Saroj Ceramics Industries V. Income Tax Officer

SCA/15074/2013

AI Insights

Saroj Ceramics Industries filed a petition under Article 226 of the Constitution of India challenging the ITAT's order which rejected their rectification application concerning an earlier ITAT decision that confirmed additions made by the assessing officer on unexplained investments in factory building and land. The High Court had previously dismissed a tax appeal by the assessee, confirming the ITAT's earlier decision. The main legal issue was whether the ITAT's order rejecting the rectification application was appealable under Section 260A of the Income Tax Act. The court found that such an order was not appealable under Section 260A, as it did not meet the criteria of an 'order passed in appeal' but was a decision on a rectification application under Section 254(2).

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 793961 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 08-10-2013
• Assessment Year: misc
• Other Referred Cases: Chem Amit vs. Assistant Commissioner of Income Tax, Mandal Ginning & Pressing Co. Ltd vs. Commissioner of Income Tax, Madhav Marbles & Granites Vs. Income Tax Appellate Tribunal, Visvas Promoters (P) Ltd vs. ITAT, Apex Metchem (P) Ltd vs. ITAT, Honda Siel Power Products Ltd vs CIT, ACIT vs. Saurashtra and Kutch Stock Exchange Ltd, CIT vs. Bharat Engineering and Construction Co., Nirma Industries Ltd vs. Deputy Commissioner of Income Tax, Kunhayammed And others vs. State of Kerala, Commissioner of Income-tax Vs. Cadila Chemicals Pvt. Ltd., Shaw Wallace & Co Ltd Vs. ITAT
• Laws Referred To: Income Tax Act, 1961, Constitution of India, 1950
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: MANISH SHAH
• Keywords: Factory building; Miscellaneous Application; Rectification Application; Unexplained investment; Valuation report; Factory land
• Section: 143(3); 254(2); 260A; 254(1)

Judgement Text

"C/SCA/15074/2013 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION NO. 15074 of 2013 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE M.R. SHAH ­ sd/­ and HONOURABLE MS JUSTICE SONIA GOKANI ­ sd/­ ============================================= 1. Whether Reporters of Local Papers may be allowed to see the judgment ? YES 2. To be referred to the Reporter or not ? YES 3. Whether their Lordships wish to see the fair copy of the judgment ? NO 4. Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? NO 5. Whether it is to be circulated to the civil judge ? NO ============================================= SAROJ CERAMICS INDUSTRIES....Petitioner(s) Versus INCOME TAX OFFICER....Respondent(s) ============================================= Appearance: MR MANISH J SHAH, ADVOCATE for the Petitioner(s) No. 1 ============================================= CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MS JUSTICE SONIA GOKANI Date : 08/10/2013 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1.0. By way of this petition under Article 226 of the Constitution of India, the petitioner has prayed for an appropriate writ, order or direction quashing and setting aside the impugned order passed by the learned Income Tax Appellate Tribunal (hereinafter referred to as the Page 1 of 18 C/SCA/15074/2013 JUDGMENT “Tribunal”) dated 30.5.2013 passed in M.A. No. 33/RJT/2012, by which, the learned Tribunal has rejected the said application, which was submitted by the petitioner herein­assessee to rectify the earlier order passed by the Tribunal passed in ITA No. 675/RJT/2010 for assessment year 2006­07. 2.0. The facts leading to the present petition in nutshell are as under: 2.1. That the assessing officer passed an assessment order under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) for the assessment year 2006­07 making addition of Rs. 24,46,550/­ being unexplained investment in factory building and making further addition of Rs.8,64,485/­ on account of unexplained investment in factory land based on the sub­Registrar’s valuation. 2.2. Being aggrieved and dissatisfied with the assessment order, the petitioner­assessee preferred appeal before the CIT(A) and by order dated 3.11.2009 the learned CIT(A) dismissed the said appeal confirming the aforesaid additions made by the Assessing Officer. 2.3. Being aggrieved and dissatisfied with the order passed by the learned CIT(A) in confirming the aforesaid additions made by the Assessing Officer, the assessee preferred appeal before the learned Income Tax Appellate Tribunal under Section 254(1) of the Act being Appeal No.675 of 2010. That by judgment and order dated 27.4.2012 the learned Tribunal dismissed the said appeal and confirmed the aforesaid additions. 2.4. Feeling aggrieved and dissatisfied with the judgment and Page 2 of 18 C/SCA/15074/2013 JUDGMENT order passed by the learned ITAT dated 27.4.2012 passed in ITA No. 675/RJT/2010, the assessee preferred appeal before this Court under Section 260 A of the Act being Tax Appeal No. 653 of 2012 and by detailed judgment and order dated 12.2.2013 the Division Bench of this Court dismissed the said Tax Appeal No.653 of 2012 confirming the judgment and order passed by the learned Tribunal dated 27.4.2012 passed in ITA No. 675 of 2010 confirming the aforesaid additions. 