COMMISSIONER OF INCOME TAX vs. AIR CONTROL & CHEMICAL ENGG CO

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ITR/192/1985HC GujaratGJHC24012324198514 June 2001Author: HONOURABLE MR. JUSTICE ANIL R. DAVE,HONOURABLE MR. JUSTICE D.A.MEHTA3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that it would not be possible to render an opinion on the referred questions because the order of the Income Tax Officer (ITO), which was the subject of the appeal before the CIT and subsequently before the ITAT, was not on record. The Court stated that without the order passed in exercise of powers under Section 154 of the Act, it would be difficult to determine whether those powers were rightly exercised by the Assessing Officer. Consequently, the Court found that sufficient material was not available to answer the questions. The High Court directed the ITAT to prepare a fresh statement of case, including all relevant orders and material required by both the revenue and the assessee, to enable the Court to provide an opinion. The reference was returned unanswered.

What were the facts?

This case concerns an Income Tax Reference No. 192 of 1985 before the High Court of Gujarat at Ahmedabad, initiated at the instance of the revenue. The reference was made under Section 256(2) of the Income-tax Act, 1961, by the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench 'A'. The core of the dispute revolves around an ITAT order dated 29.2.1981, which disposed of ITA No. 832/Ahd/80, and a subsequent Miscellaneous Application No. 119/Ahd/82 filed before the ITAT. The revenue is challenging the ITAT's decision to entertain the miscellaneous application, which they argue amounted to a re-hearing of the original appeal. The amount in dispute is not specified. The procedural history involves an original appeal before the ITAT, a disposal of that appeal, and then a miscellaneous application filed before the ITAT.

What were the issues?

The High Court was asked to decide four questions of law referred by the ITAT at the instance of the revenue: 1. Whether the Tribunal was right in law in entertaining Miscellaneous Application No. 119/Ahd/82, which in fact amounted to re-hearing of ITA No. 832/Ahd/80 disposed of by its order dated 29.2.1981? 2. Whether the Tribunal was right in law in concluding that the grounds of appeal filed by the assessee in ITA No. 832/Ahd/80 were wide enough to cover whether the CIT(A) was right in confirming the exercise of powers under Section 154 of the Income-tax Act, 1961 by the ITO? 3. Whether the Tribunal was right in law in exercising powers, while disposing of Miscellaneous Application No. 119/Ahd/82, in such a manner that ITA No. 832/Ahd/80, which was disposed of on 29.7.81 by partly allowing it, should be set aside and the appeal allowed in full? 4. Whether the Tribunal was right in law in concluding that the exercise of powers under Section 154 of the Income-tax Act, 1961 by the ITO was not legal and valid? Contentions: The revenue argued that the Miscellaneous Application amounted to a re-hearing of the original appeal. The assessee's contentions are not recorded as no one appeared for them. The revenue relied on the fact that the order passed under Section 154 by the ITO was not on record.

Which sections of the Income-tax Act were involved?

Section 256(2),Section 154

AI-generated summary — verify with the full judgment below

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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 192 of 1985

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 -------------------------------------------------------------- COMMISSIONER OF INCOME TAX Versus AIR CONTROL & CHEMICAL ENGG CO -------------------------------------------------------------- Appearance: MR BB NAIK for MR RP BHATT for Petitioner NOTICE SERVED for Respondent No. 1

--------------------------------------------------------------

CORAM : MR.JUSTICE A.R.DAVE and MR.JUSTICE D.A.MEHTA

Date of decision: 14/06/2001

ORAL JUDGEMENT (Per : MR.JUSTICE A.R.DAVE)

At the instance of the revenue, the following questions have been referred to this Court for its opinion under the provisions of sec. 256(2) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') by the Income Tax Appellate Tribunal, Ahmedabad Bench 'A'.

1.

Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in entertaining Misc. Application No. 119/Ahd/82 which in fact amounted to re-hearing of I.T.A. No. 832/Ahd/80 disposed of by its order dated 29.2.1981?

2 Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in coming to the conclusion that the grounds of appeal filed by the assessee in ITA No. 832/Ahd/80 were wide enough to cover whether the CIT(A) was right in confirming the exercise of powers u/s 154 of the I.T. Act, 1961 by the ITO?"

3.

Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in exercising the powers, while disposing of misc. Application No. 119/Ahd/82 in such a manner that I.T.A. No. 832/Ahd/80 which was disposed of on 29.7.81 by partly allowed should be set aside and the appeal should be allowed in full?

4.

Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in coming to the conclusion that the exercise of powers u/s 154 of the I.T. Act, 1961 by the I.T.O. was not legal and valid?

2.

We have heard learned advocate Shri BB Naik appearing for the revenue. Though served, nobody has appeared for the respondent assessee.

3.

After hearing the learned advocate and looking to the statement of case submitted by the Tribunal, in our opinion, it would not be possible for us to render our opinion on the questions which have been referred to this Court for the reason that the order of the ITO, which was subject-matter of the appeal before the CIT and which was ultimately set aside by the Tribunal, is not on record. As the order, which was passed in exercise of powers under sec. 154 of the Act, is not on record, it would be difficult for this Court to answer whether the powers under the provisions of sec. 154 of the Act were rightly exercised by the Assessing Officer.

5.

In view of the fact that sufficient material is not with this Court for answering the questions, we are returning the reference unanswered and we direct the Tribunal to prepare a fresh statement of case along with all relevant orders and material which might be required to be relied upon by the revenue as well as the assessee so as to have the opinion of this Court.

The Reference stands disposed of accordingly with no order as to costs.

(A.R. Dave, J.)

(D.A. Mehta, J.) (hn)

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