LACHMANN DASS BHATIA HINGWALA PVT LTD V. ASSISTANT COMMISSIONER OF INCOME TAX

W.P.(C)/6461/2010

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The case involves Lachman Dass Bhatia Hingwala Pvt Ltd, the petitioner, contesting decisions made by the Assistant Commissioner of Income Tax, the respondent, through a series of writ petitions. Initially, appeals under Section 260A of the Income Tax Act were deemed not maintainable by a Full Bench of the High Court. Subsequently, the petitioner filed writ petitions challenging the ITAT's power to recall its own orders. The legal debate centered around the interpretation of the ITAT's powers under Section 254(2) of the Income Tax Act, particularly in the context of the Supreme Court's decision in Honda Siel Power Products Ltd. v. Commissioner of Income-Tax, which suggested that the ITAT could recall its orders under certain circumstances. The High Court, after reviewing the submissions and precedents, directed the ITAT to re-evaluate the recall application in accordance with the principles laid down by the Supreme Court.

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 762691 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 03-03-2011
• Assessment Year: misc
• Other Referred Cases: Honda Siel Power Products Ltd. v. Commissioner of Income-Tax, ACIT Vs. Saurashtra Kutch Stock Exchange Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: DEEPAK CHOPRA
• Assessee Lawyers: R M MEHTA
• Keywords: Income Tax; Income tax appellate tribunal; Recall of order; Writ petition
• Section: 254(2); 260A

