(a) Income‑tax‑‑‑

‑‑‑‑Appeal to Appellate Tribunal‑‑‑Writ‑‑‑Powers of Tribunal‑‑‑Power of rectification‑‑Tribunal cannot recall its entire order and rehear appeal‑‑ Question which is debatable ‑‑‑Power of rectification cannot be exercised ‑‑ Order of Tribunal setting aside block assessment‑‑‑Erroneous observation in order that there could be no separate assessment in respect of a particular year comprised in block period‑‑‑Entire order could not be recalled ‑‑‑No appeal lay from such order and even if it did the order could be quashed in writ proceedings‑‑‑Indian Income Tax Act, 1961, S.254.

Absolute obliteration of its earlier order is not within the jurisdiction of the Tribunal. It cannot totally recall its order under section 254(2) of the Income Tax Act, 1961, and proceed to rehear the matter on de novo arguments. The words of the said subsection refer to amendment or rectification and not a total recall. Invocation of section 254(2) is not proper where the matter needs long drawn arguments.

The Tribunal had set aside a block assessment made under Chapter XIV‑B by its order, dated April 22, 1998. After the Tribunal passed its order in April, 1998 an Explanation was added to the Income‑tax Act in Chapter XIV‑B to section 158BA. By that Explanation, regular assessments for all years in the block period are also required to be made. In regard to the regular assessment for one particular assessment year in the block period of the same assessee, an earlier writ was filed and a judgment had been delivered. In that judgment it had been observed that these would be a block assessment for all the years in question but in addition thereto there would be also regular assessments for the separate years included in the block period. A miscellaneous application under section 254(2) had been made by the Revenue subsequent to the introduction of the amendment but prior 4o the delivery of the judgment. The Tribunal passed an order thereon on June 1, 1999, recalling its earlier order. On a writ petition to quash the order, dated June 1, 1999:

Held, that the Tribunal's order of April, 1998, in so far as the ordering portion was concerned, was in perfect accordance with the added Explanation and the earlier judgment delivered by the High Court. However, in the body of the Tribunal's order, it was observed by the Tribunal that the block assessment would be one assessment and there would not be separate assessments for the individual assessment years included in the block period. In the order of June 1, 1999, the Tribunal had observed that remark was a mistake apparent on the record. The Tribunal did not have the power to recall its entire order. Moreover, the invocation of section 254, sub section (2) in a matter like this was improper because the matter was one requiring long drawn arguments. There are conflicting decisions by the High Court in the matter. Here the order of the Tribunal was not passed in appeal but on a miscellaneous application directed towards rectifying a mistake apparent from the record. If the order under section 254(2) had taken the shape of modifying by way of amendment or rectification, the original order to some extent, then both of those jointly might have been appealable under section 260A; but an order of recall is clearly not appealable. Alternatively, even if appealable, the order being without jurisdiction, the writ application should be entertained in this case, as an exception, in the interest of expedition of the assessment proceedings. In the Tribunal's order in the reasoning portion a mistaken view was no doubt on record that regular assessment for separate assessment years included within the block period would be obviated by the block assessment; but this was mere reasoning. The Tribunal was not entitled under section 254(2) to rectify or amend any reasoning of it which did not affect the correctness of its final order. The ordering portion of the order, dated June 1, 1999, was to be cancelled and set aside so that the ordering portion of the order, dated April 22, 1998, shall revive and be of full effect. However, the Department hereafter was to read the reasoning of June 1, 1999, order also alongwith the body of the order, dated April 22, 1998, as by doing this, they would be proceeding correctly to make the block assessment and also the separate regular assessments for the individual assessment orders included in the block period.

CIT v. ITAT (1992) 196 ITR 590 (Orissa); ‑CIT v. ITAT (1992) 196 ITR 683 (Orissa); CIT v. ITAT (1994) 206 ITR 126 (AP); CIT v. Kelvin Jute Co. Ltd. (1980) 126 ITR 679 (Cal.); CIT v. M.P. Electricity Board (1994) 210 ITR 425 (MP); CIT v. R.M. & Co. (19841 148 ITR 353 (AP); CIT v. E. Sefton & Co. (P.) Ltd. (1989) 179 ITR 435 (Cad.); CIT v. Swadeshi Commercial Co. Ltd. (1992) 106 CTR 122 (Cal.); CIT v. U.P. Shoe Industries (1999) 235 ITR 663 (All.) and Shaw Wallace & Co. Ltd. v: Assistant CIT (1999) 238 ITR 13 (Cal.) ref.

(b) writ‑--‑

‑‑‑‑Alternate remedy‑‑‑Order passed without jurisdiction can be quashed in writ proceedings even if there is an alternate remedy‑‑‑Constitution of India, Art. 226.

