1972 (8) TMI 39 - HC - Income Tax

This is an application under article 226 of the Constitution of India in the constitutional writ jurisdiction of this court inter alia for the issue of a writ in the nature of certiorari for quashing the impugned order - Whether Tribunal has inherent power to review

Summary

Issues Involved:
1. Refusal of registration of the petitioner-firm under the Income-tax Act for the assessment years 1960-61 and 1961-62.
2. Assessment of the petitioner-firm as an unregistered firm.
3. Rectification of findings by the Income-tax Appellate Tribunal.
4. Tribunal's power to review its own orders.

Detailed Analysis:

Refusal of Registration of the Petitioner-Firm:
The petitioner, a partnership firm, applied for registration under the Income-tax Act but was refused by the Income-tax Officer, who assessed the firm as an unregistered entity. The officer rejected the claim that Smt. Gomti Devi was a partner, deeming her a mere name-lender. This refusal was upheld by the Appellate Assistant Commissioner and later by the Income-tax Appellate Tribunal for the assessment years 1960-61 and 1961-62.

Assessment as an Unregistered Firm:
For the assessment year 1961-62, the Income-tax Appellate Tribunal, "E" Bench, Calcutta, held that there was no evidence to show that Smt. Gomti Devi was the benamidar of Durga Prasad. Consequently, the firm was rightly assessed as an unregistered firm. However, in a separate appeal for the same assessment year, the Tribunal concluded that Durga Prasad was not liable to be assessed individually for the business income, as the business was conducted by the partnership firm.

Rectification of Findings by the Tribunal:
The petitioner sought rectification of the Tribunal's findings from the order dated September 5, 1969, claiming errors on the face of the record. The petitioner argued that certain relevant materials were not considered. The Tribunal dismissed this application, stating that no error apparent on the face of the record justified rectification. It further clarified that considering subsequent materials would amount to a review, which the Tribunal had no power to conduct.

Tribunal's Power to Review:
The petitioner contended that the Tribunal, as an appellate authority, inherently possessed the power to review its orders to rectify mistakes. This argument was supported by referencing the Supreme Court case of Income-tax Officer v. M. K. Mohammed Kunhi, which recognized the Tribunal's ancillary powers necessary for effective appeal disposal. However, the Tribunal maintained that it lacked express statutory power for such a review, distinguishing between rectifying errors and conducting a review. The inherent power to rectify a wrong was not applicable as no inadvertent error was found in the order dated May 13, 1971.

Conclusion:
The court dismissed the petition, ruling that the Tribunal had no error to rectify and lacked the power to review its own orders unless expressly provided by statute. The rule nisi was discharged, and no order as to costs was made.