2021 (10) TMI 1271 - HC - Income Tax

Rectification application u/s 254 - whether the order passed on an application under Section 254(2) of the Act is an order in appeal which is amenable to further appeal under Section 260-A? - HELD THAT - As decided in M/S LACHMAN DASS BHATIA HINGWALA (P.) LTD 2010 (12) TMI 105 - DELHI HIGH COURT no appeal lies under Section 260-A of the Act against an order rejecting the application filed under Section 254(2) of the Act. Therefore, in the absence of any statutory remedy against it, the writ petition is the only remedy, if any, available. Accordingly, the petitioner has rightly invoked the writ jurisdiction of the court so as to challenge the order dated 24th April 2009 passed by the tribunal. Denied benefit u/s 80IB on failure to produce evidence regarding consumption of electricity - The petitioner has not produced the requisite bills or payment vouchers to establish that electricity was consumed for the purposes of production and that payment thereof was duly made to the department. The mere obtaining a sanction for electricity connection was rightly not deemed to be a proof of the consumption of electricity. The submission that the petitioner has provided a certificate of electricity department to establish certain payment which was not considered by the authorities and, as such, the decision of the tribunal stands vitiated is completely misconceived and cannot be accepted. The petitioner in moving the rectification application has raised the above point and argued that a certificate from electricity department showing payment of ₹ 68,906/- for electricity consumption for the year 2004-2005 relevant to the assessment year 2005-2006 was produced, but a perusal of the said certificate itself as enclosed by the petitioner himself would reveal that the same was issued by the Department on 26th August 2009 much after the assessment order, the appellate order by the CIT (Appeals) and the order by the tribunal have been passed. Thus, a certificate issued subsequent to the culmination of the above proceedings could not have been produced before any of the authorities and in fact was not available on record. It could not have been filed even along-with the rectification application which was decided on 24th April 2009 as the certificate was issued on 26th August 2009. Petition dismissed.

Summary

Issues:
Challenge to judgment and order of Income Tax Appellate Tribunal, Rejection of application for rectification of earlier order, Maintainability of writ petition against tribunal orders, Appealability of order passed under Section 254(2) of the Income Tax Act.

Analysis:

1. The petitioner challenged the judgment and order of the Income Tax Appellate Tribunal regarding the assessment year 2005-2006. The assessing authority denied benefit under Section 80IB of the Income Tax Act due to lack of evidence on electricity consumption for production. Appeals were dismissed, and a rectification application was rejected by the tribunal.

2. The petitioner argued that the tribunal's orders were flawed for not considering a certificate of payment of electricity dues. The respondent contended the writ petition was not maintainable as there was an alternative appeal remedy. The issue arose whether the tribunal erred in upholding previous orders without considering new evidence.

3. The court referred to a Supreme Court ruling emphasizing the need to exhaust statutory remedies before resorting to writ petitions. The petitioner challenged two tribunal orders, one from an appeal and the other from a rectification application under Section 254(2) of the Act.

4. The petitioner claimed the order from the rectification application was not appealable under Section 260-A of the Act. However, the court clarified that orders passed under Section 254(2) could be categorized differently based on a Full Bench decision of the Delhi High Court.

5. The Full Bench decision categorized Section 254(2) orders into three types: recalling an order entirely, rejecting an application, and amending an appeal order. The court noted that an order rejecting an application was not appealable under Section 260-A, making a writ petition the only available remedy.

6. The petitioner invoked the writ jurisdiction to challenge the tribunal's order rejecting the rectification application. The court observed that the denial of benefits under Section 80IB was justified due to the lack of evidence on electricity consumption for production purposes.

7. The petitioner's argument that a certificate of electricity payment was not considered was dismissed as the certificate was issued after the conclusion of previous proceedings. The court found no merit in the petitioner's claim and dismissed the petition.

8. In conclusion, the court held that given the circumstances of the case, there was no need to exercise discretionary jurisdiction, and the petition was dismissed.

This detailed analysis covers the issues raised in the judgment comprehensively, focusing on the key legal arguments, statutory provisions, and court decisions relevant to the case.