TMI Blog1964 (8) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... he Excess Profits Tax Officer had failed to make adjustments for capital variation in the standard period and the chargeable accounting periods as required by section 6 of the Excess Profits Tax Act, 1940, read with rule 5, Schedule II to the Act. Being aggrieved by the order, the petitioner filed appeals before the Appellate Assistant Commissioner of Income-tax in respect of each of the relevant chargeable accounting periods and those appeals were disposed of by the Appellate Assistant Commissioner. Before the said appeals were heard, the petitioner filed a specific ground in respect of adjustment of standard profits due to the increase or decrease of the capital in the chargeable accounting periods. This ground was considered but rejected by the Appellate Assistant Commissioner. Thereafter, an appeal was preferred before the Income-tax Appellate Tribunal, Allahabad Bench, at Allahabad, and the following specific grounds of appeal was taken: Because the learned Excess Profits Tax Officer and the Appellate Assistant Commissioner have erred in not allowing to the assessee proper standard profits in accordance with the standard period subject to the adjustment on account of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the jurisdiction vested in it. Two questions, therefore, fall to be considered: One, whether there was, in fact, any period of limitation for making an application for rectification under the Excess Profits Tax Act and, if there was no period of limitation, its effect? Secondly, whether in a case, such as the present, where the Tribunal inadvertently failed to deal with the ground raised and the petitioner had followed other remedies before invoking the writ jurisdiction in this court, can it be said that there were laches in filing the writ petition and, therefore, this court should not exercise its extraordinary writ jurisdiction? On the first question there seems to be a clear lacuna in the Excess Profits Tax Act. The Tribunal came into the picture as an appellate authority in place of the Commissioner after the Excess Profits Tax Act had already come into force. Section 19 deals with the powers of the Commissioner. Sub-section (2) reads: On the coming into operation of Part II of the Indian Income-tax (Amendment) Act, 1939, sub-section (1) shall cease to have effect, but thereafter any Excess Profits Tax Officer or any person in respect of whose business an order und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned standing counsel, on the other hand, basing himself on the following words, and the Tribunal shall have all such powers in disposing of the appeal as it has in respect of appeals preferred to it under the Indian Income-tax Act, 1922, contends that the power of the Tribunal conferred under sub-section (2) of section 19 of the Excess Profits Tax Act no doubt is the same as given to the Appellate Assistant Commissioner but only up to the stage of disposing of the appeal under section 33 of the Income-tax Act, 1922, and not beyond. For everything beyond that stage, the Excess Profits Tax Act has made specific provision under section 20 and section 21 of the Act. The application of the Income-tax Act having been specifically restricted when dealing with the provision for appeals under the Excess Profits Tax Act, it is not possible, so the argument proceeds, to give the impugned section a wider meaning. It is, however, unnecessary to resolve these conflicting contentions in these proceedings as I have come to the conclusion that even if section 19(2) does not come to the rescue of the petitioner, the inherent powers of the Tribunal will be available to rectify a mistake committe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al of the affidavit filed shows that the petitioner was all along diligently pursuing some remedy or other, though the petitioner may not have followed the correct remedy. The excess profits tax appeals were disposed of by the Tribunal on 24th April, 1951. Substantial relief in the income-tax appeals and, consequently, in the excess profits tax appeals was granted. Reference applications under section 66(1) were filed, though no question regarding the standard profits and necessary adjustment was raised. These applications were rejected. Applications under section 66(2) were thereafter filed and these were allowed by an order dated April 19, 1956. While these applications under section 66(2) were pending and before the period of four years had expired, the petitioner had applied on 11th March, 1954, to the Central Board of Revenue that in giving effect to the Appellate Tribunal's order the necessary capital adjustment be made and standard profits be recomputed. By a letter dated 25th May, 1956, the Commissioner of Income-tax wrote to the petitioner that his petition dated 11th March, 1954, addressed to the Central Board of Revenue and the subsequent petition dated the 24th May, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h directions has to be read in the context of and in conjunction with the provisions of section 66(1) and (2), and under the guise of a direction under section 66(4) the High Court cannot refer the case back to the Tribunal to find new facts or embark upon a new line of enquiry..... Till this decision of the Supreme Court, the law as to the scope of section 66(4) was not well settled. This court had taken the view that the provisions of section 66(4) were very wide and even in cases where the Tribunal had refused to refer some questions under section 66(1), an order could be made under section 66(4) calling upon the Tribunal to refer such questions. The Supreme Court in Commissioner of Income-tax v. Scindia Steam Navigation Co. Ltd. [1961] 42 I.T.R. 589; [1962] 1 S.C.R. 788 has, however, after reviewing the conflict which prevailed, laid down the scope and limitation of the words question of law arising out of the order of the Tribunal, which appear in section 66(1) of the Act, 1922, and one ground on which such reference would lie was held to be when a question of law is raised before the Tribunal but the Tribunal fails to deal with it, it must be deemed to have been dealt ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
