COMMISSIONER OF INCOME TAX Vs. T K JAIRAJ

JUDGEMENT

(1.) ALL the three cases arise from the orders of the Income-tax Appellate Tribunal relating to the income-tax assessment of Dr. T. K. Jayaraj, a medical practitioner in Calicut, hereinafter referred to as the "assessee", for the assessment year 1984-85. The assessment was completed by the Income-tax Officer, Central Circle, Kozhikode, and, therefore, the Commissioner competent to file reference application before the Tribunal was the Commissioner of Income-tax, Central Circle, having jurisdiction over the Assessing Officer, who passed the order. The appeal by the assessee was allowed by the Income-tax Appellate Tribunal, Cochin Bench, and a copy of the order was sent to the Commissioner of Income-tax, Central Circle, Bangalore, who was the person on record of the Tribunal, having jurisdiction in the matter. However, on receipt of the order from the Tribunal, the Commissioner of Income-tax, Central Circle, Bangalore, sent the appellate order to the Commissioner of Income-tax, Central Circle, Madras, to whom the jurisdiction was transferred. It appears that there was some delay in the office of the Commissioner of Income-tax at Madras, where the appellate order was stated to be misplaced. However, the Commissioner of Income-tax at Madras also had ceased to have jurisdiction and therefore he forwarded the order to the Commissioner of Income-tax, Cochin, who had jurisdiction in the matter. The Commissioner of Income-tax, Cochin, thereafter filed the reference application before the Income-tax Appellate Tribunal, Cochin Bench, accompanied by a delay condonation petition for condoning the delay of 136 days. It may be noticed that the limitation for filing the reference application was calculated reckoning the date of receipt of the appellate order of the Tribunal by the Commissioner of Income-tax, Madras, on January 17, 1994, who had ceased to have jurisdiction in the matter. Under the proviso to Section 256{1) of the Income-tax Act, the Income-tax Appellate Tribunal does not have the power to condone delay of more than 30 days in filing the reference application. Therefore, the reference application filed by the Commissioner of Income-tax, Cochin, was rejected by the Tribunal by order dated May 22, 1995. Thereafter the Department changed its stand and the Commissioner of Income-tax, Cochin, filed a miscellaneous petition, M. P. No. 7 of 1996, praying for restoration of the reference application dismissed by the Tribunal on the ground that the date of receipt of the appellate order of the Tribunal should be taken as June 13, 1994, that is the date on which the Commissioner of Income-tax, Cochin, who had jurisdiction in the matter received the appellate order. The reference application was in fact filed by him on August 1, 1994, and if the date of receipt of the appellate order is to be reckoned as June 13, 1994, the date on which the Commissioner of Income-tax, Cochin, received the order, then the reference application was well within the statutory period. The Tribunal, vide order dated June 28, 19%, restored the reference application and thereafter disposed of the same by referring the questions of law in I.T.R. No. 61 of 1997. The assessee challenged the restoration order by filing O. P. No. 20583 of 1996. Thereafter the assessee also filed reference application to refer questions of law arising from the restoration order passed in the miscellaneous petition. The Tribunal disposed of the reference application by referring the questions of law raised by the assesses relating to the jurisdiction of the Tribunal to restore the reference application initially dismissed by order dated May 22, 1995. This reference case is numbered as I. T. R. No. 275 of 1999. The assessee's two cases are against the maintainability of the reference case, I. T. R. No. 61 of 1997, referred by the Tribunal at the instance of the Commissioner of Income-tax, Cochin. As common issues are involved we have taken up all the cases together and have heard Sri C. K. Nair, counsel for the assessee, and Sri P. K. R. Menon, senior standing counsel for the Income-tax Department.

(2.) THE assessee's counsel contended that the Department having accepted the date of receipt of the appellate order at an earlier date, and having filed the reference application with delay condonation petition, cannot, after the same was dismissed by the Tribunal, maintain a different stand on the ground that the appellate order should be taken to have been received only on the date on which it was received by the Commissioner of Income-tax, Cochin. In any case, counsel contended that once the Tribunal had dismissed the reference application as time barred, it had no jurisdiction to restore the same by rectification of the dismissal order dated May 22, 1995, either under Section 254(2) of the Act, or under its inherent power. On the other hand, the Department's counsel contended that it was a mistake for the Commissioner of Income-tax, Cochin, to have conceded that the date of receipt of the appellate order as the date on which the order was received by the Commissioner of Income-tax at Madras who had no jurisdiction in the matter. According to him, the date on which the order is received by the Commissioner having jurisdiction in the matter, is the date of actual service and with reference to that date, the reference application filed was within time. It is his contention that the party should not be made to suffer on account of a mistake committed by the Tribunal in so far as it has treated the reference application filed within time as one filed beyond time, even though the Commissioner of Income-tax, Cochin, has by mistake admitted the delay and filed a delay condonation petition.

(3.) THEREFORE, we are of the view that the Tribunal has inherent power to correct its mistake and having dismissed the reference application by mistake as one filed beyond time, it has the power to restore the same on an application by the aggrieved party. We hold that the Tribunal rightly restored the reference application vide its order dated June 28, 1996, and decided the same on the merits. THEREFORE, we dismiss the original petition filed by the assessee challenging the order of the Tribunal restoring the reference application. In view of our decision in the original petition, we answer the questions on the same issue referred in I. T. R. No. 275 of 1999 at the instance of the assessee, in favour of the Department and against the assessee.