2.5. At this stage it is required to be noted that aforesaid Tax Appeal No.653 of 2012 was preferred by the assessee on 15.9.2012 and during the pendency of the said Tax Appeal, the assessee preferred Miscellaneous Application before the learned Tribunal to modify / recall the order passed in ITA No.675 of 2010 challenging inter alia that there are two error apparent on the face of record. It is also required to be noted at this stage that when Tax Appeal No. 653 of 2012 came to be heard by this Court on 12.2.2013 it was not pointed out before the Division Bench of this Court that assessee had already preferred Miscellaneous Application before the learned Tribunal and the same is pending. On the contrary, learned advocate for the assessee made submissions before this Court on merits against the judgment and order passed by the learned Tribunal passed in ITA No.675 of 2010 and considering and dealing with all the submissions made, the division Bench dismissed the Tax Appeal No.653 of 2012 on merits and confirmed the judgment and order passed by the learned Tribunal passed in ITA No.675 of 2010. 2.6. That the aforesaid Miscellaneous Application came up for hearing before the learned Tribunal on 24.1.2013 and the learned advocate for the assessee asked for the adjournments, which was granted by the learned Tribunal. It is also required to be noted at this Page 3 of 18 C/SCA/15074/2013 JUDGMENT stage that it was not pointed out before the learned Tribunal that against the judgment and order passed by the learned Tribunal, which is sought to be reviewed / modified, the assessee has already preferred Tax Appeal before High Court. It is required to be noted at this stage that by the time, Tax Appeal No. 653 of 2012 preferred by the assessee against the impugned judgment and order dated 27.4.2012 passed by the learned Tribunal passed in ITA No. 675/RJT/2010, came to be dismissed by this Court on merits by order dated 12.2.2013 and thereafter Miscellaneous Application came up for hearing before the learned Tribunal on 12.4.2013. Despite the above, the assessee did not point out before the learned Tribunal that against the judgment and order passed by the learned Tribunal passed in ITA No. 675/RJT/2010, which is sought to be reviewed by Miscellaneous Application, Tax Appeal has been dismissed by the High Court. That thereafter, by impugned order dated 30.5.2013 learned Tribunal has dismissed the Miscellaneous Application No. 33 of 2013. 2.7. Being aggrieved and dissatisfied with the impugned order passed by the learned Tribunal passed in rectification application in dismissing the same, the assessee has preferred present petition under Article 226 of the Constitution of India. 3.0. First question which is posed for the consideration of this Court is whether against the impugned order passed by the learned Tribunal passed in Miscellaneous Application and rejecting the said Miscellaneous Application, the appeal before the High Court as provided under Section 260 A of the Act would be maintainable or not and if the said question is answered in affirmative the petitioner should be relegated to prefer appeal as provided under Section 260 A of the Act. Page 4 of 18 C/SCA/15074/2013 JUDGMENT 4.0. On the aforesaid issue / question, Shri J.P. Shah, learned counsel for the petitioner has vehemently submitted that as per Section 260 A of the Act appeal would be maintainable before the High Court against the order passed by the learned Tribunal in rejecting the rectification application. It is further submitted by Shri J.P. Shah, learned counsel for the petitioner that if the learned Tribunal passes an order in rectification modifying the earlier order, in that case, it would be an order in appeal and hence against the said order the appeal before the High Court would be maintainable under Section 260 A of the Act. It is submitted by Shri J.P. Shah, learned counsel for the petitioner that however if the Tribunal dismisses the rectification application, in that case, against the said order appeal under Section 260 A of the Act before the High Court would not be maintainable and therefore, only remedy available to the assessee would be to prefer Special Civil Application under Articles 226 / 227 of the Constitution of India challenging the order passed by the learned Tribunal dismissing the rectification application. 