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2000 Supreme(Kar) 702
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
H.L. Dattu, J.
L. Sohanraj and Others — Appellant
Vs.
Deputy Commissioner of Income Tax and Another (No. 1) — Respondent
Writ Petition Nos. 40259 to 40262 of 1999
Decided on : 11-04-2000
Advocate Appeared:
Mr. Madhusudhan R. Naik, for the Appellant.
Mr. M.V. Seshachala, for the Respondent.
The existence of alternative remedy had always been regarded as one of the factors which the court is required to bear in mind while exercising its discretionary jurisdiction.
Headnote:
Income Tax - Appellate Tribunal - Sections 260A, 260B - The court discussed the provisions of Sections 260A and 260B of the Income Tax Act, which provide for an appeal to the High Court against the orders made by the Income Tax Appellate Tribunal if the case involves a substantial question of law. The court highlighted the objects and reasons for introducing these provisions and emphasized the power of the High Court to determine any issue not determined or wrongly determined by the Appellate Tribunal.
Fact of the Case:
The Income Tax Appellate Tribunal allowed in part the appeals preferred by the assessees and the Income Tax Department against the orders framed by the Commissioner of Income Tax (Appeals). The petitioners sought rectification of the mistake apparent on the face of the record under Section 254(2) of the Income Tax Act, which was rejected by the Tribunal. The correctness of this rejection was called into question by the petitioners before the court.
Finding of the Court:
The court held that the petitioners have an alternative, effective, and efficacious remedy provided under the statute itself and are not entitled to invoke the discretionary jurisdiction of the court seeking a writ to cancel the orders made by the Income Tax Appellate Tribunal.
Issues: The main issue was whether the court should entertain the petitions seeking a writ to cancel the orders made by the Income Tax Appellate Tribunal when the petitioners have an alternative remedy provided under the statute itself.
Ratio Decidendi: The court emphasized that when a right or liability is created by a statute which itself prescribes the remedy or procedure for enforcing the right or liability, resort must be had to that particular statutory remedy before seeking the discretionary remedy under Article 226 of the Constitution.
Final Decision: The petitions were rejected, and the court reserved liberty to the petitioners to question the correctness or otherwise of the orders made by the Income Tax Appellate Tribunal before an appropriate forum for redressal of all their grievances.
H.L. Dattu, J.—Since common questions of facts and law are involved in all these petitions, they are clubbed, heard and disposed of by this common order.
2. The Income Tax Appellate Tribunal, Bangalore, by its common order dated December 31, 1998, has allowed in part, the Appeals Nos. 63 to 67 of 1997, 68 to 72 of 1997, 73 to 77 of 1997, 78 to 82 of 1987, 180 to 184 of 1997, 185 to 189 of 1997, 190 to 194 of 1997, 195 to 199 of 1997 and 84 to 87 of 1997 for the assessment years 1989-90 to 1993-94, preferred by the assessees and the Income Tax Department, against the orders framed by the Commissioner of Income Tax (Appeals) dated December 27, 1996. The petitioners being of the view that there are certain mistakes, which are apparent on the face of the record/order made by the Tribunal, had filed common petitions under Section 254(2) of the Income Tax Act, inter alia, seeking rectification of the mistake apparent on the face of the record and those miscellaneous petitions are rejected by the Tribunal by its common order dated July 23, 1999, on the sole ground that the petitioners are seeking a review of the order made by the Tribunal, which is impermissible under Section 254(2) of the Act. It is the correctness or otherwise of this common order made by the Tribunal, which is called in question by the petitioners before this court in these petitions filed under Article 226 of the Constitution of India.
3. Sri Madhusudhan R. Naik, learned counsel for petitioners, in support of the reliefs sought in these petitions firstly points out nearly seven so called mistakes committed by the Tribunal in its common order dated December 31, 1998, and submits that when it was brought to the notice of the Tribunal by filing an application/petition by the petitioners, the Tribunal could not have rejected the petitions solely on the ground that the petitioners are merely seeking a review of the order, which is impermissible under Section 254(2) of the Act and therefore submits that since the order made is arbitrary and is in violation of the principles of natural justice, the same requires to be set aside by this court and the matter requires to be remitted back to the Tribunal to decide the miscellaneous petitions in accordance with law. In support of this contention, learned counsel mainly relies upon the observations made by this court in the case of J.K. Panthaki and Co. vs. Assistant Registrar, ITAT (W.P. No. 23835 of 1990 disposed of on April 6, 1992).
4. Per contra, Sri Seshachala, learned standing counsel for the Revenue, apart from justifying the orders made by the Tribunal on the miscellaneous petitions filed by the petitioners on the merits, submits that this court should decline to exercise its extraordinary and discretionary jurisdiction to entertain these petitions, "since the petitioners have an equally effective, efficacious alternate remedy by way of an appeal under Section 260A of the Act. In support of this contention, learned counsel draws my attention to certain observations made by the apex court in the cases of C.A. Abraham, Uppoottil, Kottayam Vs. The Income-tax Officer, Kottayam and Another, AIR 1961 SC 609 and Champalal Binani Vs. The Commissioner of Income Tax, West Bengal and Others, AIR 1970 SC 645.
5. In Chapter XX of the Income Tax Act, the Legislature has thought it fit to introduce Sections 260A and 260B to provide for an appeal to the High Court against the orders made by the Income Tax Appellate Tribunal, if the High Court is satisfied that the case involves a substantial question of law. The objects and reasons for introducing these new provisions is found in the Bill (1998 231 ITR 3246, 246). The same is as under :
"Direct appeal to High Courts.--According to the existing provisions, appeals arising out of the order of the Appellate Tribunal lie to the High Court where substantial question of law is involved therein. The assessee or the Commissioner can request the Appellate Tribunal for reference of questio
