M/S RAJASTHAN SPINNING and WEAVING MILLS vs. THE DY COMMISSIONER OF INCOME TAX

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ITA/92/2001HC RajasthanRJHC01025731200121 July 2005Author: RAJESH BALIA,RS CHAUHAN2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court noted that its answer to the questions referred by the ITAT regarding the validity of the CIT's order under Section 263 was in favour of the assessee and against the Revenue. The Court found the Tribunal's order confirming the CIT's Section 263 order to be erroneous. Consequently, the present appeal, which pertains to the rejection of the assessee's rectification application, was rendered academic and infructuous. The High Court held that the appeal need not be decided on its merits due to becoming infructuous. No costs were awarded.

What were the facts?

The assessee, M/s. Raj Spinning & Weaving Mills Ltd., filed an appeal before the Income Tax Appellate Tribunal (ITAT) concerning assessment year 1990-91. The ITAT had passed an appellate order dated 10.1.1995 in I.T.A No. 1047/JP/94. Subsequently, the assessee made an application for rectification of this appellate order. The ITAT rejected the assessee's rectification application. The present appeal arises from the rejection of this rectification application. The ITAT had also submitted a statement of case referring two questions of law to the High Court concerning the validity of an order passed by the Commissioner of Income Tax (CIT) under Section 263, which was upheld by the Tribunal.

What were the issues?

1. Whether on facts and in the circumstances of the case and in law, the Tribunal was justified in holding that the order passed by the CIT under section 263 was correct and thereby upholding the same? (Question of law) 2. Whether on the facts and in the circumstances of the case and in law the Tribunal was justified in holding that the order passed by the Assessing Officer was erroneous and prejudicial to the interest of the Revenue? (Question of law) Assessee's Contentions: The judgment does not record specific contentions made by the assessee regarding the two questions of law referred to the High Court. However, the appeal before the High Court is against the rejection of the assessee's rectification application. The assessee's argument would implicitly be that the rectification application should have been allowed. Revenue's Contentions: The judgment does not record specific contentions made by the revenue regarding the two questions of law referred to the High Court.

Which sections of the Income-tax Act were involved?

Section 263

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Cause title — parties, addresses and appearances
1 D.B. INCOME TAX APPEAL NO. 92/2001. M/s.RAJ.SPINNING & WEAVING VS. THE DY.C.I.T. MILLS LTD. BHILWARA UDAIPUR

: 21.07.2005. HON'BLE MR. RAJESH BALIA, J. HON'BLE MR. R.S. CHAUHAN, J. Mr. Anjay Kothari for the appellant. Mr. K.K. Bissa for the respondents. The Income Tax Appellate Tribunal has submitted the statement of case and referred the following two questions of law arising from its appellate order dated 10.1.1995 in I.T.A No. 1047/JP/94 relating to assessment year 1990-91: Q.NO.1 Whether on facts and in the circumstances of the case and in law, the Tribunal was justified in holding that the order passed by the CIT under section 263 was correct and thereby upholding the same? Q.No.

2.

Whether on the facts and in the circumstances of the case and in law the Tribunal was justified in holding that the order passed by the Assessing Officer was erroneous and prejudicial to the interest of the Revenue? Said reference was registered as D.B.I.T.R. No. 1/2003. 2 The above questions relate to validity of order passed by CIT under Section 263 of the I.T. Act, 1961. This appeal relates to rejection of application made by the assessee for rectification of the aforesaid appellate order. The misc. application has been rejected by the Tribunal vide its order under appeal. In view of our answer to the question about the validity of the order passed under Section 263 by the Commissioner in Income Tax Reference No.1/2003 in favour of assessee and against the Revenue, by holding that the order of the Tribunal was erroneous while confirming the order passed under Section 263, this appeal which relates to rejection of rectification application made by the assessee becomes of academic importance and infructuous and need not be decided.

The appeal is accordingly dismissed as having become infructuous. No costs. (R.S.CHAUHAN),J. (RAJESH BALIA),J. /Anil/

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