4.1. In support of his above submissions, Shri J.P. Shah, learned counsel for the petitioner has heavily relied upon the following decisions. (1). Chem Amit vs. Assistant Commissioner of Income Tax reported in (2005) 272 ITR 397 (Bom). (2). Mandal Ginning & Pressing Co. Ltd vs. Commissioner of Income Tax reported in (1973) 90 ITR 332 (Guj). (3). Madhav Marbles & Granites Vs. Income Tax Appellate Tribunal reported in (2012) 22 Taxmann. Com 51 (Rajasthan) (4). Visvas Promoters (P) Ltd vs. ITAT reported in (2010) 323 ITR 114 (Madras). (5). Apex Metchem (P) Ltd vs. ITAT reported in (2009) 318 Page 5 of 18 C/SCA/15074/2013 JUDGMENT ITR48/184 Taxman (Rajasthan) 5.0. Shri J.P. Shah, learned counsel for the petitioner has further submitted that when the Tribunal refuses to modify its earlier order, appellate order would remain intact. However if the order passed in appeal is recalled and fresh order is passed, in that case, no order in appeal remains and therefore it would be fresh order in appeal, against which the appeal preferred before High Court would be maintainable under Section 260 A of the Act. 5.1. The aforesaid question being pure question of law, we requested Shri M.R. Bhatt, learned counsel for the revenue to assist the Court and at our request Shri Bhatt, learned counsel for the revenue has appeared in the matter and has assisted the Court. According to Shri M.R. Bhatt, learned counsel for the revenue, against the order passed by the learned Tribunal dismissing the rectification application appeal under Section 260 A of the Act before High Court would not be maintainable and the remedy available to the assessee would be to prefer petition under Article 226 / 227of the Constitution of India. 5.2. Now, so far as challenging the impugned order passed by the learned Tribunal rejecting the rectification application is concerned, Shri J.P. Shah, learned counsel for the petitioner – assessee has vehemently submitted that the learned Tribunal has materially erred in rejecting the rectification application by observing that there is no error apparent on the face of record. 5.3. It is submitted by Shri J.P. Shah, learned counsel for the petitioner – assessee that while considering the rectification application, the learned Tribunal has not properly appreciated and / or considered Page 6 of 18 C/SCA/15074/2013 JUDGMENT scope and ambit of its powers under Section 254 (2) of the Act. Shri J.P. Shah, learned counsel for the petitioner – assessee has heavily relied upon the decisions of this Court in the case of Honda Siel Power Products Ltd vs CIT reported in (2007) 295 ITR 466 at 472 as well as in the case of ACIT vs. Saurashtra and Kutch Stock Exchange Ltd reported in (2008)305 ITR 227 (SC) with respect to powers of the Tribunal while deciding the rectification application under Section 254(2) of the Act. 5.4. It is further submitted by Shri J.P. Shah, learned counsel for the petitioner – assessee that when the petitioner pointed out to the Tribunal in the Miscellaneous Application that the apparent error has been committed by the Tribunal in not considering valuer valuation report furnished to and accepted by the Rajkot Nagrik Sahkari Bank Limited, which was not considered earlier by the learned Tribunal, learned Tribunal ought to have allowed the Miscellaneous Application and rectified the mistake. 5.5. It is further submitted by Shri J.P. Shah, learned counsel for the petitioner – assessee that when it was pointed out to the learned Tribunal that the decision of the Hon’ble Supreme Court in the case of CIT vs. Bharat Engineering and Construction Co.­ 83 ITR 187 though relied upon but not considered by the learned Tribunal, the learned Tribunal ought to have allowed the Miscellaneous Application and ought to have rectified its earlier order and ought to have passed fresh order considering the decision of the Hon’ble Supreme Court in the case of Bharat Engineering and Construction Co (supra). 5.6. When we pointed out that as the Tax Appeal No. 653 of 2012 against order passed by the learned Tribunal passed in ITA No. 675 of Page 7 of 18 C/SCA/15074/2013 JUDGMENT 2010 came to be dismissed and the order passed by the learned Tribunal came to be confirmed and therefore, when the order passed by the learned Tribunal came to be merged in the order passed by this Court in Tax Appeal No.653 of 2012, is it open for the assessee to prefer review application and / or challenge the order passed by the learned Tribunal passed in rectification application dismissing the same ? To that Shri Shah, learned counsel for the petitioner has submitted that the Tax Appeal is dismissed by this Court by observing that no substantial question of law arise and therefore, it is always open for the assessee to prefer rectification application pointing out the error apparent and despite the dismissal of the appeal by the High Court against the order passed by the learned Tribunal which is sought to be reviewed, the rectification application would be maintainable and consequently against the order passed by the Tribunal rejecting the rectification application, petition under Article 226/227 of the Constitution of India would be maintainable and it is always open for the assessee to point out that the learned Tribunal has committed error in rejecting the rectification application and in not correcting error apparent. 