TMI Blog1973 (10) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... sferred by the firm to its partners before the expiry of the statutory period prescribed under the 1922 Act. The Income-tax Officer, dealing with the assessment proceedings for the year 1964-65, came to the conclusion that the development rebate should be withdrawn and accordingly, he issued a notice under section 154 of the Income-tax Act, 1961 (hereinafter referred to as " the 1961 Act "). The 2nd respondent-firm, the assessee, objected to the withdrawal of the development rebate but these objections were overruled and the Income-tax Officer passed an order purporting to have been passed under section 155 of the 1961 Act, withdrawing the rebate granted for the assessment years 1960-61 and 1961-62. These orders withdrawing the rebate, were passed by the Income-tax Officer on November 8, 1965. Against the decision of the Income-tax Officer, the second respondent-firm filed appeals before the Appellate Assistant Commissioner, but both the appeals were dismissed by the Appellate Assistant Commissioner by his order dated May 4, 1967, and thus the decision of the Income-tax Officer was confirmed. Against the decision of the Appellate Assistant Commissioner, the second respondent-firm f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the main contention on behalf of the petitioner is that the Tribunal had no jurisdiction to rectify the order as it purported to do. On behalf of the second respondent-firm two preliminary objections have been urged. It was first contended that the alternative remedy by way of a reference against the order of the Tribunal rectifying its earlier order being the order of rectification dated August 26, 4970, is available to the department according to law and, therefore, this extraordinary remedy under articles 226 and 227 of the Constitution should not be allowed to be availed of by the department. This preliminary objection must be rejected because it is well-settled law that when a particular Tribunal has acted without jurisdiction, the question of alternative remedy does not arise and if the High Court, while exercising powers under articles 226 and 227 finds that the Tribunal did exercise its powers, though it had no jurisdiction to do so, the order of the Tribunal in question will be quashed and set aside and the question of alternative remedy in such a case does not arise. This well-settled position in law arises from the fact that an order passed without jurisdiction is non ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on December 17, 1970. On the facts of this case, it cannot be said that there has been such delay or laches on the part of the revenue as would disentitle the petitioner to get the relief that he seeks at the hands of this court. Coming now to the merits of the case, we may point out that in passing the order of August 26, 1970, the Tribunal has relied upon the decision of the Supreme Court in M. M. Parikh, Income-tax Officer v. Navanagar Transport and Industries [1967] 63 ITR 663 (SC). The relevant passage on which the Tribunal relied occurs at page 670 of the report. From the bottom of page 669 in this case, the Supreme Court was considering whether orders under different sections of the 1922 Act were assessment orders or whether they were orders passed in the course of assessment proceedings. At page 670 Shah J. (as he then was), delivering the judgment of the Supreme Court, has observed : " Again by section 35(11), as added by the Finance Act of 1958, development rebate in respect of a ship, machinery or plant under section 10(2)(vib) could be deemed to have been wrongly allowed if the ship, machinery or plant was sold or otherwise transferred, or the amount credited to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of assessment. " In S. Sankappa's case [1968] 68 ITR 760 (SC), Bhargava J. has pointed out that in the context of section 297(2)(a) of the Act of 1961 the main question which the court or the appropriate authority has to consider is whether the subsequent proceedings are proceedings for the assessment of the assessee concerned. The exact words used are, " proceedings for the assessment of that person for that year may be taken and continued as if this Act had not been passed ", and under section 297(2)(a), notwithstanding the repeal of the Indian Income-tax Act, 1922, where a return of income has been filed before the commencement of the Act of 1961 by any person for any assessment year, proceedings for the assessment of that person for that year may be taken and continued as if the Act of 1961 had not been passed. At page 767 in S. Sankappa's case [1968] 68 ITR 760 (SC) it is observed : " Consequently, when the Income-tax Officer passed the orders dated 20th December, 1966, and apportioned the income of the firms between the various partners, the orders which he made were clearly orders in proceedings for assessment and it was in order to give effect to these orders in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to have been wrongly allowed, and the Income-tax Officer may, notwithstanding anything contained in this Act, proceed to recompute the total income of the assessee for the relevant year as if the recomputation is a rectification of a mistake apparent from the record within the meaning of this section and the provisions of sub-section (1) shall apply accordingly, the period of four years specified therein being reckoned from the end of the year in which the transfer takes place or the money is so utilised. " It is, therefore, clear that by the fiction set out in the last portion of section 35(11) recomputation of total income of the assessee for the relevant year in view of the transfer of the machinery, ship or plant in respect of which development rebate has been allowed in the past within the statutory period of 10 years from the end of the year in which the ship was acquired or the machinery or plant was installed amounts to an order of rectification under section 35(1), and such recomputation is permissible within a period of four years from the end of the year in which the ship, machinery or plant was transferred or the money from the reserve account is utilised as sub-cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 760 (SC), no other conclusion is possible and section 34(3)(b) can only be attracted and in the light of the principle of harmonious interpretation it must be held that provisions of section 297(2)(b) are attracted only if the Act of 1922 is applicable and not otherwise. In the present case, in view of section 297(2)(a) as interpreted by the Supreme Court in S. Sankappa's case [1968] 68 ITR 760 (SC), we must proceed on the footing that provisions of section 155 of the 1961 Act including provisions of section 34(3)(b) of that Act do not apply to this case. A Division Bench of this court in Mandal Ginning and Pressing Co. Ltd. v. Commissioner of Income-tax [1973] 90 ITR 332 (Guj) has held that an assessee has no right to appeal under section 30(1) of the Act of 1922, against an order of rectification made under section 35(1) of that Act. In view of this decision of this court, it is obvious that the assessee had no right of appeal and the appeal before the Appellate Assistant Commissioner was not competent and, therefore, it was rightly held by the Tribunal by its order dated March 5, 1970, that the appeal before the Appellate Assistant Commissioner was not competent. The que ..... X X X X Extracts X X X X X X X X Extracts X X X X
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