether the present case is governed by the old Act or by the new Act. The petitioner points out that the matter relates to the assessment year 1947-48. The new Act came into force on April 1, 1962. The various orders passed by the Income-tax Officer, the Appellate Assistant Commissioner and the Appellate Tribunal in the assessment proceeding were passed long before April 1, 1962. On the other hand, it has been pointed out for the opposite parties that the order of the High Court disposing of the reference is da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed out, the order (annexure " B ") dated April 9, 1965, purports to have been passed under sub-section (7) of section 66 of the old Act. Sub-section (7) of section 66 of the old Act ran thus : " Notwithstanding that a reference has been made under this section to the High Court, income-tax shall be payable in accordance with the assessment made in the case : Provided that, if the amount of an assessment is reduced as a result of such reference, the amount over-paid shall be refunded with such interest as the Commissioner may allow..." It appears that the order (annexure " B ") dated April 8, 1965, was passed by the Commissioner of Income-tax, U.P., under the proviso to subsection (7) of section 66 of the old Act. According to Dr. Misra, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e old Act. Admittedly, the High Court's decision dated August 21, 1962, has become final. So, the assessment has to be modified in the light of the High Court's decision. A sum of Rs. 26,021 was refunded to the assessee as far back as 1963. There is no indication on the record of this case that there was any attempt on the part of the department to cancel that refund of Rs. 26,021. If the refund of Rs. 26,021 were to stand, the department should have no serious objection to the award of interest to the extent of Rs. 10,823.30 under the proviso to sub-section (7) of section 66 of the old Act. Annexure "E" is the impugned order passed by the Commissioner of Income-tax, U.P., on March 24, 1969. The order purports to have been passed under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d inherent power to correct his mistakes. Reliance was placed upon S. P. Singar Singh & Sons v. Income-tax Appellate Tribunal. It was held in that case that all courts of plenary jurisdiction have inherent jurisdiction to rectify mistakes. Consequently, the Appellate Tribunal acting under section 19(2) of the Act also has such inherent power. It was pointed out in that case that there was a lacuna in the Excess Profits Tax Act, 1940, inasmuch as there is no express power to rectify mistakes. But in the Income-tax Act, 1961, there is express power to rectify mistakes. There is, therefore, no need to invoke the general principle of inherent jurisdiction to rectify mistakes. In S. B. Singar Singh's case it was observed on page 631: " . . . th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ") that the Income-tax Officer was not arriving at any independent conclusion as regards the validity of the order of refund. He was merely carrying out the decision of the Commissioner of Income-tax dated March 24, 1969. So, the Income-tax Officer's order cannot be, supported under section 154(1)(a) of the new Act. Since the decision of opposite party No. 2 dated March 24, 1969, is invalid, the consequential orders passed by opposite party No. 1 must also be struck down. Dr. Misra raised a preliminary objection that the writ petition is premature. According to Sri K. N. Srivastava's counter-affidavit, the decision of the High Court dated August 21, 1962, has not yet been communicated to the Appellate Tribunal, Allahabad. But the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X
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