2010 (9) TMI 323 - HC - Income Tax

Writ petition Order of Tribunal to rectifying its order on merits - rejection of the rectification petition on the merits and not as to the maintainability appeal remedy as against every order passed in appeal by the Tribunal petition dismissed

Summary

Issues:
1. Challenge to the order of the Appellate Tribunal regarding rectification of appeal order for assessment years 1992-93 and 1995-96.
2. Consideration of additional grounds raised on the validity of the reopening of assessment.
3. Applicability of legal remedies for challenging Tribunal orders.
4. Interpretation of Section 260A of the Income-tax Act for filing appeals.

Issue 1: Challenge to the order of the Appellate Tribunal regarding rectification of appeal order for assessment years 1992-93 and 1995-96:

The writ petitions were filed against the order of the Appellate Tribunal related to the rejection of the prayer for rectification of the appeal order for assessment years 1992-93 and 1995-96. The Tribunal rectified its orders on various aspects but rejected the plea regarding the validity of the reopening of assessment. The petitioner challenged this portion of the order, leading to the filing of the writ petitions.

Issue 2: Consideration of additional grounds raised on the validity of the reopening of assessment:

The Tribunal pointed out that no legal ground challenging the validity of the reopening of assessment was taken by the assessee in the appeals for the assessment years 1992-93 and 1995-96. Despite other rectifications made, the Tribunal rejected the plea to allow the rectification petition concerning the issue raised on the reopening of assessment. The petitioner contended that the Tribunal had not considered this issue, along with several other aspects raised in the rectification petition.

Issue 3: Applicability of legal remedies for challenging Tribunal orders:

The petitioner relied on a decision emphasizing that failure by the Tribunal to consider a ground is not sufficient reason for filing an appeal. It was highlighted that the proper remedy against an order passed on the merits in the rectification petition would be to file an appeal under Section 260A of the Income-tax Act. The court clarified that the failure of the Tribunal to consider the issue raised cannot be the sole reason for filing an appeal, and the matter should be remitted back to the Tribunal for reconsideration.

Issue 4: Interpretation of Section 260A of the Income-tax Act for filing appeals:

The court analyzed the language of Section 260A of the Income-tax Act, which provides for an appeal to the High Court from every order passed in appeal by the Appellate Tribunal involving a substantial question of law. Referring to a relevant case, it was explained that the phrase "every order" in the context of appeals signifies the need for filing an appeal against orders passed on the merits rather than through a writ petition. The court concluded that the proper course for the assessee would be to file an appeal under Section 260A against the Tribunal's order passed in the rectification proceedings on the merits.

In conclusion, the court dismissed the writ petitions and connected MPs, emphasizing that the remedy against the Tribunal's order on appeal lies through the proper legal channels as per the provisions of the Income-tax Act.