Hamza Khan vs. Asst. Commissioner of Income Tax

WP/14112/2002HC TelanganaHBHC01031109200229 April 2014Bench: CHALLA KODANDA RAM,G.CHANDRAIAH5 pages

AI SummaryDismissed

What did the High Court hold?

The High Court held that the writ petitions were not maintainable. The Tribunal's order dated 30.10.2001 was an elaborate order, even though it was ex-parte. The Tribunal had noted that the appeals had come up for hearing over 40 times, with most adjournments at the assessee's request. The assessee was given an opportunity to file written submissions within a week, but filed them beyond the stipulated time. The Court found no failure by the Tribunal to consider material or prejudice caused to the assessee. The assessment orders themselves were ex-parte due to lack of material produced by the assessee. The Court emphasized that the assessee had an ample statutory remedy under Section 260A of the Act, which could be availed for findings of fact (if perverse) and law (subject to substantial questions of law). The exercise of writ jurisdiction under Article 226 is discretionary, and in this case, the assessee failed to avail the opportunities provided. The Court found no malicious or arbitrary exercise of discretion by the Tribunal in rejecting the recall applications under Rule 24, and therefore, declined to interfere.

What were the facts?

The assessee filed writ petitions challenging an order dated 26.03.2002 by the Income Tax Appellate Tribunal (ITAT), Hyderabad Bench 'A'. The ITAT had dismissed miscellaneous petitions filed by the assessee under Rule 24 of the Income Tax Appellate Tribunal Rules, which sought to recall the ITAT's earlier order dated 30.10.2001. The original appeals (I.T.A.Nos.1265 to 1267/H/91) were filed against orders of the Commissioner of Income-tax (Appeals)-IV, Hyderabad. The assessee's counsel requested an adjournment for two days, which was refused. The assessee was directed to file written submissions within a week, which were filed on 23.10.2001, after the hearing date of 15.10.2001. The ITAT disposed of the appeals on 30.10.2001, confirming the CIT(A)'s orders, without considering the written submissions.

What were the issues?

1. Whether the Tribunal erroneously rejected the assessee's applications to recall its ex-parte order dated 30.10.2001, considering them under Section 254 of the Income Tax Act instead of Rule 24 of the ITAT Rules, thereby causing a miscarriage of justice? 2. Whether the writ petitions are maintainable given the availability of an alternative statutory remedy under Section 260A of the Income Tax Act? Assessee's Contention: The Tribunal erred in rejecting the recall applications by misinterpreting the grounds under Section 254 when they were filed under Rule 24 of the Rules, leading to a miscarriage of justice. As there is no statutory remedy against the rejection of recall orders, the assessee approached the High Court under Article 226 to set aside the ex-parte order and direct a rehearing. Revenue's Contention: An effective statutory remedy under Section 260A of the Act is available against the Tribunal's orders. The assessee is impermissibly challenging the merits of the original appeal orders under the guise of challenging the orders passed under Rule 24.

Which sections of the Income-tax Act were involved?

Section 254,Section 260A

AI-generated summary — verify with the full judgment below

HON’BLE SRI JUSTICE G. CHANDRAIAH AND HON’BLE SRI JUSTICE CHALLA KODANDA RAM WRIT PETITION Nos.14083, 14104, 14109, 14111, 14112, & 14123 OF 2002

COMMON ORDER:- (per Hon’ble Sri Justice Challa Kodanda Ram)

All these writ petitions are filed questioning the order dated 26.03.2002, passed by the Income Tax Appellate Tribunal, Hyderabad Bench ‘A’, Hyderabad, in M.P.Nos.10 to 15/Hyd/2002 in I.T.A.Nos.1265 to 1267/H/91, wherein and whereby miscellaneous petitions filed by the assessee under Rule 24 of the Income Tax Appellate Tribunal Rules (for short, ‘the Rules’) praying the Tribunal to recall the order dated 30.10.2001, in I.T.A Nos.1265 to 1267/H/91 filed by the assessee, have been dismissed, were rejected.

The main grievance of the sole petitioner in all the writ petitions is that he had filed appeals in I.T.A.Nos.1265 to 1267/H/91 before the Income Tax Appellate Tribunal, Hyderabad Bench ‘A’, Hyderabad against the orders of the Commissioner of Income-tax (Appeals)-IV, Hyderabad and the said appeals were posted for hearing on 15.10.2001, on that day, the counsel for the appellant sought for adjournment for two days on the ground of his leaving for Visakhapatnam to fulfil some social obligations. However, the Tribunal refused to adjourn the appeals and directed the petitioner to file written submissions within a week. The counsel for the petitioner filed the written submissions on 23.10.2001. The Tribunal disposed of the said appeals by its order dated 30.10.2001, confirming the orders of the Commissioner of Income-tax (Appeals), without considering the written submissions filed by the petitioner. Therefore, the petitioner filed the Miscellaneous Petition Nos. 10 to 15/Hyd/2002 in I.T.A.Nos.1265 to 1267/H/91, under Rule 24 of the Rules before the Tribunal, praying to recall the order dated 30.10.2001, passed by it in the appeals, but the said miscellaneous petitions were rejected by the Tribunal by its order dated 26.03.2002. Hence, the present writ petitions.

