CIT Vs. SATPAL PANDIT & CO.

JUDGEMENT

(1.) THE instant appeal has been filed by the Revenue under section 260A of the Income -tax Act, 1961 (in short "the Act"), against the order dated February 26,1999, passed by the Income -tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as "the Tribunal") in I.T.A. No. 515(ASR)/1985 for the assessment year 1981 -82, proposing the following substantial question of law :

(2.) BRIEFLY the facts necessary for deciding the present appeal are that the assessee following the calendar year as its previous year filed return declar'ing a total income of Rs. 1,35,550 for the assessment year 1981 -82 on June 30, 1981. The assessment was completed on September 24, 1984, and a total income of Rs. 3,32,035 was assessed by the Assessing Officer. Against the' said assessment,' the' assessee' approached the' Commissioner of Income -tax (Appeals) (in short "the CIT(A)") by way of appeal and the Commissioner of Income -tax (Appeals), vide order dated May 17, 1985, while allowing the appeal annulled the assessment order being barred by limitation. Against the order of the Commissioner of Income -tax (Appeals), the Revenue filed an appeal and the Tribunal, vide order dated November 8, 1994, upheld the order of the Commissioner of Income -tax (Appeals). Against the order of the Tribunal, the Revenue filed reference application for drawing the statement of the case and referring the question of law to this court, the Tribunal, vide order dated October 17, 1995, referred the question of law to this court. This court, vide order dated September 29, 1997, passed in I. T. R. No. 142 of 1996 decided the question of law in favour of the Revenue and against the assessee. In pursuance of the judg'ment of this court, the Tribunal allowed the appeal of the Revenue, vide order dated December 23, 1997. Thereafter, on the assessees application, the Tribunal, vide order dated February 26, 1999, recalled its order holding that the remaining grounds and issues were to be decided. Hence, the present appeal by the Revenue.

(3.) IT is undisputed that the assessee had filed an appeal against the assess'ment order dated June 30, 1981, before the Commissioner of Income -tax (Appeals) raising challenge to the additions made by the Assessing Officer. It was during the course of hearing of appeal that the assessee moved an application dated May 20, 1985, challenging the validity of the assessment order for the assessment year in question on the ground of limitation. The Commissioner of Income -tax (Appeals) had accepted the aforesaid plea of the assessee and had annulled the assessment. However, the Commis'sioner of Income -tax (Appeals) had not adjudicated the controversy on the merits. The Revenue had challenged the order of the Commissioner of Income -tax (Appeals) and ultimately as noticed earlier, this court in I.T.R. No. 142 of 1996 (CIT v. Sat pal Pandit and Co., Chahar Bagh, Jalandhar) decided on September 29,1997, had adjudicated the legal issue in favour of the Revenue whereupon the Tribunal passed order allowing the appeal of the Revenue under section 260 of the Act. Since the Tribunal had decided the appeal on legal ground of limitation in consonance with the order of this court, the order that was required to be passed was to remand the case to the Commissioner of Income -tax (Appeals) to decide the appeal of the assessee on the merits which had remained untouched while passing the order dated June 17, 1985, by the Commissioner of Income -tax (Appeals). The assessee noticed the aforesaid mistake apparent on the record of the Tribunal in its order dated December 23, 1997, and filed an application under section 254(2) of the Act for rectification which was rectified, vide order dated February 26, 1999, by recalling the order dated December 23, 1997, and fixing the case for deciding the other issues in the appeal.