Court upholds ITAT's decision on tax assessment rectification, emphasizes exhausting remedies before filing writ petitions.

The High Court dismissed both writ petitions challenging the Income-tax Appellate Tribunal's orders for rectification of income tax assessments. The court held that the Tribunal's refusal to amend the assessment should be considered a rejection, barring further rectification applications. It emphasized the need to exhaust available remedies, such as filing an appeal under section 260A(1) of the Income-tax Act, before resorting to writ petitions. The court deemed the second rectification petition an attempt to bypass the appeal process, leading to the dismissal of the writ petitions due to failure to follow proper legal procedures and unexplained delay.

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Issues:
Writ petitions seeking certiorarified mandamus to quash orders for rectification of income tax assessments.

Analysis:
The judgment pertains to two writ petitions filed to challenge the orders of the Income-tax Appellate Tribunal for rectification of income tax assessments. The petitioner initially filed M. P. No. 17 of 2001 for rectification, which was allowed on April 25, 2001. Subsequently, the petitioner filed another rectification petition, M. P. No. 92 of 2003, after more than two years. The Tribunal dismissed the second petition, citing the restriction under section 254(2) of the Income-tax Act, 1961, which prohibits passing orders on rectification petitions. The court referred to a judgment of the Orissa High Court, emphasizing that the power of the Tribunal to recall an order under section 254(2) is limited to rectifying mistakes apparent from the record and does not allow for a fresh order. Any amendment or refusal to amend under section 254(2) merges with the original order under section 254(1, making it the final order in the appeal. Therefore, the Tribunal's refusal to amend should be considered as a rejection, precluding the filing of further rectification applications. The court highlighted that the appropriate remedy for aggrieved parties is to appeal under section 260A(1) of the Act, which had not been pursued in this case. The second rectification petition was viewed as an attempt to circumvent the appeal process, leading to the dismissal of the writ petitions due to failure to exhaust the alternative remedy and unexplained delay.

In conclusion, the court dismissed both writ petitions, emphasizing the importance of following the prescribed legal procedures and exhausting available remedies before seeking judicial intervention through writ petitions.

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