R. N. Bajoria, J. P. Khaitan and A.K. Dey for Petitioner.

P.K. Mallick, I.C. Saha and Nizamuddin for Respondents.

JUDGMENT

In this writ application I have called for detailed arguments even before filing of affidavits. This has been done to expedite the matter. The reason why such expedition is needed is this order under challenge is an order of the Tribunal recalling its earlier order passed in appeal. The date of the recall is June 1, 1999 and the date of the earlier order is April 22, 1998.

By that earlier order, the Tribunal had set aside a block assessment made under Chapter XIV‑B of the Income Tax Act, 1961. By reason of the order of recall, the set aside block assessment revives. If instead of hearing the writ, a stay is granted, it will completely freeze assessment proceeding until further steps are taken. This is not a desirable course, as the matter, if the details are grasped, is really very short, usual and simple.

After the Tribunal passed its order in April, 1998, an Explanation was added to the Income‑tax Act in Chapter XIV‑B to section 158BA and under that Explanation regular assessments for all years in the block period are also required to be made.

In regard to the regular assessment for one particular assessment year in the block period of the same assessee, an earlier writ was filed and I have delivered a judgment in that matter, since reported in Shaw Wallace & Co, Ltd. v. Assistant CIT (1999) 238 ITR 13 (Cal.).

In that judgment I opined that there will be a block assessment for all the years in question but in addition thereto there will be also regular assessments for the separate years included in the block period. If any regular assessment remains incomplete at the time of search and seizure, then ordinarily that will be subsequently finalised after the block assessment is over.

A miscellaneous application under section 254(2) had been made in the Tribunal by the Revenue subsequent to the introduction of the amendment but prior to the delivery of my judgment in the earlier matter.

The Tribunal's order of April, 1998, in so far as the ordering portion is concerned, is in perfect accordance with the added Explanation and the earlier judgment delivered by me. However, in the body of the Tribunal's order, it was observed by the Tribunal that the block assessment will be one assessment and there would not be separate assessments for the individual assessment years included in the block period.

In the impugned order of June 1, 1999, the Tribunal has observed that remark of the Tribunal is a mistake apparent on the face of the record. On the basis of that the Tribunal has set aside the entire order passed on April 22, 1998.

The result of this is that because of the setting aside of the entire order, the block assessment which had been set aside, has been revived; the direction given in my earlier judgment that the regular assessment will be made within six months of completion of the block assessment is also rendered inoperative because my judgment assumed a future block assessment to be made in accordance with the Tribunal's views given in its order, dated April 22, 1998.

Mr. Bajoria, learned counsel for the petitioner, submitted that under section 254(2), the Tribunal can make amendments or rectifications which are obvious and which do not involve debate or dispute. He referred to the case of CIT v. Swadeshi Commercial Co. Ltd. (1992) 106 CTR 122 (Cal.) also the case of CIT v. E. Sefton & Co. (P.) Ltd. (1989) 179 ITR 435 (Cal.). He also said that the powers of the Tribunal under section 254(2) do not envisage a total recall of the order, and obliteration to it. It would not be within the jurisdiction of the Tribunal acting under this subsection to recall its earlier order totally and then and thereafter again enter into long drawn arguments for the purpose of rewriting its judgment.

In this regard, Mr. Bajoria gave me two Division Bench decisions of the Orissa High Court in CIT v. ITAT (1992) 196 ITR 590 and CIT v. ITAT (1992) 196 ITR 683 and a decision of the Andhra Pradesh High Court in CIT v. ITAT (1994) 206 ITR 126.

Mr. Bajoria's submission was that the order impugned should properly be dealt with by the writ Court so that the assessee is not in any manner prejudiced by this most imperfect order.

Mr. Mallick, appearing for the Revenue, submitted that if there is an amendment, introduced in the statute book which brings about retrospective changes, then and in that event the records of the Tribunal and its judgment and order might be rendered erroneous on its face necessitating invocation of jurisdiction under section 254(2). That this might be so was not even disputed by Mr. Bajoria. However, Mr. Mallick gave me three authorities in this regard (CIT v. Kelvin Jute Co. Ltd. (1980) 126 ITR 679 (Cal.); CIT v. R.M. & Co. (1984) 148 ITR 353 (AP) and CIT v. M.P. Electricity Board (1994) 210 ITR 425 (MP). As there was no dispute in regard to this point, I do not discuss these cases.

As regards the power of recall of the Tribunal of its own order in its entirety, Mr. Mallick gave the case of CIT v. Uttar Pradesh Shoe Industries (1999) 235 ITR 663 (All.). It is an Allahabad Division Bench judgment. There the Tribunal had disposed of a particular ground No‑5 in the memorandum stating that relief in that regard had already been given by the income‑tax Officer acting under section 154. This appeared later to be erroeous because the section 154 application has been rejected. In these facts, the Tribunal set aside its order with regard to ground No.5 and restore the appeal in the file for hearing on this point. The High Court found nothing wrong with this procedure as it appeared to be the only way to set them mistake right. Mr. Mallick submitted on this basis that this decision of the High Court is pointer towards the Tribunal's power to set aside its order under section 254(2) and then re-decide it once again.

