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2006 (7) TMI 168 - HC - Income TaxAppellate Tribunal allowed the application made u/s 254 - Whether any ground was made out for entertaining the application made u/s 254 and if so, whether these grounds satisfy the requirement of section 254, entitling the Tribunal to rectify their main order passed in appeal? - HELD THAT:- In the present case, we find from the records that a contention was raised on behalf of the assessee before the Tribunal at the time of hearing of the appeal that preliminary objections raised by the Department to the appeal filed by the assessee are only academic as the appeal stood withdrawn in the month of April, 1999 when the assessee obtained a certificate of settlement under the Kar Vivad Samadhan Scheme but such a contenion raised by the assessee was turned down by the Tribunal As a matter of fact, we find that in the impugned order of the Tribunal on the application filed by the assessee u/s 254(2) of the Act that the Tribunal has relied on the decisions of CIT v. D.P.F. Textiles Ltd. [1999 (7) TMI 37 - MADRAS HIGH COURT], Ahmedabad Electricity Co. Ltd. v. CIT [1992 (4) TMI 29 - BOMBAY HIGH COURT], Gauri Sahai Ghisa Ram v. CIT[1979 (2) TMI 53 - ALLAHABAD HIGH COURT] and Chhat Mull Aggarwal v. CIT [1978 (11) TMI 58 - PUNJAB AND HARYANA HIGH COURT] to come to the conclusion that the assessee would have a right to appeal even if additions were made on the concessions made by the assessee. We also find that in the impugned order, the Tribunal has relied on the decision of the Supreme Court in Dr. Mrs. Renuka Datla v. CIT [2002 (12) TMI 6 - SUPREME COURT] in which it has been held that if an appeal is pending, it is not for the designated authority to question the possible outcome of the appeal, etc., nor for the High Court to hold that the appeal was sham, ineffective or infructuous. Hence, it appears to us that in the impugned order on the application u/s 254(2) of the Act, the Tribunal has reconsidered the contentions of learned counsel for the parties raised at the time of hearing of the appeal and has reversed its earlier finding in the appellate order dated November 26, 2001, that the appeal was not competent and was void ab initio and that the fact that the assessee had obtained a certificate under the Kar Vivad Samadhan Scheme would not bar the Tribunal to analyse and adjudicate the preliminary objections of the Department that the appeal was not competent and void ab initio. The Tribunal has thus reheard the appeal before it and has taken a different view on the merits of the contentions of the parties in the impugned order, which was outside the scope and purview of section 254(2) of the Act. Hence, both the substantial questions of law are answered in the negative and in favour of the Department and against the assessee. In the result, the appeal is allowed and the impugned order of the Tribunal, passed is set aside.
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