1989-VIL-545-DEL-DT

Equivalent Citation: [1989] 180 ITR 280, 80 CTR 226, 48 TAXMANN 297

DELHI HIGH COURT

Date: 21.07.1989

COMMISSIONER OF INCOME-TAX, DELHI, CENTRAL I.

Vs

ESCORTS FARMS PVT. LIMITED

BENCH

Judge(s)  : C. L. CHAUDHARY., B. N. KIRPAL 

JUDGMENT

The judgment of the court was delivered by

KIRPAL J.-This petition has been filed under section 256(2) of the Income-tax Act seeking reference of the following question of law to this court :

"Whether the Income-tax Appellate Tribunal was correct in law and on facts in holding that the order passed in appeal by the Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal in ITA No. 1325/Delhi/83 will lose effect and would become infructuous in view of the Income-tax Appellate Tribunal's order in M.A. No. 4 /Delhi /85, dated February 17, 1985, especially when the latter order has not been accepted by the Department and reference application has been filed against the order?"

Briefly stated, the facts are that in respect of the assessment year 1973-74, the Income-tax Officer made an assessment. An appeal was taken to the Commissioner of Income-tax, who allowed the same. Further appeal was filed by the Department to the Tribunal and the same was decided in favour of the Department.

The assessee, thereafter, moved an application under section 254(2) of the Income-tax Act in which it was contended that at the time of the hearing of the main appeal, the assessee's counsel had submitted that the assessment order itself was barred by time. The submission was that this contention had not been dealt with by the Tribunal. The Tribunal then passed an order under section 254(2) rectifying its earlier order. The Tribunal came to the conclusion that such a contention had been raised by the assessee and it decided that contention in favour of the assessee. The decision of the Tribunal, therefore, was that the assessment was barred by time, but, at the same time, on merits, the Tribunal had decided in favour of the Department.

Against the aforesaid order passed under section 254(2) of the Act, the Department filed a reference application under section 256(1), but the said application was dismissed.

The assessee then moved a second miscellaneous application being No. 14 of 1986 in which it prayed that the Tribunal should recall its order passed in the main appeal being ITA No. 1325 of 1983. The Tribunal observed, vide its order dated February 12, 1986, while disposing of the second miscellaneous application, that the effect of its order passed in M. A. No. 4 of 1985, was that all subsequent proceedings by way of appeal before the Commissioner of Income-tax and the Appellate Tribunal would lose effect and would become infructuous. Against the said decision, the Department filed an application under section 256(1)which was dismissed and now an application under section 256(2) has been filed seeking reference of the question of law which has been reproduced above.

In our opinion, the decision of the Tribunal is correct when it stated that the effect of holding that the assessment was barred by time is that all further proceedings pursuant to the said decision would be infructuous. The Income-tax Officer gets jurisdiction to pass an assessment order if it is within limitation. If the assessment is barred by time, then any decision on merits would be of no consequence, and for the same reason, the decision, on merits, by the appellate authorities would also be of no consequence and would have to be ignored. This is exactly what the Tribunal has observed in the impugned order. For, if the assessment is barred by time, no effect can be given to the other decision on merits. If, however, the reference of the Department against the order passed in M. A. No. 4 of 1985 succeeds, then the decision on merits of the various appellate authorities would automatically remain.

In our opinion, there is no question of law as such arising in this order. Dismissed.

We may also note that Mr. Bishamber Lal, counsel for the respondent, contended that in view of the decision in C WT v. Ilia Dalmia [1987] 168 ITR 306 (Delhi) and CIT v. Mtt. Ay. S. Ay. Arunachalam Chettiar [1953] 23 ITR 180 (SC), no reference is maintainable. For the view which we have already taken, it is not necessary for us to decide this question.

Petition dismissed.

 

 

 

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