PRAKASH CHAND NAHTA Vs. UNION OF INDIA

JUDGEMENT

(1.) The following questions were before the High Court in a reference under Section 256 (1) of the Income Tax Act, 1961:

(2.) The High Court answered the questions against the assessee. It is clear from the judgment of the High Court that it proceeded upon the basis that the questions that were before it arose upon an order passed by the Tribunal in a rectification application. This is evidenced by, for example, the following statements in the judgment. "but that is a matter not of rectification. . . This is not a matter in which an apparent error is involved, but is a matter more of merit and cannot be rectified within the scope of rectification. . In the present case, therefore, whether the Tribunal should have acted upon the subsequent affidavit filed by Mohd. Rashid in favour of the assessee is not within the zone of apparent error on record but is a matter more of merits of the case and, therefore, beyond the scope of rectification. " Reference has also been made specifically to Section 254 and the decisions which are referred to by the High Court are all decisions that relate to rectification proceedings.

(3.) We have looked at the reference application under Section 256 (1) that was made by the assessee and it is clear therefrom that what was sought to be referred were questions that arose out of the principal order of the Tribunal that have been passed on 11th January, 1988. The High Court, therefore misdirected itself and its order must be set aside.