TaxTMI 
TaxTMI 
TaxTMI 
2004 (7) TMI 34
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....e order dated September 4, 2001, passed in AWT No. 3730 of 1993 (Lalit Mohan Thapar v. CWT), of which rectification has been asked for. In the operative part of the said order dated September 4, 2001, the exception phrase has not been mentioned or indicated. This, according to Mr. Khaitan, creates the confusion in respect of the valuation of unquoted shares of the assessee, which, according to him, is an investment company. He points out from the paper book at page 5 being a part of the assessment order and page 17 being part of the appellate order where the assessee-company was held to be and described as an investment company. According to Mr. Khaitan, this is not in dispute. However, Mr. Chowdhury does not admit the same to be undisputed and according to Mr. Chowdhury, there is no finding that the assessee was an investment company. The application that has been filed has since been given a nomenclature of review. But in the course of his argument Mr. Khaitan had in his usual fairness, pointed out that within the scheme of the Wealth-tax Act, 1957, there is no scope of review. This is the settled principle of law. But the absence of power of review does not preclude the High C....
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....een tendered to be exempted from the operation of rule 1D but it does not mean that rule 1D does not apply at all for the purpose of valuing unquoted equity share of an investment company or a managing agency company. The principle has not been finally laid down or decided in the decision in Bharat Hari Singhania [1994] 207 ITR 1 (SC). The question is still open and, therefore, it is susceptible to different opinions and not one as contended by Mr. Khaitan. Thus it cannot come within the purview of rectification. However, he admits that the High Court has power to rectify. But the High Court can neither review nor amend which is outside the scope and ambit of rectification in the absence of any power of review conferred on it by the statute and in the absence of inherent power conceived under section 151 of the Civil Procedure Code. According to him, in the order dated September 4, 2001, the learned Division Bench directed the valuation under rule 1D of the unquoted equity share of the assessee consciously and had accepted the view that the question has not been finally decided and, therefore, the same principle can be followed in the case of an investment company as well. Therefo....
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....nt company and managing agency company". Therefore, in Bharat Hari Singhania [1994] 207 ITR 1 (SC), it was specifically mentioned that this rule 1D is mandatory and has to be followed in every case where unquoted equity share of a company are to be valued except those of an investment company or a managing agency company or in other words the unquoted equity shares of a company other than an investment company or a managing agency company are to be valued following rule 1D mandatorily. The theme of the said order in Bharat Hari Singhania [1994] 207 ITR 1 (SC) does not leave any scope for any doubt with regard to the exception of the said investment company and managing agency company and it was not concerned with the same. Whether the same principle would be followed in respect of the investment company and managing agency company is not a question to be answered in this case at our hand. Rule 1D, as framed in the scheme of the Rules itself by clear expression excepted investment companies and managing agency companies. In the operative part of the order, it was held that the question had become one of academic interest, as the unquoted shares are to be valued in accordance with r....
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....spect and it would apply in respect of companies which have been brought within the purview of rule 1D and if rule 1D excepts investment company and managing agency company, then it means that the exception is also a mandatory one. Now how it is to be valued is not the subject matter of decision in this case. It is also not before us to hold whether the assessee-company is an investment company or not. It is only the law that has been laid down which we are to deal with and find out whether there is any mistake apparent on the face of the record, which, in our view, is a case present. Mr. Khaitan had referred to the decision in Bharat Hari Singhania [1994] 207 ITR 1 (SC) and relied upon paragraphs 12, 23 and 34 in order to point out that it had dealt with companies other than an investment company and managing agency company to which due attention was paid in the said judgment. In one place it was held that rule 1D is not ineffective or invalid. From the decisions cited by learned counsel for the assessees, it cannot be said that the Wealth-tax Officer has any option to follow or not to follow the said rule. He has to follow and apply the said rule in each and every case where he ....
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....fication, the High Court can do the same, particularly when the situation arose on account of the court's mistake or omission; inasmuch as one cannot suffer due to the court's omission. In K. Ahamad v. CIT [1974] 96 ITR 29 (Ker) [FB] as referred to by Mr. Khaitan, it was held that sections 152 and 151 of the Civil Procedure Code are inapplicable when the court exercises a jurisdiction answering a question referred to at the instance of the assessee or the Detriment. Therefore, the court does not have any inherent power. Section 151 does not confer any inherent power but it recognises or saves the inherent power. Even without that section the High Court has power to rectify any error if it creeps in the order and if there are accidental errors or omissions the court has jurisdiction to correct those errors and rectify those omissions on the principle that no act of court shall ever injure a party. It was further held that the court has inherent jurisdiction to correct errors and omissions arising from accidental slips. In Surajmull Choteylal v. CIT [1978] 114 ITR 130 (Cal), this court noted the Kerala decision in the case of K. Ahamad [1974] 96 ITR 29 [FB] and accepted the proposit....
