2002 (5) TMI 32 - HC - Income Tax

Writ, Powers Of High Court - Aggrieved by an order passed under section 271D of the Income-tax Act, 1961, imposing penalty on account of violation of acceptance of loan in cash exceeding Rs.20,000 prohibited under section 269SS, the petitioner had preferred an appeal under section 246 of the Income-tax Act. He has also made an application under section 249, sub-section (3), for admission of the appeal, which was preferred beyond the limitation provided in sub-section (2) of section 249. This has since been dismissed by the Commissioner of Income-tax. This order has since been challenged before this court on various grounds, particularly, on the ground that the order is perverse and this court should interfere with the same. Relying on section 273B, he contends that the failure to comply with section 269SS was supported by reasonable cause and as such no penalty could be imposed upon the petitioner. - The Appellate Tribunal will decide the question of granting of stay or the appeal according to its own wisdom and discretion without being influenced by any of the observations made in this order.

Summary

Issues:
1. Appeal against penalty imposed under section 271D of the Income-tax Act for violation of acceptance of loan in cash exceeding Rs.20,000 under section 269SS.
2. Challenge of the order before the High Court on grounds of perversity and seeking interference.
3. Consideration of reasonable cause under section 273B for failure to comply with section 269SS.
4. Jurisdiction of High Court to entertain the writ petition when the order is appealable before the Appellate Tribunal.
5. Alternative remedy available under section 253 of the Income-tax Act.
6. Request for stay of demand pending appeal before the Appellate Tribunal.

Analysis:
1. The petitioner appealed against the penalty under section 271D for violating section 269SS by accepting a cash loan exceeding Rs.20,000. The appeal was dismissed due to being filed beyond the limitation period. The High Court cannot review the merits of the case as the dismissal was solely based on the appeal's timing.
2. The High Court considered the challenge on grounds of perversity and jurisdiction. The respondent argued against the appeal's merit due to a significant delay and the availability of an appeal process before the Appellate Tribunal under section 253 of the Act.
3. The petitioner cited precedents to support the petition, emphasizing perversity and illegal exercise of jurisdiction. However, the High Court found that the appeal process under section 253 provides an adequate and efficacious remedy for such cases involving disputed facts.
4. The High Court concluded that factual determinations, such as reasons for delay, are best addressed by the Appellate Tribunal. It emphasized that the existence of an alternative remedy does not bar jurisdiction but is a factor in deciding whether to exercise discretion in invoking writ jurisdiction.
5. The court highlighted that the principle of alternative remedy is well-established, especially when issues involve disputed facts. It noted that the Tribunal is better suited to handle such matters, ensuring a more effective resolution.
6. The High Court granted a temporary stay of demand to allow the petitioner time to appeal before the Appellate Tribunal. It clarified that the Tribunal would independently decide on the stay request, unaffected by the High Court's interim order.

This detailed analysis covers the issues raised in the legal judgment comprehensively, addressing the key arguments, legal principles, and the court's reasoning in each aspect of the case.