TMI Blog2000 (8) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Commissioner in appeal. The Income-tax Appellate Tribunal, on November 7, 1994, allowed the assessee's appeal and, setting aside the assessment orders, restored the matters to the file of the Assessing Officer, directing him to pass a fresh order after allowing the assessee the opportunity to support the documents that it had earlier filed before him. Neither party sought to file any reference application there against but the assessee filed an application before the Tribunal under section 254(2) of the Income-tax Act, 1961, Seeking to rectify it on the basis that a contention that it had raised had not been decided. On January 4, 1995, the Tribunal allowed the rectification application. It noted that the assessee's objection was t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 256(2) of the Income-tax Act and, by the order under challenge, the same was dismissed. The order under challenge followed an earlier decision of the High Court, in the case of Popular Engineering Co. v. CIT [1983] 140 ITR 398 (MP), in which it had been held that a reference against an order of rectification under section 254(2) was not maintainable. In the earlier judgment, the High Court said : "The language used in section 256(1) shows that the order contemplated under section 256(1) is the order passed under section 254 of the Act. Under section 254(1) the Appellate Tribunal passes an order on the appeal filed by the assessee or the Revenue. This order may be amended under section 254(2) of the Act with a view to re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect to the other provisions contained in this section, the Appellate Tribunal shall, within one hundred and twenty days of the receipt of such application, draw up a statement of the case and refer it to the High Court : Provided that the Appellate Tribunal may, if it is satisfied that the applicant was prevented by sufficient cause from presenting the application within the period hereinbefore specified, allow it to be presented within a further period not exceeding thirty days. (2) If, on an application made under sub-section (1), the Appellate Tribunal refuses to state the case on the ground that no question of law arises, the assessee or the Commissioner, as the case may be, may, within six months from the date on which he is served ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has allowed the assessee a reasonable opportunity of being heard : Provided further that any application filed by the assessee in this sub-section on or after the 1st day of October, 1998, shall be accompanied by a fee of fifty rupees." Section 256 empowers the assessee and the Revenue to "require the Appellate Tribunal to refer to the High Court any question of law arising out of" an order passed under section 254. Section 254(1) states that the Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. It would appear that the High Court read section 254(1) as referring only to orders passed by the Tribunal on an appeal. We do not think that that would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is erroneous. There is no doubt in our mind, particularly having regard to the fact that the deletions of the additions that had been made by the Assessing Officer were made in rectification proceedings, that the questions that were sought to be referred were questions of law and that the High Court ought to have called upon the Tribunal to refer the same to it for its consideration. Learned counsel for the assessee submitted that pursuant to the order of the Tribunal in the rectification proceedings, the amounts of the additions had been assessed in the hands of the partners of the assessee and that, therefore, nothing survived for consideration in so far as the assessee was concerned. It is unclear whether the assessments in the hands ..... X X X X Extracts X X X X X X X X Extracts X X X X
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