Sri A.V. Siva Karthekeya, learned counsel for the petitioner submitted that the Tribunal erroneously rejected to recall its exparte order dated 31.10.2001 passed in I.T.A.Nos.1265 to 1267/H/91 on the ground that the applications were filed under Section 254 of the Income Tax Appellate Tribunal Act (for short, ‘the Act’) though the applications were filed under Rule 24 of the Rules and the parameters for consideration under both provisions are different and in that view of the matter, there is a total miscarriage of justice in considering the applications. He would further submit that since there is no statutory remedy of filing appeal against the orders of rejection to recall the exparte order dated 31.10.2001 passed in the appeals, the petitioner filed the present writ petitions before this Court seeking to set aside the orders passed on merits in the appeals directing the Tribunal to re-hear the appeals afresh and to pass appropriate orders.

4) On the other hand, learned counsel appearing for the Revenue would submit that there is an effective statutory remedy available against the orders passed by the Tribunal in the appeals under Section 260A of the Act and further under the guise of challenging the orders passed under Rule 24 of the Rules the petitioner is challenging the orders passed by the Tribunal in the appeals on merits which is impermissible and prays to dismiss the writ petitions.

5) We have gone through the order dated 30.10.2001 passed by the Tribunal in I.T.A.Nos.1265 to 1267/H/91. The Tribunal had recorded in its order that the appeals came up for hearing before the Tribunal for more than 40 times and majority of the adjournments were granted at the request of the assessee, as such no, further adjournments were granted making it clear that the appeals would be disposed of basing on the evidence available on record. However, the assessee was given an opportunity of filing of written submission within one week from the date of hearing i.e., from 15.10.2001. Admittedly, written arguments came to be filed on 23.10.2001 on behalf of the petitioner i.e., beyond the time granted for filing the written arguments. It is not the case of the petitioner that while passing the orders, the Tribunal

had failed to consider any of the material available and thereby any prejudice is caused to them. A perusal of the order on merits itself would indicate that the very assessment officer himself had passed the orders exparte to the best of his judgment as there was no material produced before him to support the contentions. In the first appeal, part of relief came to be granted, and in further appeal, Tribunal had dealt with various aspects which have been raised in the grounds of appeal in detail. Without going through the merits and demerits of the order, it is suffice to say that the order dated 30.10.2001, passed by the Tribunal in appeals is an elaborate order though it is an exparte order. The writ petitioner had ample opportunity to file a statutory appeal under Section 260A of the Act which remedy was available for both with respect to finding of facts if the findings otherwise are perverse and also with respect to finding of law subject to the limitation of raising substantial questions of law in the given case. The exercise of writ jurisdiction under Article 226 of the Constitution of India being discretionary, in the facts of the case, wherein in spite of ample opportunity was given to the petitioner by the Tribunal the petitioner having failed to avail the same, now again cannot not turn around and say that he was deprived of opportunity of hearing. It is not the case of the petitioner that the Tribunal has no power to pass an exparte order. The exercise of the power by the Tribunal as per proviso to Rule 24 of the Rules itself is a discretionary and the Tribunal has exercised its discretion based on the material available on record and when we do not find such exercise of jurisdiction as discretion by the Tribunal, either malicious or arbitrary, there would be no justification to this Court to interfere with the impugned orders of the Tribunal passed under Rule 24 of the Rules.

6) For the above reasons, we see no reasons to interfere with the orders of the Tribunal in exercise of extraordinary jurisdiction of this Court under Article 226 of the Constitution of India.

7) Accordingly, all the writ petitions are dismissed. No order as to costs.

8) Miscellaneous Petitions, if any pending in these writ petitions, shall

stand closed.

_____________________ G. CHANDRAIAH, J

____________________________ CHALLA KODANDA RAM, J Date:29.04.2014. Gk HON’BLE SRI JUSTICE G. CHANDRAIAH AND HON’BLE SRI JUSTICE CHALLA KODANDA RAM

WRIT PETITION Nos.14083, 14104, 14109, 14111, 14112, & 14123 OF 2002

Date:29.04.2014. Gk

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