5.7. Shri Shah, learned counsel for the petitioner has vehemently submitted that the learned Tribunal has materially erred in relying upon and considering the Valuation Report submitted before the Union Bank while confirming the addition of Rs.22,70,370/­ on account of unexplained investment in cost of construction of factory building and Tunnel Kiln. It is submitted that the learned Tribunal ought to have relied upon and considered the valuation report submitted before the Rajkot Nagrik Sahakari Bank Ltd, which had approved finance for the assessee. Making above submissions on merits, it is requested to allow the present Special Civil Application and quashed and set aside the impugned order passed by the learned Tribunal passed in rectification. Page 8 of 18 C/SCA/15074/2013 JUDGMENT 6.0. Heard Shri J.P. Shah, learned counsel for the petitioner and Shri M.R. Bhatt, learned counsel for the revenue who was requested by us to assist the Court on the question of law whether against the order passed by the learned Tribunal under Section 254(2) of the Act in so far as rejecting the rectification application, appeal before the High Court under Section 260 A of the Act would be maintainable or not. 7.0. Now, so far as first question posed for consideration of this Court whether against the impugned order passed by the learned Tribunal rejecting the rectification application under Section 254(2) of the Act, whether appeal before the High Court under Section 260 A of the Act would be maintainable or not, it appears that the aforesaid question is as such now not res­integra. 8.0. Identical question came to be considered by the the Bombay High Court in the case of Chem Amit (supra) and it is held that an order passed by the Tribunal on application for rectification under Section 254(2) of the Act rejecting rectification application cannot be said to be an order passed in appeal by Tribunal within meaning of Section 260A (1) of the Act and therefore, such an order is not amenable to appeal under Section 260 A of the Act. It is also further held by the Bombay High Court that, however, where as a consequence of an order passed in rectification application under Section 254(2) amendment in order passed in appeal under Section 254(1) takes place, such amended order in appeal as a consequence of order passed in rectification application shall be amenable to appeal under Section 260 A of the Act. 9.0. While so holding the Bombay High Court in the case of Chem Amit (supra) in para 4 to 7 has observed as under: \"4.What is provided by sub­section (1) of section 260A is that every Page 9 of 18 C/SCA/15074/2013 JUDGMENT order passed in appeal by the Appellate Tribunal involving a substantial question of law is amenable to an appeal to the High Court. Sub­section (1) of section 254 provides 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. The expression, \"an appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal\" obviously is referable to such order passed under section 254(1). An order passed by the Tribunal on the application for rectification under section 254(2) rejecting rectification application cannot be said to be an order passed in appeal by the Appellate Tribunal within the meaning of section 260A(1). 5.Mr. K. Gopal, learned counsel for the assessee, however, relied upon the judgment of the Supreme Court in the case of CIT v. Durga Engineering and Foundry Works (2000) 245 ITR 272 and submitted that an order passed by the Appellate Tribunal on the application for rectification is an order passed in appeal by the Appellate Tribunal. 6.In Durga Engineering and Foundry Works (2000) 245 ITR 272 (SC), the Supreme Court held that the reference under section 256 of the Income Tax Act, 1961, could be made from the order of the Appellate Tribunal passed on the application for rectification under section 254(2). That was so held by the Supreme Court in the light of the language of section 256 which empowered 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 comprises two sub­sections. Sub­section (1) of section 254 provides that the Appellate Tribunal may pass such order on an appeal as it thinks fit after giving both the parties to the appeal an opportunity of being heard. Sub­section (2) of section 254 permits the Tribunal to rectify any mistake apparent from the record and amend any order passed under subsection (1) within four years from the date of the order. The expression employed in section 260A that provides for an appeal to the High Court is materially different from the expression used in section 256 that empowers the assessee and the revenue to require the Appellate Tribunal to refer to the High Court Page 10 of 18 C/SCA/15074/2013 JUDGMENT any question of law. As already noticed above, in section 256 the expression used is, \"require the Appellate Tribunal to refer to the High Court any question of law arising out of an order passed under section 254\". However, in section 260A, the Legislature has not provided an appeal to the High Court from every order passed under section 254 but has confined it to the order passed in appeal by the Appellate Tribunal. This is made clear by the use of the expression, \"an appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal\". If the Legislature intended to provide an appeal to the High Court from the order passed by the Appellate Tribunal on the application for rectification under section 254(2), the Legislature would not have used the