Delhi High Court
Lachman Dass Bhatia vs Assistant Commissioner Of Income ... on 6 August, 2010
Author: Dipak Misra,Chief Justice
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ITA No.724/2010
LACHMAN DASS BHATIA ..... Appellant
Through Mr. R.M. Mehta, Adv.
versus
ASSISTANT COMMISSIONER OF INCOME TAX ..... Respondent
Through Mr. Deepak Chopra, Adv.
AND
ITA No.725/2010
LACHMAN DASS BHATIA ..... Appellant
Through Mr. R.M. Mehta, Adv.
versus
ASSISTANT COMMISSIONER OF INCOME TAX ..... Respondent
Through Mr. Deepak Chopra, Adv.
AND
ITA No.726/2010
LACHMAN DASS BHATIA ..... Appellant
Through Mr. R.M. Mehta, Adv.
versus
ASSISTANT COMMISSIONER OF INCOME TAX ..... Respondent
Through Mr. Deepak Chopra, Adv.
AND
ITA No.727/2010
LACHMAN DASS BHATIA ..... Appellant
Through Mr. R.M. Mehta, Adv.
versus
ASSISTANT COMMISSIONER OF INCOME TAX ..... Respondent
Through Mr. Deepak Chopra, Adv.
AND
ITA No.728/2010
LACHMAN DASS BHATIA ..... Appellant
Through Mr. R.M. Mehta, Adv.
versus
ASSISTANT COMMISSIONER OF INCOME TAX ..... Respondent
Through Mr. Deepak Chopra, Adv.
ITA Nos.724/2010 & connected matters Page 1 of 18
AND
ITA No.729/2010
LACHMAN DASS BHATIA ..... Appellant
Through Mr. R.M. Mehta, Adv.
versus
ASSISTANT COMMISSIONER OF INCOME TAX ..... Respondent
Through Mr. Deepak Chopra, Adv.
AND
ITA No.869/2010
THE COMMISSIONER OF INCOME TAX DELHI-X ..... Appellant
Through Ms. Sonia Mathur, Mrs. Prem Lata
Bansal, Advs.
versus
M/S BAHADUR SINGH & ORS. ..... Respondents
Through None.
AND
ITA No.871/2010
THE COMMISSIONER OF INCOME TAX DELHI-X ..... Appellant
Through Ms. Sonia Mathur, Mrs. Prem Lata
Bansal, Advs.
versus
M/S VIRENDER SINGH & ORS. ..... Respondents
Through None.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE SANJIV KHANNA
HON'BLE MR. JUSTICE MANMOHAN
1. Whether reporters of the local papers be allowed to see the judgment?
2. To be referred to the Reporter or not?
3. Whether the judgment should be reported in the Digest?
ORDER
06.08.2010
DIPAK MISRA, CJ
Regard being had to the similitude of the question of law involved for
consideration in this batch of appeals, they were heard analogously for the
purpose of consideration of the limited issue referred by the Division Bench
and, accordingly, the reference is answered by a singular order.
2. It is apposite to state that when a batch of appeals, namely, ITA
Nos.724/2010 to 729/2010 were listed before the Division Bench, a
preliminary objection was raised by the revenue with regard to the
maintainability of the appeal preferred under Section 260A of the Income
Tax Act, 1961 (for brevity „the Act‟) where the legal substantiality of an
order passed under Section 254(2) of the Income Tax Act, 1961 is called in
question on the foundation that the order would not come within the ambit
and sweep of „every order as engrafted under the provision meant for
appeal‟. At that juncture, the learned counsel for the revenue had
commended to the decisions in Visvas Promoters (P) Ltd. v. Income Tax
Appellate Tribunal & Anr. (2009) 226 CTR (Madras) 638, Chem Amit v.
Assistant Commissioner of Income Tax (2005) 272 ITR 397 (Bombay) and
Shaw Wallace & Co. Ltd. v. Income Tax Appellate Tribunal & Others,
[1999] 240 ITR 579 (Calcutta).
3. Mr. Mehta, the learned counsel for the assessee-appellant, had drawn
inspiration from L. Sohanraj and Others v. Deputy Commissioner of
Income Tax and Anr. (Kar.) (No.1) [2003] 260 ITR 147 (Karnataka),
Deputy Commissioner of Income Tax v. H.V. Shantharam [2003] 260 ITR
156 (Karnataka) and Jagdish Chandra and Sons v. ITAT & Another,
[2005] 266 ITR 165 (Allahabad).
4. The Division Bench scanned the anatomy of Section 254 as well as
Section 260A and referred to the decisions of various High Courts, took note
of the fact that this Court had entertained appeals in CIT v. Hindustan Coca
Cola Beverages Pvt. Ltd. [2007] 293 ITR 163, CIT v. ITAT [2007] 293 ITR
118 (Delhi), CIT v. Honda Siel Power Products Ltd. [2007] 293 ITR 132
and Perfetti Van Melle India P. Ltd. v. CIT (Delhi) 296 ITR 595, and
thought it condign to refer to a larger Bench for an authoritative
pronouncement on the issue in question. In this backdrop, the matter has
been placed before us.
