2010 (9) TMI 837 - HC - Income Tax

High Court upholds Tribunal's power to recall orders for just resolution.

Commissioner of Income-tax Versus Satpal Pandit and Co.

The High Court dismissed the Revenue's appeal under section 260A of the Income-tax Act, upholding the Tribunal's decision to recall its order to address ... Limitation - CIT(Appeals) had only decided the question of limitation and had not touched the merits of the additions made by the Assessing Officer while disposing of the appeal, aggrieved against which, the Revenue had approached the Tribunal - Held that:- the Tribunal retains all the powers which are there at the time of hearing of the original appeal. In the present case, the CIT (Appeals) had only decided the question of limitation and had not touched the merits of the additions made by the Assessing Officer while disposing of the appeal, aggrieved against which, the Revenue had approached the Tribunal. The question of law was answered in favour of the Revenue and, thereafter, the Tribunal was required to remand the case to the CIT(Appeals) for adjudication on the merits. However, this was not done by the Tribunal while passing the order on December 23, 1997. Accordingly, the Tribunal while passing the order under section 254(2) of the Act had revived the appeal in order to do justice between the parties and to pass appropriate orders thereon. No illegality or perversity could be pointed out in the order passed or the approach of the Tribunal which may call for interference by this court. The substantial question of law as proposed is answered against the Revenue Issues:1. Appeal by Revenue under section 260A of the Income-tax Act, 1961 against Tribunal's order.2. Validity of Tribunal recalling its order for deciding remaining grounds and issues.3. Interpretation of section 260(1) regarding High Court or Supreme Court's decision and Tribunal's powers.Issue 1:The Revenue filed an appeal under section 260A of the Income-tax Act against the Tribunal's order, which upheld the Commissioner of Income-tax (Appeals)'s decision annulling the assessment order due to limitation. The High Court noted that the Tribunal had decided the appeal on a legal ground of limitation in line with the High Court's order, which required remanding the case to the Commissioner of Income-tax (Appeals) for adjudication on the merits. The Tribunal's subsequent order recalled the previous one to address the remaining issues in the appeal, aiming to ensure justice between the parties.Issue 2:The High Court examined the validity of the Tribunal recalling its order to decide the remaining grounds and issues in the appeal. It was observed that the Tribunal's action was in line with rectifying a mistake apparent on the record, as the Commissioner of Income-tax (Appeals) had not addressed the merits of the additions made by the Assessing Officer during the initial appeal process. The Tribunal's decision to revive the appeal under section 254(2) of the Act was aimed at rectifying the omission and passing appropriate orders to ensure justice between the parties.Issue 3:Regarding the interpretation of section 260(1) of the Income-tax Act, the High Court highlighted that after the High Court or Supreme Court decides on questions of law raised in a case, a copy of the judgment is sent to the Appellate Tribunal for necessary orders to dispose of the case in conformity with the judgment. The Tribunal, in conforming to the decision of the High Court, retains all powers it had during the original appeal hearing. In this case, the Tribunal was required to remand the case to the Commissioner of Income-tax (Appeals) for adjudication on the merits after the legal issue was decided in favor of the Revenue. The Tribunal's decision to revive the appeal under section 254(2) was deemed appropriate to ensure justice between the parties.In conclusion, the High Court dismissed the appeal by the Revenue, finding no illegality or perversity in the Tribunal's actions that warranted interference. The substantial question of law proposed by the Revenue was answered against them, affirming the Tribunal's decision to recall the order and address the remaining issues in the appeal for a just resolution between the parties.