VINOD KUMAR KHATRI vs. COMMISSIONER OF INCOME TAX

ITA - 1232 / 2010HC Delhi26 August 20101 pages

For Petitioner: KR MANJANI

AI SummaryWithdrawn

What did the High Court hold?

The High Court held that an appeal under Section 260A of the Income Tax Act, 1961, does not lie against an order rejecting an application filed under Section 254(2) of the Act. This decision was based on a full bench ruling of the same court in Lachman Dass Bhatia v. Assistant Commissioner of Income Tax. The reasoning is that the remedy against such an order is a writ petition under Articles 226 and 227 of the Constitution of India, not an appeal under Section 260A. The ratio decidendi is that the statutory scheme for appeals under the Income Tax Act does not contemplate an appeal against the dismissal of a rectification application; instead, the aggrieved party should pursue constitutional remedies. The operative direction was to permit the appellant to withdraw the appeal with liberty to file a writ petition. No other issue was decided on merits.

What were the facts?

The assessee, Vinod Kumar Khatri, filed an appeal under Section 260A of the Income Tax Act, 1961, challenging an order dated December 18, 2009, passed by the Income Tax Appellate Tribunal (ITAT), Delhi Bench. This ITAT order had rejected the assessee's application filed under Section 254(2) of the Act. The application under Section 254(2) arose from ITA Nos. 764 and 2795 of 2004. The High Court noted a previous full bench decision in Lachman Dass Bhatia v. Assistant Commissioner of Income Tax, which held that no appeal lies against an order of rejection under Section 254(2), but a writ petition is entertainable. Consequently, the assessee's counsel was granted permission to withdraw the appeal to file a writ petition.

What were the issues?

1. Whether an appeal under Section 260A of the Income Tax Act, 1961, lies against an order of rejection of an application under Section 254(2) of the Act. (Question of law). Assessee's Contention: The assessee filed the appeal under Section 260A of the Act, implying an assertion that such an appeal is maintainable. The specific arguments supporting this contention are not recorded in the judgment. Revenue's Contention: The judgment records no arguments from the respondent (Revenue). However, the High Court's decision was based on its own interpretation of the law and a precedent.

Which sections of the Income-tax Act were involved?

Section 260A,Section 254(2)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF DELHI AT NEW DELHI #19 ITA 1232/2010 . VINOD KUMAR KHATRI ..... Appellant Through Mr. K.R. Manjani, Adv. versus . COMMISSIONER OF INCOME TAX ..... Respondent Through None. CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE MANMOHAN . . . O R D E R 26.08.2010 . The present appeal preferred under Section 260A of the Income Tax Act, 1961 (for brevity ?the Act?) is directed against the order dated 18th December, 2009 passed by the Income Tax Appellate Tribunal, Delhi Bench : ?H? New Delhi (for short ?the tribunal?) in M.A. No.571/Del/08 arising out of ITA No.764 and 2795 of 2004 whereby the tribunal has rejected the application under Section 254(2) of the Act preferred at the instance of the assessee. A full bench of this Court in Lachman Dass Bhatia v. Assistant Commissioner of Income Tax (ITA No.724/2010) on 6th August, 2010 has held that against an order of rejection under Section 254(2), no appeal lies but a writ petition could be entertainable. ITA 1232/2010 Page 1 of 2 In view of the aforesaid, learned counsel is permitted to withdraw the appeal to file a writ petition under Articles 226 and 227 of the Constitution of India. With the aforesaid liberty the appeal stands disposed of. . . . CHIEF JUSTICE . . . MANMOHAN, J AUGUST 26, 2010 vk . . . . . . . . . . . . . . . . . . . . . ITA 1232/2010 Page 2 of 2 .

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