2002 (7) TMI 24 - HC - Income Tax

(i) Whether the petitioner has a right of appeal against the order impugned to this court under section 260A of the Act? - (ii) Whether this is a fit case for this court to examine the correctness of the impugned order in exercise of the power conferred on it under articles 226 and 227 of the Constitution of India even if the right of appeal is available? - The scope of examination by this court with regard to the grievance made by the parties against the order passed by the subordinate authorities the Tribunals and courts in exercise of the power under articles 226 and 227 of the Constitution of India is much narrower and circumscribed by in-built limitations imposed on it than the right of appeal conferred in a statute. So question No. 2 is also required to be answered against the petitioner.

Issues:
1. Jurisdiction of the Appellate Tribunal to pass the impugned order.
2. Errors apparent on the face of the record in the impugned order.
3. Remarks against the petitioner and responsible officers of the Department in the impugned order.
4. Right of appeal under section 260A of the Income-tax Act.
5. Whether the High Court should examine the correctness of the impugned order under articles 226 and 227 of the Constitution of India.

Analysis:

Issue 1: Jurisdiction of the Appellate Tribunal
The petitioner challenged the order passed by the Income-tax Appellate Tribunal, arguing that the Tribunal had no jurisdiction to pass the impugned order under section 254(2) of the Income-tax Act. The petitioner contended that the order was made without considering the materials on record and contained unwarranted remarks. However, the respondent's counsel pointed out that the petitioner had a right of appeal under section 260A of the Act. The court held that the impugned order, although made under section 254(2), was a result of an application seeking rectification of the earlier order made in the appeal. Therefore, it was considered an order made in the appeal, allowing for an appeal to the High Court.

Issue 2: Errors Apparent on the Face of the Record
The court analyzed whether errors apparent on the face of the record existed in the impugned order. It was determined that the order was a result of an application for rectification and that the Tribunal had the jurisdiction to rectify the earlier order. The court emphasized the importance of not restricting the right of appeal to parties, citing previous judgments supporting this view. Consequently, the court rejected the contention that the impugned order was without jurisdiction.

Issue 3: Remarks Against the Petitioner
The petitioner raised concerns about unwarranted and uncalled-for remarks against them and responsible officers in the impugned order. However, the court did not find these remarks to be a sufficient ground for challenging the order, focusing instead on the jurisdiction and correctness of the order.

Issue 4: Right of Appeal under Section 260A
The court examined the provisions of section 260A of the Income-tax Act, which provide for an appeal to the High Court from every order passed in appeal by the Appellate Tribunal. It was established that the petitioner had a right of appeal under this section, emphasizing the importance of allowing parties the opportunity to appeal decisions affecting them.

Issue 5: Examination of Correctness of the Impugned Order
The court deliberated on whether, despite the right of appeal, it should examine the correctness of the impugned order under articles 226 and 227 of the Constitution of India. It concluded that when an alternative remedy of appeal is available, it is inappropriate for the court to exercise its extraordinary jurisdiction. The court highlighted that the scope of examination under articles 226 and 227 is narrower than that in an appeal, and thus, the court should not interfere when a right of appeal is provided.

In conclusion, the court rejected the petition but stayed the order directing the refund of the amount for a limited period, allowing the petitioner to file an appeal under section 260A of the Income-tax Act.

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