expression in section 260A that an appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal, but instead used the expression as is used in section 256 that an appeal shall lie to the High Court from every order passed under section 254. The expression, \"an appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal\" in section 260A cannot be equated with the expression, \"an appeal shall lie to the High Court from every order passed under section 254\". In Durga Engineering and Foundry Works (2000) 245 ITR 272 (SC), also the Supreme Court observed that \"section 256 contemplates the reference of the question of law arising out of an order passed under section 254 ; that is to say, an order passed both under section 254(4) and section 254(2)\". We have already highlighted the departure of the language in section 260A from the language occurring in section 256. 7.In a given case where as the consequence of an order passed on the rectification application under section 254(2), the amendment in the order passed in appeal under section 254(1) takes place, such amended order in appeal as a consequence of the order passed in the rectification application, however, shall be amenable to appeal under section 260A. In so far as the present case is concerned, the assessee has only challenged the order of the Appellate Tribunal rejecting the application of rectification, the appeal under section 260A is not maintainable.\" 10. The Rajasthan High Court in the case of Madhav Marbles & Page 11 of 18 C/SCA/15074/2013 JUDGMENT Grainites (supra) has held that writ petition under Article 226 of the Constitution of India is maintainable against the order of Tribunal passed under Section 254(2) of the Act. The Rajasthan High Court in the said decision rejected the contention on behalf of the revenue that appeal would lie before the High Court under Section 260 A of the Act against the order passed under Section 254(1) of the Act, by which the Miscellaneous Application for rectification has been rejected by Tribunal. The Rajasthan High Court while rejecting the said contention observed that said order does not decide rights of the parties finally at the hands of the Tribunal and it is only for substantial questions of law arising out of any order of the Tribunal under Section 254(1) that an appeal on substantial question of law, could be filed before the Division Bench of the High Court. In the said decision, the Rajasthan High Court relied upon the decision of the Bombay High Court in the case of Chem Amit (supra). 11. A similar view has been expressed by the Madras High Court in the case of Visvas Promoters (P) Ltd (supra), it is held by the Madras High Court in the said decision that when an application for rectification is made and order is passed under Section 254(2) of the Act by merely rejecting such an application, it does not decide substantial issue between parties, since issue has already been decided under Section 254(1) of Act by the Tribunal and therefore, order passed under Section 254(2) of the Act is not appealable under Section 260 A of the Act. 12. A similar view has been expressed by the Calcutta High Court in Shaw Wallace & Co Ltd Vs. ITAT reported in (1999) 240 ITR 579 wherein it is held as follows. Page 12 of 18 C/SCA/15074/2013 JUDGMENT \".Regarding the point of s.260A, in my opinion, an appeal would not be permissible from any and every order passed by the Tribunal under this section. If, say, an order of adjournment is passed, the assessee could not come in appeal to the High Court under s.260A. There are many instances of provisions allowing appeals where words such as every order, any order, all orders, etc. have been interpreted to mean and include only those orders which are substantially final in some sense or the other, and which finally dispose of or affect the parties rights in regard to some important point in controversy. In my opinion, the words every order in s.260A means exactly this. Also to be appealable, the order of the Tribunal has to be passed in appeal. Here, the impugned order of the Tribunal was not passed in appeal, but in a miscellaneous application directed towards rectifying mistake apparent from the record. If the order under s.254(2) had taken the shape of modifying by way of amenmdent or rectification, the original order to some extent, then both of those jointly might have been appealable under s.260A; but an order of recall is clearly not appealable. Alternatively even if appealable, then impugned order being also without jurisdiction the writ application should be entertained in this case, an as exception, in the interest of expedition of the assessment proceedings.