COMMISSIONER OF INCOME TAX vs. MOTICHAND VIRPAL SHAH

ITR/156/1986HC GujaratGJHC24010780198623 July 2001Author: HONOURABLE MR. JUSTICE ANIL R. DAVE,HONOURABLE MR. JUSTICE D.A.MEHTA3 pages
AI SummaryPartly Allowed

What were the facts?

The Income Tax Officer (ITO) passed a rectification order under Section 155(7A) for assessment year 1972-73 against the assessee, Motichand Virpal Shah. The assessee's appeal to the appellate authority was dismissed. Subsequently, the assessee appealed to the Income Tax Appellate Tribunal (ITAT). The ITAT initially dismissed the assessee's appeal but later revised its order on April 21, 1984, allowing the appeal on the ground of an apparent mistake in the original order. The ITAT held that the ITO had not rightly invoked Section 155(7A) of the Income Tax Act, 1961. The Revenue, represented by the Commissioner of Income Tax, sought a reference to the High Court on two questions of law.

What did the High Court hold?

The High Court addressed the second question first. It noted that Section 155(7A) was inserted by the Finance Act, 1978, with retrospective effect from April 1, 1974. Since the assessment year in question was 1972-73, which predates the effective date of Section 155(7A), the Assessing Officer could not have invoked this provision. Therefore, the Tribunal was correct in holding that the ITO had not rightly invoked Section 155(7A). The High Court answered the second question in the affirmative, in favour of the assessee and against the Revenue. Given this finding on the second question, the High Court deemed it unnecessary to answer the first question regarding the Tribunal's power to revise its order and declined to answer it. The reference was disposed of accordingly.

What were the issues?

The High Court was asked to decide two questions referred by the ITAT at the instance of the Revenue: 1. Whether on the facts and in the circumstances of the case, the Tribunal was justified by its subsequent order dated 21.4.1984 in revising its original order dated 26.2.1983 dismissing the assessee's appeal, and allowing the assessee's appeal on the ground that there was apparent mistake in the original order? (This question turns on the interpretation of the Tribunal's powers to revise its own orders). 2. Whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that the ITO had not rightly invoked the provisions of Section 155(7A) of the Income Tax Act, 1961? (This question turns on the applicability of Section 155(7A) to assessment year 1972-73). Contentions: Assessee: The ITAT was justified in revising its earlier order due to an apparent mistake. The ITO wrongly invoked Section 155(7A) as it was not in force for the relevant assessment year. Revenue: The ITAT was not justified in revising its original order and was also not justified in holding that Section 155(7A) was wrongly invoked.

Which sections of the Income-tax Act were involved?

Section 155(7A),Section 256(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 156 of 1986

For Approval and Signature:

Hon'ble MR.JUSTICE A.R.DAVE and Hon'ble MR.JUSTICE D.A.MEHTA

============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements?

2.

To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement?

4.

Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the Civil Judge? : NO ----

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 256(1)

All 370 judgments and leading authorities on Section 256(1) →

Recent GST High Court judgments

Search GST case law →