…Petitioner(S v. Income Tax Appellate Tribunal & Anr

IN THE HIGH C0URT 0F JAMMU & KASHMIR AND LADAKH AT SRINAGAR OWP No. 1127/2009 M/s Kashmir Fabric Industries Reserved on 21.10.2021 Decided on 28.10.2021 …Petitioner(s) Through: Mr. Z. A. Shah, Sr. Adv. with Mr. A. Hanan, Adv. Vs. Income Tax Appellate Tribunal & Anr. ...Respondent(s) Through: Mr. J. A. Kawoosa, Sr. Adv. with Mr Aatir Javed, Adv. CORAM: HON’BLE THE CHIEF JUSTICE HON’BLE MR JUSTICE VINOD CHATTERJI KOUL, JUDGE J U D G M E N T Pankaj Mithal, CJ 1. Heard Mr. Z. A. Shah, senior counsel assisted with Mr A. Hanan, learned counsel for the petitioner and Mr. J. A. Kawoosa, senior counsel assisted with Mr Aatir Javed, learned counsel for the respondents. learned counsel for the petitioner and Mr. J. A. Kawoosa, senior counsel assisted with Mr Aatir Javed, learned counsel for the respondents. 2. The petitioner M/s Kashmir Fabric Industries through its proprietor has preferred this petition under Article 226 of the Constitution of India so as to challenge the judgment and order of the Income Tax Appellate Tribunal dated 30.12.2008 in respect to the assessment year 2005-2006 and the subsequent order dated 24.04.2009 again passed by the Tribunal rejecting the application of the petitioner for rectifying the earlier order. preferred this petition under Article 226 of the Constitution of India so as to challenge the judgment and order of the Income Tax Appellate Tribunal dated 30.12.2008 in respect to the assessment year 2005-2006 and the subsequent order dated 24.04.2009 again passed by the Tribunal rejecting the application of the petitioner for rectifying the earlier order. 3. Briefly stated the assessing authority for the relevant year vide assessment order dated 28.12.2007 denied benefit under Section 80IB of the Income Tax Act as the petitioner could not produce evidence regarding consumption of electricity to establish actual production. The appeal against the said order was dismissed on 20.06.2008 by the Commissioner of Income Tax (Appeals) and so was the further appeal by the tribunal by the impugned order. The petitioner filed application under Section 254(2) of the Income Tax Act for the rectification of the assessment order dated 28.12.2007 denied benefit under Section 80IB of the Income Tax Act as the petitioner could not produce evidence regarding consumption of electricity to establish actual production. The appeal against the said order was dismissed on 20.06.2008 by the Commissioner of Income Tax (Appeals) and so was the further appeal by the tribunal by the impugned order. The petitioner filed application under Section 254(2) of the Income Tax Act for the rectification of the order of the tribunal on the ground that the tribunal has failed to consider the certificate of payment of electricity dues for the year 2004-2005 (relevant for the assessment year 2005-2006) to establish the electricity consumption to prove production. The said application was also rejected as the tribunal opining that in the garb of rectification, the petitioner is seeking review of the order dated 30.12.2008 which is not permissible in law. 4. Mr Z. A. Shah, senior counsel submits that the orders of the tribunal stands vitiated for non-consideration of the certificate of payment of electricity dues for the year 2004-2005. On the other hand Mr Kawoosa, submits that the writ petition is not maintainable as the petitioner has an alternative remedy of filing a statutory appeal under Section 260-A of the Act. Secondly, the petitioner never produced the aforesaid certificate before any of the authorities and, as such, the tribunal has not committed any error in upholding the appellate order of the Commissioner (Appeals) as well as the assessing authority. The petitioner may have filed the aforesaid certificate only along-with the rectification application and, as such, the authorities have rightly not taken cognizance of the same. 5. 4. Mr Z. A. Shah, senior counsel submits that the orders of the tribunal stands vitiated for non-consideration of the certificate of payment of electricity dues for the year 2004-2005. On the other hand Mr Kawoosa, submits that the writ petition is not maintainable as the petitioner has an alternative remedy of filing a statutory appeal under Section 260-A of the Act. Secondly, the petitioner never produced the aforesaid certificate before any of the authorities and, as such, the tribunal has not committed any error in upholding the appellate order of the Commissioner (Appeals) as well as the assessing authority. The petitioner may have filed the aforesaid certificate only along-with the rectification application and, as such, the authorities have rightly not taken cognizance of the same. 5. The Apex Court in Commissioner of Income Tax and Ors. vs. Chhabil Dass Agarwal (2014) 1 SCC 603 in context with the matter under the Income Tax Act clearly laid down that when a statutory forum is created by law for redressal of any grievance, a writ petition should not be entertained. 