2022 (7) TMI 1016 - HC - Income Tax

Maintainability of appeal in High court - denial of Deduction u/s 80IB - scope of statutory remedy available under Section 260A - whether the High Court in exercise of its writ jurisdiction under Article 226 of the Constitution of India ought to have entertain a challenge to the assessment order on the sole ground that the statutory remedy of appeal against that order stood foreclosed by the law of limitation? - HELD THAT - As held in M/S. GLAXO SMITH KLINE CONSUMER HEALTH CARE LIMITED 2020 (5) TMI 149 - SUPREME COURT once an efficacious alternative remedy by way of statutory appeal as provided under the special enactment and the assessee having failed to avail that statutory efficacious remedy, the High Court in exercise of powers conferred under Article 226 of the Constitution of India, cannot extend the statutory period of appeal which has otherwise expired. Thus, this Court cannot disregard the substantive provisions of special enactment and pass orders which otherwise can be settled only through a mechanism prescribed under the statute. This Court finds entertaining the writ petition as a matter of course without relegating the writ applicant to avail statutory remedy would be in disregard to the legal settled position of law as held by the Supreme Court. Even other wise, entertaining the writ petition beyond the statutory period of limitation would amount to taking a view inconsistent with legislative intent as explicitly provided under Section 260A(2a) of the Act, as the same would render the legislative scheme and intention behind the provisions otiose. Thus, in light of the aforesaid legal position, the petition fails on the count of preliminary objections of maintainability. We are in agreement with the argument advanced by the department that the statutory time period for filing appeal had expired long back in the month of, itself whereas instead of filing application seeking condonation of delay which had occurred in filing statutory appeal, the writ applicant has preferred present writ application without substantiating the plea of inability to file appeal within prescribed period of limitation. In such circumstances, no indulgence could be shown to the writ applicant. However, we make it clear that we have otherwise not gone into the merits of the impugned order under challenged. We make it clear that it would be open for the writ applicant to approach any other forum under the statute in accordance with law.

Issues Involved:
1. Maintainability of the writ application under Article 226.
2. Delay and laches in filing the writ application.
3. Tribunal's dismissal of the appeal for non-prosecution.
4. Availability of statutory remedy under Section 260A of the Income Tax Act.
5. Violation of principles of natural justice.

Detailed Analysis:

1. Maintainability of the writ application under Article 226:
The court examined whether it could entertain the writ petition under Article 226 of the Constitution of India despite the availability of a statutory remedy. The court acknowledged that the jurisdiction under Article 226 is wide but emphasized that it should not be exercised as a matter of course when an effective alternative remedy is available. The court referred to several precedents, including the Supreme Court's ruling in *Glaxo Smith Kline Consumer Health Care Limited*, which held that the High Court should not entertain a writ petition if the statutory period for filing an appeal has expired, as this would disregard the legislative intent.

2. Delay and laches in filing the writ application:
The writ applicant challenged the Tribunal's order dated 18.07.2014 by filing the writ application in 2020. The court noted the significant delay and emphasized that the writ applicant did not provide a sufficient explanation for not filing an appeal within the statutory period. The court held that the petitioner should have sought condonation of delay in filing the statutory appeal instead of directly approaching the High Court under Article 226.

3. Tribunal's dismissal of the appeal for non-prosecution:
The Tribunal dismissed the writ applicant's appeal for non-prosecution due to the absence of the applicant or their representative. The court referred to Rule 24 of the Income Tax Rules, 1963, which mandates that the Tribunal cannot dismiss an appeal without considering its merits. The court also cited the case of *Sanket Estate & Finance Pvt. Ltd.*, where it was held that the Tribunal erred in dismissing an appeal for non-prosecution without adjudicating on the merits.

4. Availability of statutory remedy under Section 260A of the Income Tax Act:
Section 260A provides a statutory remedy for filing an appeal before the High Court within 120 days from the date of receipt of the Tribunal's order. The court emphasized that the statutory remedy should have been availed within the prescribed period, and the High Court cannot extend this period under Article 226. The court reiterated that the legislative intent behind Section 260A is to provide a complete code for appeals, which includes a specific limitation period.

5. Violation of principles of natural justice:
The writ applicant argued that the Tribunal's dismissal of the appeal for non-prosecution violated the principles of natural justice. The court acknowledged this contention but emphasized that the appropriate course of action would have been to file an appeal under Section 260A, accompanied by an application for condonation of delay. The court held that invoking the extraordinary jurisdiction under Article 226 without first exhausting the statutory remedy was not justified.

Conclusion:
The court dismissed the writ application on the grounds of maintainability, delay, and the availability of an alternative statutory remedy. The court did not delve into the merits of the Tribunal's order but emphasized that the writ applicant could approach any other forum under the statute in accordance with the law. The judgment underscores the importance of adhering to statutory provisions and the limited scope of the High Court's jurisdiction under Article 226 in the presence of a specific legislative framework for appeals.

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