Judgement Text

". qr i' i, 16 to 2I 'F IN TTIE HIGH COURT OF DELHI AT NEW DELHI ,s' + ./w.P.(c) 646012010 LACI-IMAN DASS BI{ATIA HINGWALA PVT LTD .... Petitioner Through VIr. R.M. Mehta, Adv. VETSUS ASSISTANT COMMISSIONER OF INCOME TAX .... Respondent Through Mr. Deepak Chopra, Adv. + w.P.(c) 646U20r0 q LACI-IMANN DASS BHAI.IA HING A/ALA PVT I,TD .... PelitioneT Through Mr. R.M. Mehta, Adv. versus ASSISTANT COMMISSIONER OF INCOME TAX .... Respondent Through Mr. Deepak Chopra, Adv. + w.P.(c) 6462t20r0 -^ LACHMAN DASS BHATIA HINGWALAL PVT LTD .... Petitioner e Through hdr. R.M. Mehta, Adv. VEl'SUS ASSISTANT COMMISSIONER OF INCOME TAX .... Responcient Through Mr. Deepak Chopra, Adv. + w.P.(c) 6463t20r0 I,ACHMAN DASS BI{ATIA FIINGWALA PVT L'I'D .... Petitioner ' Through hdr. R.M. Mehta, Adv. VETSUS V/. P. (C) Nos.6460-55 / 2o1o Page 1 of 7 Digitally Signed By:AMULYA Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. Signature Not Verified I ,l ASSISTANT COMMISSIONER oF INCOME TAX .... Respondent Through Mr. Deepak Chopra, Adv. + w.P.(c) 6464/2010 LACHMAN DASS BI{ATIA HINGWALA PVT LTD .... petitioner Through Mr. R.M. Mehta, Adv. VETSUS ASSISTANT COMMISSIONER oF INCOME TAX .... Respondent Through Mr. Deepak Chopra, Adv. + w.P.(c) 646s/20r0 LACHMAN DASS BHATIA HINGWALA pvT LTD .... petitioner Through Mr. R.M. Mehta, Adv. 4) VETSUS ASSISTANT COMMISSIONER oF INCOME TAX .... Respondent Through ' 4r. Deepak Chopra, Adv. CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE SANJIV KHANNA ORDER 03.03.2011 The present writ petitions have a different factual matrix to project. Initially the assessee-petitioner preferred.appeals under Section 260A of the Income Tax Act, 1961 forming the subject matter of ITA No.724/2010 and other appeals and a Full Bench of this courl on 6th August, 2010 ruled oh W. P.(c) Nos.6460-65 /ZOhO Page 2 of 7 {'- thus:- 4, \"As the appeals in the present case ,are not rnaintainable, we are disposed to think, the same can be convefted by filing proper application for conversion and by further complying with -tir\" ,r\"\"\"ssary fo'nalities as required under the rules to prefer the writ petition. The reference is answered accordingly. 2. Thereafter, the present writ petitions were filed. Ivft. R.M. Mehta, learned counsel appearing for the assessee-petitioner raised a question in the writ petitions that the Income Tax Appellate Tribunal (for short .the Tribunal') has no power to recall its own order under any circumstances. Learned counsel had cited series of Division Bench decisions of this court in favour of the proposition. At that juncture, I 4r. Deepak chopra, lcamed counsel appearing for the Revenue placed heavy reliance on Honda siel Power Products Ltcl. v. commissioner of rncome-Tax, 120071295 ITR 466 (SC). Thereafter, the matter was referred to a larger Bench and eventually the Full Bench in paragraph 29 of the order dated 2.4't'Dccember, 2010 expressed the following view:- \"29.In view of our aforesaid analysis, we proceed to state our conclusions in seriatim as follows: (A) The decision rendered rn Honda sier power products Ltd., (supra) by the Apex court is an authority for the proposition that the Income-tax Appellate Tribunal under certain circumstances can recall its own order and there is no absolute prohibition. (B) In view of the law laid down in Honda siel Power proiducts Lttl., (supra) by the Apex a W.P.(c) Nos.6460-65 /z}to Page 3 of 5 Couft, the decisions rendered by this Court in K.L. Bhatis (supra), Deeksha Suri (supra), Koron and Co. (supra), J.lY. Sahni (supra) and Smt. Boljeet Jolly (supra) which luy down the principle that the tribunal under no circumstances can recall its order in entirety do not lay down the correct statement of law. (C) A\"V other decision or authority which has been rendered by pressing reliance on K.L. Bhotict (supra) and the said line of decisions are also to be treated as not laying down the correct proposition of law that the tribunal has no power to recall an order passed by it in exercise of power under Section 254(2) of the Act. (D){fhe tribunal, while exercising the power of rectification under Section 254(2) of the Act, can recall its order in entirety if it is satisfied that prejudice has resulted to the party which is attributable to the tribunal\"s mistake, etror or omission and which effor is a manifest error and it has nothing to do with the doctrine or concept of inherent power of review. (E) When the justification of an order passed by the tribunal recalling its own order is assailed in a writ petition, it is required to be tested on the anvil of law laid down by the Apex Court in Honda Siel Power Products Ltd., (supra) and Sauroshtru Kutch Stock Exchange Ltd. (supra).\" 3. Now the matter has been listed before us. It is subrnitted by Mr. R.M Mehta, learned counsel for the petitioner that the Tribunal could not have rccalled the order on the anvil of the ratio laid down in Honda Siel Power Proclucts Ltd. (Supra) and ACIT Vs. Saurashtrtr Kutch Snck Exclmnge Ltd., [2008] 305 ITR 227 (SC) as the application for recall does not satisfy the requisite conditions. Mr. Deepak Chopra, learned counsel appearing for the Revenue, per contra, has submitted that the W.P.(c) Nos.6460-55 l2OIO Page 4 of 5 r ...s ..-._e' 14 order passed by the Tribunal squarely falls within the four corners of the ' decisions rendered by the Apex Court in the aforesaid cases. 5. on a perusal of the order passed by the Tribunal, we are of the considercd opinion that the Tribunal has really not adverted to the issue of recall keeping in view the aforesaid two decisions. 5. In view of the aforesaid, the orders passed by the Tribunal are set aside and it is directed that the Tribunal shall decide the application preferred under Section 254(2) of the Act in th\"e backdrop of the Full Bench decision rendered by this Court. The said exercise shall be completed within a period of 8 weeks from the date of receipt of thc order passed today. The writ petitions are accordingly disposed of, without any order as to costs. It is clarified that this Court has not expressed any opinion on merits of the application under Section 254 (2) of the Act. Order dasti under signature of the.Court Master. fu'r/' CHIEF JUSTICE 'l ( (- KIIANNA, J. tryo3,2orr a ANJIV W.P.(C) Nos.6460-65 /2O1o Page 5 of 5 "