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Mohan Lal Agarwal v. Commissioner of Income-tax, Aligarh & ors. - WRIT - C No. 796 of 2003 [2003] RD-AH 192 (8 July 2003)


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Mohan Lal Agarwal ---------       Petitioner


Commissioner of Income-tax,

Aligarh & ors. ------------ Respondents


Hon'ble Dr. B.S.Chauhan, J.

Hon'ble D.P.Gupta, J.

(By Hon'ble Dr. B.S.Chauhan, J.)

This writ petition has been filed challenging the impugned order dated 31st March, 2003, by which the learned Revisional Authority, i.e., Commissioner of Income-tax has disposed of the revision application filed by the petitioner-assessee, under Section 264 of the Income-Tax Act, 1961 (hereinafter referred to as the Act 1961) being aggrieved by the demand contained in letter dated 11.3.2002.

Heard S/Shri R.P.Agarwal and V.K.Agarwal, learned counsel appearing for the petitioner and Shri Shambhu Chopra, learned counsel appearing on behalf of the respondents.

While arguing the revision application by the representative of the assessee, it has vehemently been submitted that demand letter dated 11.3.2002 had been issued by the Assessing Authority without any merit. In memo of revision, the said  ground had been taken that it was specifically agitated by the assessee's representative. In the impugned order the Revisional Authority, instead of dealing with it and deciding it on merit, has brushed it aside saying that the issue had not been pressed.

It has been submitted that once the ground had been taken in revision and has been agitated before the Revisional Authority, there was no occasion for the Revisional Authority to record that the issue had not been pressed, and therefore, it has been submitted by Shri Agrawal that the petition deserves to be allowed only on this ground.

Shri Chopra, learned counsel appearing for the respondents states that if petitioner is aggrieved of the said order of the Revisional Authority on this issue, he ought to have filed the Review or Rectification Application before the Revisional Authority. However, Shri Chopra could not point out any provision in the Act providing for review.

In absence of any statutory provision providing for review, the review could not be entertained against a judicial or quasi-judicial orderxx at least, rectification application under Section 156.

In Patel Chunibhai Dajibha Vs. Narayanrao  Khanderao Jambekar, AIR 1965 SC 1457, the Hon'ble  Supreme Court had held that in absence of  any power of review,  the Tribunal could not  have  subsequently reconsidered  its previous   decision  and   the  subsequent  order re-opening the  matter was illegal,  ultra-vires and without jurisdiction.

In Harbhajan Singh Vs. Karam Singh, AIR 1966 SC 641, the Hon'ble Apex Court has held that in absence of any provision in the Act granting express power  of  review,  it is  manifest  that review could  not be made and the order in review was ultra-vires, illegal and without jurisdiction and the High  Court has rightly quashed it by the grant of   writ   under  Article   226   of   the Constitution.

While deciding the said case, the Hon'ble Supreme Court  placed reliance on a large  number of judgments,  particularly  in Drew Vs. Mills, 1891 (1) QB 450; Hession Vs,. Johns, 1914  (2) KB 421; in Re: St. Nazaire Company, (1879) 12 Ch.D..  88; and Baijnath Ram Goyanka Vs.  Nand Kumar Singh, 14 Indian Appeal 54 (PC), wherein it had categorically been held that the power of setting-aside an order, which has been made after hearing the arguments, does not lie unless it is given by the Statute. The Court, under the Statute, cannot review an order deliberately made after argument and entertain a fresh argument upon it with a view to ultimately confirming or reversing it.  The Courts may have limited power only to make a necessary correction if the order, as drawn up, did not express the intention of the Court.  A party is entitled   to assail   the judgment only by the mode as indicated in the Statute and in absence of express provision of review, it cannot be entertained for the reason that review is practically the hearing of an appeal by the same Officer who decided the case.

In Patel Narshi Thakershi & ors. Vs. Pradyumansinghji  Arjunsinghji, AIR 1970 SC 1273, the Hon'ble  Apex  Court held that the  power  to review is  not  an  inherent power.  It must be conferred by law either   specifically or by necessary implication and in absence of any provision in the Act, review of an earlier order is impermissible.

In  Maj.  Chandra Bhan Singh Vs., Latafat Ullah Khan  &  ors., AIR 1978 SC 1814,  the  Apex Court followed the earlier referred two judgments in Chunnibhai  and  Harbhan   Singh  (supra)  and observed that it is well settled that review is a  creature  of Statute and cannot be entertained in absence of a provision therefor.

In Dr. Smt. Kuntesh Gupta Vs. Management of Hindu Kanya   Mahavidhyalaya, Sitapur,  AIR  1987 SC 2186, the Hon'ble  Supreme Court held as under:-

"It   is now   established   that   a quasi-judicial authority cannot review its own order, unless the power of review is expressly conferred on  it  by  the statute   under  which  it  derives   its jurisdiction......  In the circumstances, it must be held that Vice Chancellor acted wholly without jurisdiction..... The said order of the  Vice  Chancellor dated  March  7,  1987   was  a  nullity. (Emphasis added)."

Similar  view has been reiterated by  the Hon'ble Supreme  Court in State of Orissa & ors. Vs. Commissioner of Land Records and Settlement, (1998) 7 SCC 162.

In Krishna Ashram Educational Trust Vs. District Judge, AIR 1995 All.  415, after placing reliance upon a large number of judgments of the Hon'ble Supreme Court, this Court held that in absence of a provision for review, the Authority becomes functus officio after deciding the case and it has no competence to entertain Review Application and change the order                passed by it earlier. Nor the order/Award be review under the garb of clarification/rectification/correction.