6. There is no dispute to the fact that the petitioner by means of this writ petition have challenged the two orders passed by the tribunal i.e. dated 30.12.2008 and 24.04.2009. The first order has been passed by the tribunal in an appeal arising from the assessment order and the order of Commissioner of Income Tax (Appeals). The other order is an order of rejection of an application moved by the petitioner under Section 254(2) of the Act. 7. It is submitted that against all orders passed by the tribunal, an appeal is provided under Section 260-A to the High Court and the writ petition would not lie against the same. is provided under Section 260-A to the High Court and the writ petition would not lie against the same. 8. On the other-hand, counsel for the petitioner contends that the order dated 24[th] April 2009 has been passed by the tribunal on the application filed under Section 254(2) of the Act for the rectification of the earlier order and it is not the order passed by the tribunal in appeal, and, as such, it is not appealable under Section 260-A of the Act. dated 24[th] April 2009 has been passed by the tribunal on the application filed under Section 254(2) of the Act for the rectification of the earlier order and it is not the order passed by the tribunal in appeal, and, as such, it is not appealable under Section 260-A of the Act. 9. In order to address the above issue, it is important to refer to Section 260-A of the Act which reads as under:- 260-A of the Act which reads as under:- “260A. Appeal to High Court.- (1) An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal [before the date of establishment of the National Tax Tribunal], if the High Court is satisfied that the case involves a substantial question of law.” to the High Court from every order passed in appeal by the Appellate Tribunal [before the date of establishment of the National Tax Tribunal], if the High Court is satisfied that the case involves a substantial question of law.” 10. A reading of the aforesaid provision would reveal that an appeal is provided to the High Court from every order passed in appeal by the appellate tribunal on the substantial question of law. One of the orders challenged in this writ petition is the order dated 30[th] December 2008 passed by the tribunal in an appeal preferred by the petitioner against the order of the Commissioner, Income Tax (Appeals), and, as such, is an order passed in appeal which is certainly appealable. provided to the High Court from every order passed in appeal by the appellate tribunal on the substantial question of law. One of the orders challenged in this writ petition is the order dated 30[th] December 2008 passed by the tribunal in an appeal preferred by the petitioner against the order of the Commissioner, Income Tax (Appeals), and, as such, is an order passed in appeal which is certainly appealable. 11. As far as the order dated 24[th] April 2009 is concerned, it is an order passed on an application of the petitioner filed under Section 254(2) of the Act. passed on an application of the petitioner filed under Section 254(2) of the Act. 12. The issue 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 of the Act was the bone of contention before the Full Bench of the Delhi High Court in Lachman Dass Bhatia vs. Assistant Commissioner of Income Tax & connected appeals (2011) 330 ITR 243 Del. The Full Bench upon consideration of the entire law categorized the orders passed under Section 254(2) of the Act into three categories and laid down as under: 254(2) of the Act is an order in appeal which is amenable to further appeal under Section 260-A of the Act was the bone of contention before the Full Bench of the Delhi High Court in Lachman Dass Bhatia vs. Assistant Commissioner of Income Tax & connected appeals (2011) 330 ITR 243 Del. The Full Bench upon consideration of the entire law categorized the orders passed under Section 254(2) of the Act into three categories and laid down as under: “(i) An order passed under Section 254(2) recalling an order in entirety would not be amenable to appeal under Section 260A of the Act. entirety would not be amenable to appeal under Section 260A of the Act. (ii) An order rejecting the application under Section 254(2) is not appealable. not appealable. (iii) If an order is passed under Section 254(2) amending the order passed in appeal, the same can be assailed in further appeal on substantial question of law.” order passed in appeal, the same can be assailed in further appeal on substantial question of law.” 13. In view of the above Full Bench decision 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 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. 14. Accordingly, the petitioner has rightly invoked the writ jurisdiction of the court so as to challenge the order dated 24[th] April 2009 passed by the tribunal. the court so as to challenge the order dated 24[th] April 2009 passed by the tribunal. 15. The authorities below have denied benefit under Section 80IB of the Act to the petitioner on the ground that he has failed 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. Act to the petitioner on the ground that he has failed 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. 16. 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 Rs. 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 26[th]August 2009 much after the assessment order, the appellate order by the Commissioner of Income Tax (Appeals) and the order by the 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 Rs. 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 26[th]August 2009 much after the assessment order, the appellate order by the Commissioner of Income Tax (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 24[th] April 2009 as the certificate was issued on 26[th] August 2009. 17. In view of the aforesaid facts and circumstances of the case, we do not deem it necessary to exercise our discretionary jurisdiction in the matter and the petition is dismissed. (VINOD CHATTERJI KOUL) JUDGE SRINAGAR 28.10.2021 Altaf (PANKAJ MITHAL) CHIEF JUSTICE Whether the order is reportable? Yes