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....ax Act, 1961, for the limited purpose of obtaining the High Court's opinion on question of law. In giving that opinion properly, if any question of incidental and ancillary nature arises, in that event, it cannot be said that the court lacks such power, however, such incidental powers cannot be so construed as to confer any power, contrary to the scheme of the 1961 Act by reason whereof we may say that review cannot be entertained. However, the Supreme Court in this decision has expressed that it is in respectful agreement with the views expressed by the Allahabad High Court in Sridhar v. CWT [1985] 153 ITR 543 and the views of the Calcutta High Court in Dwarka Prasad Bajaj v. CIT [1980] 126 ITR 219. In Pierce Leslie India Ltd. v. CIT [1988] 174 ITR 626 (Karn), it was held that in exercise of power under section 256 the High Court does not have any power of review until and unless such power for review has been expressly conferred on the High Court and there being no such conferment the power of review cannot be exercised. It had noted the decision in Roop Narain Ramchandra (P.) Ltd. v. CIT [1972] 84 ITR 181, by the Allahabad High Court and held that the High Court had no inherent....
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....nd the Supreme Court. Having regard to the facts and circumstances of the case, we need not go to this extent since it is a settled proposition of law that while exercising jurisdiction under section 256, Income-tax Act, the High Court cannot assume power of review. In CIT v. Hungerford Investment Trust Ltd. [1935] 3 ITR 188 (Cal) relied upon by Mr. Khaitan it was held that though the original side jurisdiction does not contain any such jurisdiction which is a special one conferred by the Income-tax Act and that in exercise of such special jurisdiction the High Court has to frame its own rules and guided by the principle of doing justice. In Jaipur Mineral Development Syndicate v. CIT [1977] 106 ITR 653 (SC), it was held that the court was not functus officio in entertaining the application for rehearing the reference and disposing of the same on the merits which was relied upon in the decision cited earlier. In CIT v. Ashok Kumar Jain [2001] 250 ITR 610 (MP), cited by Mr. Khaitan the above principle was supported. The provisions contained in section 27 of the Wealth-tax Act are identical with those of section 256 of the Income-tax Act. In both the cases, the High Court exercises....
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....y the hearing of an appeal by the same officer who decided the case. There is at least as good reason for saying that such power should not be exercised unless the statute gives it, as for saying that another tribunal should not hear an appeal from the trial court unless such a power is given to it by statute'. The same principle has been affirmed by the Judicial Committee in Baijnath Ram Goenka v. Nand Kumar Singh [1913] 40 Ind App 54 (PC), in which a mahal was sold for arrears of revenue. Two appeals to set aside the sale were preferred to the Commissioner under the Bengal Land Revenue Sales Act, section 88, as amended by the Bengal Land Revenue Sales Act, 1868. One of these appeals was by the respondent, a co-shares of the mahal, and was dismissed on the ground that the auction purchaser had not been made a defendant. A second appeal was preferred by the other co-sharers in the mahal, and in this appeal the Commissioner on March 28, 1900, made an order annulling the sale on the ground of an irregularity in the sale notice. This order related to the entire mahal. On June 21, 1900, the Commissioner having come to the conclusion that his order of March 28,1900 was wrong in law, re....
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....d the Question of review does not arise in the present case since the High Court can exercise such ancillary power, as discussed before, while dealing with reference under section 256. The distinction, which we prefer to draw, is the distinction between the words "review" and "rectify". Though, the High Court cannot have jurisdiction to review but yet in order to rectify the injury caused on account of mistake on the part of the High Court, the High Court has power inherent to rectify such mistake and to do justice when such mistake does not require long drawn arguments to establish and where there are no two opinions. The other decision cited by Mr. Chowdhury is Devandra Pal Singh v. State, N.C.T of Delhi, AIR 2003 SC 886. The said decision was dealing with article 137 in relation to review by the Supreme Court in connection with certain criminal matters wherein it was held that there is no power of review. The criminal matter stands on a different footing where the Code of Criminal Procedure specifically prohibits exercise of any power by a court after the final order is passed which rendered the court functus officio for all purposes. Therefore, on the facts, this decision is d....