Therefore in view of the aforesaid settled legal proposition it can be summarised that in absence of any statutory provision providing for review, entertaining an application for review or under the garb of rectification is not permissible.

Language used in the Section 154 of the Act 1961 appears to be verbatim to Section 152 of the Code of Civil Procedure (hereinafter called the C.P.C.) and in exercise of that power correction is permissible only when it is necessary to give effect to the judgment, degree or order so that the manifest rights of the parties intended to be effectuated by the earlier decision of the Court may not be defeated. When degree is not clear as to what was decided and what the Court intended, the Court may amend it so as to carry out its meaning. (Vide Rai Jatindra Nath Chowdhury Vs. Uday Kumar Das & ors., AIR 1931 PC 104 and Seth Manakchand Vs. Chaube Manoharlal & Anr., AIR 1944 PC 46). This provision cannot be resorted to in order to annul the degree or where there is no clerical or arithmetical mistake or error arising from accidental slip or omission or the power can be used to re-determination the rights of parties already adjudicated upon. In Dwaraka Das Vs. State of Madhya Pradesh, 1999 (3) SCC 500 the Hon'ble Apex Court held that powers cannot be used to grant some thing which had not been granted earlier as it would not amount to accidental omission or mistake. In I. L. Janakirama Iyer & ors.  Vs.  P.M. Nilakanta Iyer & ors., AIR 1962 SC 633 the Apex Court held that as in the degree the mesne profit had been typed as a net profit and it was merely a typographical error in exercise of power under Section 152 C.P.C. the word "net" must be substituted by "mesne". The powers of the Court are limited only to correct this kind of typographical mistakes. In K. Rajamouli  Vs. A.V.K.N. Swamy, 2001 (5) SCC 37 the Hon'ble Supreme Court held that if while deciding a case interest pendente lite had not been granted it cannot be granted while allowing the application under Section 152 C.P.C. In M/S Plasto Pack Mumbai Vs. Ratnakar Bank Limited 2001 AIR SCW 3426 a similar view has been reiterated observing that power to amend a degree cannot be exercised so as to add to or substract therefrom any relief granted earlier.

In Jayalakshmi Coelho Vs. Oswald Joseph Coelho AIR 2001 SC 1084 the Hon'ble Supreme Court placed reliance upon its earlier judgment in State of Bihar Vs. Neelmani Sahu 1996 (11) SCC 528 and Bai Shakriben Vs. Special Land Acquisition Officer, 1996 (4) SCC 533 and held that the inherent powers as exemplified in S. 152 C.P.C. generally be available to all Courts and authorities irrespective of the fact whether the provisions contained under S. 152 C.P.C. may or may not strictly apply to any particular proceeding.

But the power to rectification of clerical and arithmetical errors or accidental slips does not empower the Court to have a second thought over the matter and to find a better order or degree could or should be passed. There cannot be reconsideration of merits of the matter to come to a conclusion that it would have been better and in the fitness of things to have passed an order as sought to be passed on rectification. On a second thought the Court may find that it may have committed a mistake in passing an order in certain terms but every such mistake cannot be rectified in exercise of the Court's inherent powers as contained under S. 152 C.P.C. It is to be confined to something initially intended to left out or added against such intendment.

Similar view has been reiterated in Lakshmi Ram Bhuyan Vs. Hari Prasad Bhuyan & ors. 2002 AIR SCW 4843 issue as the Apex Court held that such powers can be used limited to the extent that a clerical or arithmetical mistake occurred in the judgment, degree or order or error arising therein from any accidental slip or omission can be corrected subsequently by the Court either on its own motion or on the application of any of the parties. While deciding the said case, the Court placed reliance upon the judgment in re Swire; Mellor Vs. Swire (1885) 30 Ch.D 239 wherein it had been held that the said provisions enabled the Court to vary its judgment so as to give effect to its meaning and intention, when the order was passed.

Thus in view of the above, we are of the considered opinion that the provisions of Section 154 of Act 1961 which provide for rectification does not confer such a wide power that it may take within its ambit to reconsider the case. Thus in absence of any provisions providing for review, such a course was not available to the petitioner-assessee. As the petitioner has stated on oath that the issue has been raised in the memo of revision and has been agitated specifically, there is no reason to disbelieve him and the matter deserves to be remanded to the Revisional Authority to decide afresh.

There is much dissatisfaction over the other issue also, and it has been submitted by Shri Agrawal that the adjustment under Section 143 (1) (a) is permissible only with respect to those items which are not debated in the present case. The adjustment has been made regarding classification of business laws. By considering part of the business laws and speculation laws, which according to Shri Agrawal is not permissible in view of Section 43 (5) of the Act 1961 this being a debatable issue, no adjustment under Section 143 (1) (h) was permissible.

Shri Chopra has vehemently opposed the submission made by Shri Agrawal on this issue. However, we are of the considered opinion that if the issue of competence of issuing the demand letter dated 11.3.2002, which goes to the root of the cause, is decided in favour of the assessee, there will be no occasion to any authority to decide any other issue.

Thus without entering into the merit of the case we set aside the order passed by the Revisional Authority dated 31st March, 2003 and remand the case back to be decided afresh after giving opportunity of hearing to the representatives of both the parties.

Assessee may apply before the Revisional Authority for interim relief.

Petition succeeds and is allowed. Impugned order dated 31st March, 2003 is quashed.

Order accordingly.




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