Law: Income Tax Act, 1961

Section: 28,254(2),256

Income-tax-----Reference---Appeal to Appellate Tribunal---Rectification of mistakes--¬Chit fund ---Assessee buying its own chits in auction---Loss disallowed by Tribunal on the ground of mutuality---No application for reference from order---Application for rectification of mistake dismissed---No question of law arises for reference---Indian Income Tax Act, 1961, Ss. 28, 254(2) & 256. The assessee-company was engaged in the business of chit funds. It claimed deduction of expenditure incurred in binding on its own chits. The Tribunal held that the bid amount on its own chits and the commission amounts were outside the ambit of the Income-tax Act on the ground of mutuality and the losses on its own chits were not allowable. The assessee did not file any reference application against the decision. Instead, it filed an application under section 254(2) of the Income Tax Act, 1961, for rectification of mistakes which was dismissed. On an application for reference from this order: Held, dismissing the application, that under the provisions of section 254(4) of the Act, the Tribunals order dated May 21, 1990 became final and unless a reference application on question arising from the original order on the appeal was filed, the correctness of this order could not be challenged in a reference application challenging the correctness of the order made under section 254(2), particularly when admittedly the Tribunal did not record any fresh finding on the merits of the case in its later order. Soda Silicate and Chemical Works v. CIT (1989) 179 ITR 588 (P&H) ref. JUDGMENT D.K. JAIN, J.---By this application under section 256(2) of the Income Tax Act, 1961, the assessee seeks a direction to the Income-tax Appellate Tribunal to state the case and refer the following questions, stated to be of law, for the opinion of this Court: "(i) Whether, in the facts and circumstances of the case, the Tribunal. was right in law in holding that the miscellaneous application of the appellant was an attempt to review the order of the Tribunal and not a petition pointing out mistakes in the order which were apparent from the record? . (ii) Whether, in the facts and in the circumstances…

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