1986 (8) TMI 42 - HC - Income Tax

High Court emphasizes Tribunal's jurisdiction not tied to specific provision, directs reevaluation

The High Court held that the Income-tax Appellate Tribunal erred in deeming a reference application invalid based solely on the provision it was filed ... Application For Reference, Application Under Wrong Section, Change Of Law Issues:1. Jurisdiction under Article 226 of the Constitution regarding orders passed by the Income-tax Appellate Tribunal.2. Validity of reference application under section 256(1) of the Income-tax Act, 1961.3. Dismissal of reference application by the Income-tax Appellate Tribunal.4. Maintainability of a petition under section 66(2) of the Indian Income-tax Act, 1922.5. Quashing of orders dated August 5, 1978, and November 17, 1978, passed by the Income-tax Appellate Tribunal.Analysis:The High Court was approached under Article 226 of the Constitution to challenge orders dated August 5, 1978, and November 17, 1978, passed by the Income-tax Appellate Tribunal. The petitioner sought reference of questions of law under section 256(1) of the Income-tax Act, 1961, related to an order passed under section 33(4) of the Indian Income-tax Act, 1922. Respondent No. 2 objected to the reference application on grounds including the incorrect date of service of the Tribunal's order. The Tribunal held that the reference application was invalid under section 256(1) of the 1961 Act, following a precedent. The petitioner's attempt to recall the order was also dismissed by the Tribunal.The High Court analyzed the jurisdictional issue and held that the Tribunal erred in deeming the application non est solely based on the provision under which it was filed. It was emphasized that the Tribunal's jurisdiction is not dependent on the specific provision cited in the application but on its inherent powers. The Court directed the Tribunal to consider the application under section 66(1) of the 1922 Act and determine if any questions of law arise from the order dated February 28, 1977.Regarding the maintainability of a petition under section 66(2) of the 1922 Act, the Court clarified that such a petition is not applicable when a reference application has been dismissed as not maintainable. The Court allowed the petition, quashed the previous orders, and instructed the Tribunal to reevaluate the application under section 256(1) of the 1961 Act as if it were under section 66(1) of the 1922 Act. The Court rendered another pending case infructuous and directed it to be presented before a Division Bench for further action.