2009 (10) TMI 113 - HC - Income Tax

Rectification of mistake - Any order passed under section 254(2) either allowing amendment or refusing to amend gets merged with the original order passed. Successive application for rectification of the original order cannot be maintained as it will defeat the object of section 254(2) of the Act. Section 254(2) of the Income-tax Act 1961 provides for rectification of any mistake apparent from the order passed by it under section 254(1) of the Act. Once this has been done no further application is maintainable. The remedy by way of appeal is the only course open. Apparently the second petition filed for rectification appears to be one intended to bridge the long delay in not challenging the order of the Appellate Tribunal dated November 27 2000 and the rectification order dated April 25 2001. The writ petitions deserve to be dismissed on the ground of failure to pursue the alternative remedy and also on the ground of delay and laches which has not been explained. - Both the writ petitions are therefore dismissed

Summary

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.