NANDLAL VITHALDAS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE extraordinary powers of this court under articles 226 and 227 of the Constitution of India are sought to be invoked for quashing the orders passed by the Income -tax Appellate Tribunal, Nagpur on December 22, 1978, May 19, 1979, and March 10, 1980 (annexures 7, 8 and 9), for a writ of mandamus against the respondent directing him to allow the claim of bad debt amounting to Rs. 83,937 for the assessment year 1975 -76.

(2.) THE facts giving rise to this litigation may be briefly stated as follows. The petitioner is a partnership firm having its place of business at Shegaon in Khamgaon Tahsil of Buldana District. This firm is an income -tax assessee. It is dealing in cotton business at Shegaon. In the course of their usual business, the firm sold 91 bales of cotton to Shri Krishnakumar Mills, Mahua, in Gujarat State in the accounting year 1969 -70. The total price was Rs. 83,937 inclusive of sales tax, insurance, etc. In the ordinary course of business, this amount was shown in the account books of the firm, Shri Krishnakumar Mills was wound up by the Gujarat High Court with the result that the petitioner could not get even a single pie by way of repayment of this amount. The petitioner, therefore, showed this amount as a bad debt in the accounting year 1972 -73. However, the Income -tax Officer disallowed the said claim on the ground that the debt had not become bad during the accounting year and, as such, it was prematurely, written off. This decision of the Income -tax Officer was challenged before the Appellate Assistant Commissioner of income -tax. The learned appellate court held that this writing off of the claim was premature. The appellate court, therefore, directed the Income -tax Officer to reconsider this claim in the subsequent assessment year and decide it afresh.

(3.) THE petitioner then applied for a reference under section 256(1) of the Income -tax Act. This application came to be rejected by the Tribunal by its order and dated May 19, 1979, on the ground that no question of law was involved, and as such, there was no necessity for making any reference. The petitioner then applied for rectification of a mistake apparent on the face of the record in the order passed on December 22, 1978. This application also came to be rejected by an order dated March 10, 1980, holding that there was no mistake in the order of the Tribunal and that the Tribunal had no authority to rectify the mistake, it is these three orders which have been challenged in this petition.