Om Prakash, J. - (1.) THE question arising for consideration at the inception in this case is whether there is an alternative remedy available to the petitioner and, if so, whether we can refuse to exercise our extraordinary jurisdiction under Article 226 of the Constitition on that ground.
(2.) THE petitioner, a registered firm, filed a return showing loss for the assessment year 1974-75, but the assessment was made at Rs. 1,00,710 giving set off of Rs. 48,666 shown as loss in the revised return. In the books of the petitioner, cash credits aggregating to Rs. 1,49,360 were noticed and the genuineness of all of them was not accepted by the Income-tax Officer. He, therefore, treated the amount of cash credits as the income of the petitioner from undisclosed sources. On appeal, the Appellate Assistant Commissioner remanded the case to the Income-tax Officer with a direction that he should examine the creditors. On further appeal, the Tribunal affirmed the remand order of the Appellate Assistant Commissioner modifying the direction that the petitioner might examine any creditor it liked and if it was in need of the assistance of the assessing authority to force the appearance of the reluctant creditors, then the same could be sought from the assessing authority. After remand, the Income-tax Officer reiterated his view that the cash credits were not genuine. On appeal, the Commissioner (Appeals) accepted cash credits aggregating to Rs. 1,38,660 and refused to accept the remaining cash credits aggregating to Rs. 9,700. THE matter was taken to the Tribunal on second round and the Tribunal reversed the order of the Commissioner (Appeals) regarding the cash credits aggregating to Rs. 1,38,660. THE result was that the order of the Income-tax Officer was restored. Against such order of the Tribunal dated March 13, 1987, the assessee made an application seeking rectification under Section 254(2) of the Income-tax Act, 1961 ("the Act"), which was rejected by the Tribunal by order dated November 16, 1987 (annexure 15 to the writ petition) Aggrieved by the aforesaid order, the petitioner has filed the instant writ petition praying that the Tribunal's order dated November 16, 1987, rejecting the application for rectification be quashed, that the Tribunal be directed to decide the rectification application afresh and that respondents Nos. 2 and 3 be restrained from effecting the recovery of tax, penalty and other amounts and from taking other penal action against the petitioner. In paragraph 45, it is averred that the Tribunal held in CIT v. M. P. Sugar Mills Co. (P.) Ltd, [1987] 23 ITD 6 (All), that an order rejecting a rectification application is not an order under Section 254 and hence no reference under Section 256(1) of the Act lies. This is why it is averred in paragraph 44 that the Tribunal's order rejecting the rectification application under Section 254(2) is final and no reference is maintainable against that.
(3.) ON the other hand, the contention of learned senior standing counsel is that reference under Section 256(1) lies against the order passed under Section 254(2) rejecting the rectification application and there being an alternative remedy, the petitioner cannot invoke the writ jurisdiction of this court under Article 226 of the Constitution. Under Section 256(1), reference can be made against any order passed by the Tribunal under Section 254. Sub-section (2), whereunder the Tribunal has passed the impugned order dated November 16, 1987, is part of Section 254 and, therefore, taking a semantic view of Section 254, it has to be held that reference under Section 256(1) will lie from the impugned order dated November 16, 1987. The learned Advocate-General to support his view-point, that no reference lies against the order passed under Section 254(2) rejecting the rectification application of the petitioner, relied on Niranjan and Co. Ltd. v. ITAT [1980] 122 ITR 519 (Cal), Popular Engg. Co. v. CIT [1983] 140 ITR 398 (MP) and CIT v. N, J. Dadabai [ 1978] 115 ITR 317 (AP).;