J K SYNTHETICS LIMITED Vs. APPELLATE ASSISTANT COMMISSIONER

JUDGEMENT

(1.) AGGRIEVED against an assessment order passed under Section 143 of the Income-tax Act for the assessment year 1968-69 on 27th March, 1972, the petitioner-company filed an appeal on 28th April, 1972. The memorandum of appeal was not accompanied by the notice of demand and on this ground the office of the Appellate Assistant Commissioner returned the memorandum of appeal to the petitioner. Subsequently, the petitioner-company applied for a certified copy of the notice of demand. The same was given to it on 18th October, 1972. The company filed the memorandum of appeal again on 19th October, 1972, attaching with it the certified copy of the notice of demand. The Appellate Assistant Commissioner on 11th May, 1973, passed an order condoning the delay and admitting the appeal. It appears that Sri R. R. Jha, the Appellate Assistant Commissioner, who passed the order dated 11th May, 1973, was transferred and was succeeded by the Appellate Assistant Commissioner, Sri C. D. Basu. Sri C. D. Basu on 24th July, 1973, passed an order (annexure "II") indicating that he was unable to act upon the order of his predecessor dated llth May, 1973, condoning the delay, because the order was based on complete misunderstanding of the correct facts and to that extent it was apparently erroneous and was not liable to be acted upon. After hearing the assessee the Commissioner passed a detailed order on 8th August, 1973, purporting to be under Section 154 of the Income-tax Act, 1961. By this order he set aside the earlier order dated 11th May, 1973. Thereafter he took up the appeal for hearing and vide order dated 5th September, 1973, dismissed the appeal as barred by time. He held that the delay in filing the memorandum of appeal was inordinate and there was no sufficient cause to condone the delay.

(2.) THE present petition challenges the two orders, namely, the rectification order and the order dismissing the appeal. It appears that after the institution of the writ petition the petitioner filed an appeal before the Tribunal against the order dated 5th September, 1973,

(3.) ON behalf of the department it was urged that the statutory Tribunals have inherent power. In this connection reliance was placed upon Income-tax Officer v. M. K. Mohammed Kunhi, [1969] 71 ITR 815 (SC). In this case it was held that the income-tax authorities have an inherent power to pass an interim order of stay. This case has nothing to do with a situation where the Act confers a power of rectification and confines it to certain kinds of orders only. In Shri Bhagwan Radha Kishen v. Commissioner of Income-tax, 1952 22 ITR 101 it was held that the Tribunal has inherent jurisdiction to set aside an order of dismissal for default or an order passed on an appeal heard ex parte when it is satisfied that there was in fact no service of notice, or that there was sufficient cause which prevented the appellant or the respondent from appearing on the date fixed. This case is inapplicable on facts because no such situation has arisen here. The Income-tax Act authorises the disposal of an appeal by the Tribunal after hearing the parties. If for any reason the parties had not been heard, the statutory rule had been violated. The principle laid down in this case will not apply to a situation where the power of rectification is conferred by one statute and is expressly confined to certain types of orders only. Under the guise of inherent power the authorities concerned could not catch within the purview of the power of rectification, an order expressly kept out of it. The decision of this court in Shri Bhagwan Radha Kishen was followed by the Punjab High Court in Mangat Ram Kuthiala v. Commissioner of Income-tax, 1960 38 ITR 1 and for the reasons mentioned above this decision is equally distinguishable.