INCOME TAX OFFICER Vs. GARGIDIN JWALA PRASAD

JUDGEMENT

(1.) BY means of this writ petition, the ITO, Sita-pur and the Commissioner of Income-tax, Lucknow-I, Lucknow, pray for the issue of a writ, order or direction in the nature of certiorari for quashing an order dated 30th September, 1974, passed by the Delhi Bench (B) of the Income-tax Appellate Tribunal, Delhi, in a miscellaneous application filed by opposite party No. 1 under Section 35 of the Indian I.T. Act, 1922. The petitioners have further prayed for such other and further orders as this court may, in the circumstances of the case, deem just and proper.

(2.) THE material facts leading up to this petition are that opposite party No. 1, M/s. Gargidin Jwala Prasad, a registered partnership firm, hereinafter referred to as the assessee, for the assessment year 1948-49 filed a return showing a loss of Rs. 17,131. Petitioner No. 1 completed the assessment on a net loss of Rs. 8,382. As a result of the Voluntary Capital Disclosure Scheme launched by the Government of India, the assessee disclosed suppressed income to the tune of Rs. 45,000. After some negotiations with petitioner No. 1, the assessee increased the disclosure to Rs. 50,000. Petitioner No. 1 not being satisfied with the disclosure made by the assessee made enquiries and then informed the assessee that the concealed income was much more. THE assessee disagreed. After investigating into the matter, the ITO ultimately made the assessment by holding that the concealed income for the year was Rs. 85,937. THE assessee appealed. THE AAC held that the information possessed by the ITO against the assessee had not been disclosed to it and no opportunity had been provided to it to rebut the same. In the view taken by him, the AAC remanded the matter to the ITO for a further report. After having entered into a series of correspondence with the assessee, the ITO submitted a report consequent on the order of remand. THE AAC ultimately dismissed the appeal of the assessee. THE assessee appealed to the Tribunal at Allahabad, but failed. Ultimately, at the instance of the assessee, a Bench of this court directed the Tribunal to draw up a statement of the case and refer to it the questions of law for the opinion of this court. In consequence of the order of this court, the Tribunal submitted the following questions of law for the opinion of this court:

(3.) AFTER the dismissal of Civil Misc. Writ No. 517 of 1974, by this court on the 21st January, 1974, the assessee on the 25th February, 1974, filed an application under Section 35 of the Act for the rectification of an alleged mistake apparent on the face of the record in the order dated 12th December, 1973, before the Tribunal's Bench at Allahabad. On the 26th February, 1974, the assessee made an application before the President, Income-tax Appellate Tribunal, Bombay, for the transfer of all the proceedings for rectification of the order of the Allahabad Bench of the Income-tax Appellate Tribunal on the ground that it would not get justice from the Tribunal at Allahabad of which Sri T. D. Sugla happened to be a member. The prayer was that the assessee's application under Section 35 of the Act may be decided by the Income-tax Appellate Tribunal at Delhi. The President of the Tribunal passed an order under r. 4 of the Income-tax (Appellate Tribunal) Rules, 1963, directing transfer of the assessee's application for disposal to the Delhi Benches of the Tribunal. The assessee's application under Section 35 of the Act was heard by a Delhi Bench of the Tribunal consisting of Sarvashri G. Krishnamurthy and B.L. Maurya and was allowed by an order dated 30th September, 1974. The Delhi Bench of the Tribunal seems to have taken the view that the earlier order of the Bench of the Tribunal at Allahabad under Section 66(5) of the Act was not in conformity with the opinion of this court and passed an order, the relevant part of which is in the following terms: