DEPUTY COMMISSIONER OF WEALTH TAX Vs. SANJAY SINGH SANDHU
INCOME TAX APPELLATE TRIBUNAL
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R.M. Mehta, Accountant Member -
(1.) BY means of these applications preferred under Section 35 of the Wealth-tax Act, 1957 (inadvertently mentioned as under Section 254(2) of the Income-tax Act), the applicant has sought to point out an error apparent from the record in the orders passed by the Tribunal in respect of the present two assessees contending in the process that the orders of the Tribunal were based on the decision of the Hon'ble Delhi High Court in the case of Sharbati Devi Jhalani v. CWT  159 ITR 549 which decision subsequently came to be over-ruled by the Hon'ble Supreme Court in the case of Bharat Hari Singhania v. CWT  207 ITR 1. It is submitted in the applications that an order which was a good order at the time when it was passed may subsequently reveal a mistake apparent from the record in the light of a subsequent Supreme Court decision and the authorities which passed the earlier order were duty-bound to rectify the same so as to eliminate the said error. It is further submitted that the law laid down by the Hon'ble Supreme Court was not a declaration of law from the date of the judgment of the Supreme Court, but the law as it ought to have been all along from the date on which a particular provision was brought on the statute book.
(2.) We have heard both the parties in respect of the applications filed by the revenue. The learned Departmental Representative reiterated the submissions made in the applications contending in the process that there was sufficient authority for the proposition that the Tribunal was duty-bound to rectify its earlier decision vis-a-vis a judgment delivered subsequent to its order by the Supreme Court taking a view to the contrary. According to him, the decision of the Supreme Court was retrospective in operation and declared the law as it ought to have been and was all along. It was thereafter reiterated that since the present appeals had been decided by the Tribunal following a decision of the Hon'ble Delhi High Court (supra) and the said decision having been over-ruled by the Hon'ble Supreme Court subsequently, the Tribunal be pleased to rectify its earlier orders and decide the matters in the light of the Supreme Court decision in the case of Bharat Hari Singhania (supra). In support of the submissions made the learned Departmental Representative placed reliance on the following decisions:-
(i) Kil Kotagiri Tea and Coffee Estates Co. Ltd. v. ITAT  174 ITR 579 (Ker.);
(ii) Controller of Estate Duty v. V.G. Badamia  186 ITR 170 (Bom.);
(iii) Neeta S. Shah v. CIT  191 ITR 77 (Kar.) ;
(iv) Devendra Prakash v. ITO  72 ITR 151 (All.);
(v) S.A.L. Narayana Row v. Model Mills Nagpur Ltd.  64 ITR 67 (SC); and
(vi) ITO v. Shashi Raj Kapoor  21 ITD 406 (Bom.).
The learned counsel for the assessees, on the other hand, opposed the applications filed by the revenue raising an initial argument to the effect that since the orders of the Tribunal had been accepted and no reference applications had been filed the Department was precluded from seeking a reversal of the order of the Tribunal through the process of rectification. The further submissions on the part of the learned counsel, however, were in the direction of contending that there was no mistake apparent from the record in the orders passed by the Tribunal and it had rightly decided the matter by following the decision of the jurisdictional High Court and the judgment of the Hon'ble Supreme Court having come much later. It was also canvassed that finality in the orders passed by an appellate authority, viz., the Tribunal had to be maintained and these could not be disturbed except by a process authorised by law and which, according to him, in the present case meant the filing of reference applications either under Section 27(1) and on rejection under Section 27(3) both of the Wealth-tax Act, 1957. In support of his arguments he placed reliance on the following decisions :-
(i) Seshasayee Paper and Boards Ltd. v. IAC  157 ITR 342 (Mad.);
(ii) RK. Sawhney, Executor of the Estate of Late R.B. Nathu Ram v. CIT  166 ITR 128 (Delhi);
(iii) CIT v. Tribune Trust [19481 16 ITR 214 (PC); and
(iv) Deputy Commissioner of Commercial Taxes v. Khanna Auto Corporation [19691 24 STC 153 (Mad.).
(3.) WE have examined the rival submissions and have also perused minutely the various decisions cited by the parties in support of their respective view-point. At the outset, we would refer to the arguments advanced by the learned counsel for the assessees to the effect that the finality of an order could not be disturbed with reference to the facts prevailing in the present appeals where, according to the learned counsel, no reference applications have been filed by the Department against the orders of the Tribunal. The decision of the Hon'ble Madras High Court in the case of Seshasayee Paper & Boards Ltd. (supra) has been cited, but which decision, according to us, supports the stand of the Revenue since their Lordships have held that finality can be disturbed "by a process known to law or by a process authorised by law". In the present case the Department has made a request for a modification to be carried out in the orders passed by the Tribunal by a process known to law and which is authorised by law and by this we refer to the provisions of Section 35 of the WEalth-tax Act under which the tax authorities as also the Tribunal are bound to rectify mistakes which are apparent from the record in the orders passed within a stipulated period. Then again, the decision of the Hon'ble Delhi High Court in the case of R.K. Sawhney, Executor of the Estate of Late R.B. Nathu Ram (supra) does not advance the assessee's line of argument as that was a case in which an issue had become final against the assessee by an earlier order of the Tribunal, but the same issue was sought to be raised in further appeal to the Tribunal arising from a fresh assessment and it was under these circumstances that their Lordships referred to the "Rule of Finality". The decision of the Hon'ble Madras High Court in the case of Khanna Auto Corpn. (supra) would also not help the assessees as that was a case in which a "review" of the earlier order passed by the Hon'ble High Court was sought, consequent to a subsequent decision of the Hon'ble Supreme Court. Their Lordships referred to the Civil Procedure Code and "established line of decisions" under Order XLVII wherein a view had been taken "that the production of a new ruling or authority which if brought to the notice of the Judge at the first hearing might have altered the judgment, is not a new and important matter within the meaning of the provision in Order XLVII, Rule 1, Civil Procedure Code." The only other remaining decision relied upon by the learned counsel, namely, that of the Privy Council in the case of Tribune Trust (supra) is also distinguishable and not at all applicable to the facts under consideration.;
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