Further, Mr. Mallick submitted that the writ petition should not be entertained as an appeal is now permitted under section 260A on the point of alternative remedy, the writ petition should fail.

In my opinion, Mr. Bajoria is right in his submission that invocation of section 254, subsection (2), in a matter like this was improper because the matter is one requiring long drawn arguments. Even though I have delivered a judgment in the matter and the Tribunal has done nothing wrong in trying to give full effect to it, yet, there are conflicting High Court decisions even now on record; the Tribunal should not have tried to give effect to my judgment on a section 254(2) application but should have made note of the judgment and thereafter said that the matter being one of debate and dispute its jurisdiction under section 254(2) was not properly invoked.

Regarding total recall of the Tribunal's own order, my view is that this type of absolute obliteration of its earlier order is not within the jurisdiction of the Tribunal. It cannot totally recall its order under section 254(2) and proceed to rehear the matter on de novo arguments.

The words of the said subsection refer to amendment or rectification, not a total recall. Even in the Allahabad decision given by Mr. Mallick, there was no total recall of the order but only a rehearing on a ground of appeal where there had been no real hearing in the first place at all. It is conceivable if section 254(2) were to clothe the Tribunal with a power of total recall that it decides in one way, then recalls the order and an absolutely different decision is reached on a second hearing after equally protracted arguments. This would be neither amendment it or rectification but a type of rehearing which even ordinary Courts of law can hardly indulge in.

Regarding the point of section 260A, in my opinion, an appeal would not be permissible from any and every order passed by the Tribunal under this section. If, say, an order of adjournment is passed, the assessee could not come in appeal to the High Court under section 260A. There are many instances of provisions allowing appeals where words such as every order, any order, all orders, etc., have been interpreted to mean and include only those orders which are substantially final in some sense or the other, and which finally dispose of or affect the parties' rights in regard to some important point in controversy. In my opinion, the words every order in section 260A mean exactly this. Also, to be appeal-able, the order of the Tribunal has to be passed in appeal. Here the impugned order of the Tribunal was not passed in appeal but in a miscellaneous application directed towards rectifying a mistake apparent from the record. If the order under section 254(2) had taken the shape of modifying by way of amendment or rectification, the original order to some extent, then both of those jointly might have been appeal-able under section 260A; but an order of recall is clearly not appeal-able. Alternatively even if appeal-able, the impugned order being also without jurisdiction, the writ application should be entertained in exception, in the interest of expedition of the assessment

To my mind, the Tribunal has fallen into the most serious error in recalling a good and right ordering portion of its order passed on April 22, 1998, by trying to rectify mistakes which cropped up into the reasoning portion. The ordering portion which allowed the block assessment to be redone was good and correct. It directed the block assessment to include the entirety of the period, that is in accordance with my earlier judgment also. This ordering portion needed no rectification and no amendment.

In the reasoning portion a mistaken view is no doubt on record that regular assessment for separate assessment orders included within the block period will be obviated by the block assessment; but this was mere reasoning. The Tribunal was not entitled under section 254(2) to rectify or amend any reasoning of it which did not affect the correctness of its final order. Thus, in one manner of speaking, to try to avoid a small evil, the Tribunal has fallen into a greater one.

In my opinion, although the Tribunal's impugned order needs correction it obviously proceeded bona fide and with the best of motives seeking only to give full effect to my earlier judgment; in so far as this motive is concerned, as I have earlier said, not only I do not find any fault with it, but I approve of this salutary procedure.

However, for the reasons as aforesaid, the writ application succeeds. The ordering portion of the impugned order, dated June 1, 1999, is cancelled and set aside so that the ordering portion of the order, dated April 22, 1998, shall revive and be of full effect. However, the Department hereafter will read the reasoning of the June, 1, 1999, order also alongwith the body of the order, dated April 22, 1998, as by doing this, they will be proceeding correctly to make the block assessment and also the separate regular assessments for the individual assessment years included in the block period. In proceeding with these assessments, the Department shall be guided also properly by the judgment and reasoning given in my earlier Shaw Wallace judgment, the reference to which I have given above.

With the above order, the writ application is finally disposed of.

As affidavits were not permitted, the allegations in the petition cannot be taken by the Revenue to have been admitted to any part at all.

There will be however, no order as to costs.

Xerox certified copy of this order, if applied for, be given as expeditiously as possible.

M.B.A./349/FCOrder accordingly.