\" 13. We are in complete agreement with view taken by the Bombay High Court in the case of Chem Amit (supra) and by the Madras High Court in the case of Visvas Promoters (P) Ltd (supra) and it is held that against the order passed by the Tribunal under Section 254 (2) of the Act rejecting the Miscellaneous Application / rectification application, appeal under Section 260 A of the Act before this Court would not be maintainable and the aggrieved party may prefer Special Civil Application under Article 226 of the Constitution of India. Such petition under Article 226 of the Constitution of India thus would lie against the order of Tribunal rejecting the application under Section 254(2) of the Act. 14. Now, so far as the submission made by Shri Shah, learned counsel for the petitioner ­assessee on merits against the impugned Page 13 of 18 C/SCA/15074/2013 JUDGMENT order passed by the learned Tribunal rejecting the Miscellaneous Application is concerned, for the reasons stated herein below we are of the opinion that Special Civil Application under Article 226 of the Constitution of India is not required to be entertained. 15. It is required to be noted that against the judgment and order passed by the learned Tribunal passed in ITA No. 675 of 2010 confirming the additions of Rs. 24,46,550/­ and Rs.8,64,485/­, the assessee preferred Tax Appeal No. 653 of 2012 before this Court on 15.9.2012 and this Court dismissed the appeal on merits dealing with all the submissions, which were made on behalf of the assessee and by detailed speaking order dated 12.4.2013 dismissed the said appeal confirming the order passed by the learned Tribunal which was sought to be reviewed in rectification application. As stated above, at the time when this Court considered the tax appeal on merits, it was never pointed by the assessee that they have already preferred rectification application before the Tribunal. On the contrary, submissions were made on merits, which came to be dealt with and considered by this Court and thereafter the Division Bench dismissed the appeal on merits confirming the order passed by the learned Tribunal which was sought to be rectified by submitting the Miscellaneous Application / Rectification Application. Once the appeal under Section 260 A of the Act against the order passed by the learned Tribunal is dismissed, there cannot be any rectification application to rectify the order passed by the Tribunal passed in appeal, as on dismissing the appeal by the High Court, the order passed by the Tribunal would be merged with that of the High Court and consequently there will not be any order passed by the Tribunal which can be rectified by the Tribunal. Identical question came to be considered by the Division Bench of this Court in the case of Nirma Industries Ltd vs. Deputy Commissioner of Income Tax reported in Page 14 of 18 C/SCA/15074/2013 JUDGMENT (2006) 283 ITR 402 (Guj) and in the said decision it is held that in case where High Court dismissed the appeal holding that no substantial question of law arise, it will not be open for the Tribunal to thereafter to consider the rectification under Section 254(2) of the Act. In the said decision, it is held that the effect of dismissal of tax appeal by the High Court holding that no substantial question of law arises is that the order of the Tribunal on the issue which was agitated by the appellant before the High Court stands merged in the order of the High Court and for all intents and purposes it is the decision of the High Court which is operative and which is capable of being given effect to. It is not open to any person to contend that there is no decision of the High Court and the subordinate forum is entitled to take a contrary view then the one adopted in the earlier proceedings which have been affirmed by the High Court by a process of dismissal of the appeal simpliciter. In paras 22 to 25, the decision Bench has observed and held as under: “22.In a case where the appeal is dismissed on account of – (I) being barred by limitation, (ii) being defective in nature, (iii) the appellant having no locus standi to prefer appeal, it cannot be stated that there is merger of the order of the subordinate forum in the order of the superior forum. The reason is : there is no ‘order’ made by the superior forum, i.e. on merits, the controversy between the parties has not been gone into by the appellate forum. But, in a case where the High Court comes to the conclusion no substantial question of law arises on a particular issue, it cannot be stated that when the appeal is dismissed by the High Court, the subject matter of the controversy between the parties has not been dealt with by the High Court. The decision of the Tribunal is affirmed on the issue brought before the High Court. 23.As laid down by the Apex Court the appellate jurisdiction is conferred on the Supreme Court by Articles 132, 133 and 134 of the Constitution, while under Article 136 of the Constitution a special jurisdiction is conferred on the Supreme Court which is sweeping in its nature. It carries with it a residuary power. Under the said Article no right of appeal is conferred on any party; only a discretion is vested in the Supreme Court to interfere by granting leave to an applicant to enter the appellate jurisdiction which is otherwise not open and not available as a right. The Page 15 of 18 C/SCA/15074/2013 JUDGMENT legal position in this regard has been stated by the Apex Court in the case of Kunhayammed And others (supra) wherein the Supreme Court makes it clear that granting of leave and filing of appeal are two distinct stages and where a leave to appeal is dismissed, the Apex Court does not permit invoking the appellate jurisdiction of the Supreme Court. 