C.I.T PATIALA vs. M/S METAL PRODUCTS OF INDIA,CHD

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ITR/23/1993HC Punjab & HaryanaPHHC01021918199330 January 2008Author: MR. JUSTICE SATISH KUMAR MITTAL,MR JUSTICE RAKESH KUMAR GARG2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court did not decide the substantial questions of law on merits. The court noted that the ITAT had remanded the matter. The Revenue's counsel informed the court that the record of the case was not traceable, and therefore, they were unable to provide the status of the proceedings after the remand. A letter from the Income-tax Officer confirming the unavailability of records was placed on record. In view of the untraceable records, the High Court returned the reference unanswered. No finding was given on the specific issues raised by the Revenue regarding the ITAT's power to recall its order or entertain a second rectification application. The operative direction was to return the reference unanswered.

What were the facts?

The Commissioner of Income Tax, Patiala (Revenue) filed a reference application before the High Court of Punjab and Haryana at Chandigarh against an order of the Income Tax Appellate Tribunal (ITAT). The ITAT had recalled its earlier appellate order dated August 4, 1975, which had become final. The assessee, M/s. Metal Products of India, Chandigarh, had filed an application for rectification under Section 254(2) of the Income Tax Act, 1961, which was initially dismissed. Subsequently, the ITAT entertained a second application and recalled its order, restoring the appeal for fresh disposal on merits. The High Court was asked to decide substantial questions of law arising from this action of the ITAT. During the proceedings before the High Court, the Revenue's counsel stated that the record of the case was not traceable, preventing them from informing the court about the status of proceedings after the remand by the ITAT. A letter from the Income-tax Officer, Ward 2(1) Chandigarh, confirming the unavailability of records, was placed on record.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the Tribunal was right in law in recalling its appellate order dated 4.8.1975, which had become final u/s 254 (4) of the Income-tax Act, 1961 in exercise of its inherent power and in restoring the appeal on its file? (Question of law) 2. Whether on the facts and in the circumstances of the case, the Tribunal had jurisdiction to entertain a second application u/s 254 (2) of the Act, after it had already dismissed the earlier application of the assessee for rectification made on similar grounds thus putting end to the finality of its previous orders dated 4.8.1975 and 24.8.1976 and reopening the appellate proceedings for disposal on merits afresh? (Question of law) 3. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that there was a palpable mistake in its appellate order dated 4.8.1975 rectifiable u/s 254 (2), of the Act, or under inherent powers invoked by it? (Question of law) Assessee's Contentions: The judgment does not record specific contentions made by the assessee regarding the questions of law. The assessee's actions, as described in the facts, involved filing applications for rectification. Revenue's Contentions: The Revenue contended that the ITAT was not right in recalling its final order and that the Tribunal lacked jurisdiction to entertain a second application for rectification after the dismissal of the first. The Revenue argued that the ITAT's action undermined the finality of its previous orders. The Revenue relied on Section 254(4) and Section 254(2) of the Income-tax Act, 1961.

Which sections of the Income-tax Act were involved?

Section 254(4),Section 254(2)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.R. No. 23 of 1993 DATE OF DECISION : 30.01.2008 The Commissioner of Income Tax, Patiala .... APPLICANT-REVENUE Versus M/s. Metal Products of India, Chandigarh ..... RESPONDENT-ASSESSEE CORAM :- HON'BLE MR. JUSTICE SATISH KUMAR MITTAL HON'BLE MR. JUSTICE RAKESH KUMAR GARG

Present: Mr. S.K. Garg Narwana, Advocate, for the revenue. Mr. Pankaj Jain, Advocate, for the assessee. SATISH KUMAR MITTAL, J. ( Oral ) The Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh, has referred the following substantial questions of law, to this Court for opinion :

“1. Whether on the facts and in the circumstances of the case, the Tribunal was right in law in recalling its appellate order dated 4.8.1975, which had become final u/s 254 (4)of the Income-tax Act, 1961 in exercise of its inherent power and in restoring the appeal on its file?

2.

Whether on the facts and in the circumstances of the case, the Tribunal had jurisdiction to entertain a second application u/s 254 (2) of the Act, after it had already dismissed the earlier application of the assessee for rectification made on similar

ITR No. 23 of 1993 -2- grounds thus putting end to the finality of its previous orders dated 4.8.1975 and24.8.1976 and reopening the appellate proceedings for disposal on merits afresh?

3.

Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that there was a palpable mistake in its appellate order dated 4.8.1975 rectifiable u/s 254 (2), of the Act, or under inherent powers invoked by it?” Vide the impugned order, the matter was remanded. On March 1, 2007, learned counsel for the revenue was granted time to find out the status of proceedings after remand in terms of the order passed by the Tribunal. Thereafter, the case was adjourned for several times for the same purpose. Today, learned counsel for the revenue states that record of the case is not traceable, therefore, he is unable to inform the status of proceedings after the remand. In this regard, he has produced copy of a letter dated 29.1.2008, written by Income-tax Officer, Ward 2 (1) Chandigarh, which is taken on record. In view of the aforesaid fact, the instant reference is returned un-answered. ( SATISH KUMAR MITTAL ) JUDGE January 30, 2008 ( RAKESH KUMAR GARG ) ndj JUDGE

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