24.In light of what is stated hereinbefore, and more particularly on application of the doctrine of merger, the submission that unless a substantial question of law is formulated there can be no decision of the High Court under Section 260A of the Act is an incorrect proposition. In the case of Commissioner of Income­tax Vs. Cadila Chemicals Pvt. Ltd., [1998] 230 ITR 885 (Guj.) this Court has laid down: “..... When a decision on a question of law is rendered by the High Court, it will remain a binding precedent, on the doctrine of “stare decisis” and when an identical question of law is involved in a subsequent matter the Tribunal would be bound to follow the decision of its jurisdictional High Court and it cannot be said that a question of law arises for the opinion of the High Court from such order of the Tribunal, which has followed the High Court decision on the question which is already settled so far as it is concerned, and would be a binding precedent until reconsidered and departed from by a larger Bench of the same court or overruled by the Supreme Court.” 25.In an order of affirmation, repetition of reasons may not be elaborate, but once the order shows that the points urged have been dealt with and reasons for affirmation/approval stated, the matter ends. It is a decision of the superior Court viz. the High Court and the Tribunal cannot ignore it. Where by a process of incorporation, the High Court refers to and relies upon its own order made earlier in point of time in case of the same assessee, or even some other assessee, by necessary implication the reasons stated in the earlier order become reasons for the subsequent order, and it is not open to anyone to contend that the High Court has dismissed the appeal only on facts without rendering any decision. The decision of the High Court could be both on facts and law, or on any one, where the High Court does not find any reason to interfere with the decision of the Tribunal.” 16. Now, applying the aforesaid proposition of law laid down, the facts of the present case are required to be considered. It is required to be noted that before this Court Tax Appeal under Section 260 A of the Act, against the judgment and order passed by the learned Tribunal Page 16 of 18 C/SCA/15074/2013 JUDGMENT passed in ITA No. 675 of 2010, same grounds were submitted which are mentioned in the rectification application, more particularly, valuation accepted by the Assessing Officer while making addition of Rs.22,70,370/­. Dealing with the same in extenso, the Division Bench of this Court has dismissed the appeal and confirmed the order passed by the Tribunal confirming the addition of Rs. 24,46,550/­ and Rs.8,64,485/­. As stated above, at the time of hearing of the Tax Appeal, the assessee did not point out before this Court that they have already preferred rectification application before the Tribunal which is pending nor even at the time of deciding the rectification application (subsequently) by the Tribunal it was pointed out before the Tribunal that against the judgment and order passed by the learned Tribunal which is sought to be rectified, they preferred appeal, which has been dismissed by the Division Bench on merits. Shri Shah, learned counsel for the petitioner is not in a position to dispute the above. Under the circumstances, now it is not open for the petitioner to contend that despite the dismissal of appeal by this Court, rectification application would be maintainable, on issues / grounds, which came to be earlier considered by the Division Bench while deciding the Tax Appeal No.653 of 2012 under the guise of the rectification, the petitioner­ assessee cannot have the second round of litigation on the same ground / issue which earlier came to be considered by the Division Bench of this Court and Division Bench dismissed the appeal on merits confirming the judgment and order passed by the learned Tribunal passed in ITA No. 675 of 2010. 17. In view of the above, present petition under Article 226 of the Constitution of India is not required to be entertained, more particularly, when on the ground / issue which is sought to be canvassed, more particularly, valuation adopted by the Assessing Officer Page 17 of 18 C/SCA/15074/2013 JUDGMENT while making addition of Rs.22,70,370/­, the appeal at the instance of the very petitioner – assessee against the order passed by the learned Tribunal passed in ITA No. 675 of 2010 has been dismissed on merits, this Court is not required to exercise appellate jurisdiction over the order passed by the Division Bench of this Court passed in Tax Appeal No. 653 of 2012. Under the circumstances, present petition deserves to be dismissed. 18. In view of the above and for the reasons stated above, petition fails and same deserve to be dismissed and is accordingly dismissed. sd/­ (M.R.SHAH, J.) sd/­ (MS SONIA GOKANI, J.) Kaushik Page 18 of 18 "