5. We have heard Mr. Chopra, learned counsel for the revenue, and
Mr.Mehta, learned counsel for the assessee. We may also note with profit
that Mrs. Sonia Mathur and Mrs. Prem Lata Bansal, learned counsel for the
revenue, have also assisted us.
6. Mr. Chopra, learned counsel for the revenue, pyramiding the
submission with regard to the maintainability of the appeal, has raised the
following submissions:
(a) If the language of Section 260A is appositely and purposefully read, it
would be clear as crystal that an order passed by the appellate tribunal
in appeal can only be assailed under Section 260A and, as the order
passed under Section 254(2) is not an order in appeal, no appeal
would lie.
(b) The sub-sections (1) and (2) of Section 260A of the Act are to be read
in conjunction as they are conceptually inextricably connected and
when read in juxtaposition, it would be clear as day that the order has
to be passed in appeal and would not include any other kind of order.
(c) Section 254(2) which empowers the tribunal to rectify a mistake
would not confer the tribunal with the power of recall and even if it is
recalled, the same cannot be the subject matter of attack in appeal
under Section 260A inasmuch as the order passed in the main appeal
becomes extinct and order of the appellate authority rises like a
phoenix.
To buttress the aforesaid submissions, the learned counsel for the
revenue has commended us to the decisions in Apex Metchem (P) Ltd. v.
Income Tax Appellate Tribunal, 318 ITR 48 (Rajasthan), R. Renganayaki
v. Commissioner of Income Tax 38 ITR 20 (Madras), Radhy Shyam
Subedar Mal v. Commissioner of Income Tax, 146 ITR 374 (Allahabad),
Rani Paliwal v. Commissioner of Income Tax, 190 CTR 566 (P&H) and
Commissioner of Wealth Tax v. Rani Krishna Devi, 84 ITR 94 (Allahabad)
and Dr. S. Paneerselvam v. Assistant Commissioner of Income Tax, 319
ITR 135 (Madras) apart from the decisions which were cited before the
Division Bench.
7. Mr. Mehta, learned counsel for the assessee, has referred us to the
Objects and Reasons to highlight why Section 260A was incorporated in the
Statute book. Quite apart from the same, the learned counsel has drawn
inspiration from a Division Bench decision of this Court in Rahulijee and
Company P. Ltd. v. ITAT & Ors., 323 ITR 327 and the authorities in L.
Sohanraj (supra), H.V. Shantharam (supra) and Jagdish Chandra (supra).
8. Mrs. Prem Lata Bansal, learned counsel for the revenue, submitted
that sub-section (4) of Section 260A has to be taken into consideration while
interpreting the provision of Section 260A in entirety so that it will be quite
clear that an appeal would lie. Be it noted, such a submission has been
canvassed by Mrs. Prem Lata Bansal as she thought it apposite to assist the
Court to put the controversy to rest.
9. To appreciate the rivalised submissions raised at the Bar, it is seemly
to refer to Section 260A of the Act which reads as follows:
"Appeal to High Court
260A (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.
(2) The Chief Commissioner or the Commissioner or an
assessee aggrieved by any order passed by the Appellate
Tribunal may file an appeal to the High Court and such
appeal under this sub-section shall be -
(a) filed within one hundred and twenty days from the
date on which the order appealed against is received by
the assessee or the Chief Commissioner or
Commissioner.
(b) omitted.
(c) in the form of a memorandum of appeal precisely
stating therein the substantial question of law involved.
(2A) The High Court may admit an appeal after the
expiry of the period of one hundred and twenty days
referred to in clause (a) of sub-section (2), if it is satisfied
that there was sufficient cause for not filing the same
within that period.
(3) Where the High Court is satisfied that a substantial
question of law is involved in any case, it shall formulate
that question.
(4) The appeal shall be heard only on the question so
formulated, and the respondents shall, at the hearing of
the appeal, be allowed to argue that the case does not
involve such question:
Provided that nothing in this sub-section shall be deemed
to take away or abridge the power of the Court to hear,
for reasons to be recorded, the appeal on any other
substantial question of law not formulated by it, if it is
satisfied that the case involves such question.
(5) The High Court shall decide the question of law so
formulated and deliver such judgment thereon containing
the grounds on which such decision is founded and may
award such cost as it deems fit.
(6) The High Court may determine any issue which -
(a) has not been determined by the Appellate Tribunal; or
(b) has been wrongly determined by the Appellate
Tribunal, by reason of a decision on such question of law
as is referred to in sub-section (1).
(7) Save as otherwise provided in this Act, the provisions
of the Code of Civil Procedure, 1908 (5 of 1908) relating
to appeals to the High Court shall, as far as may be, apply
in the case of appeals under this section."
Section 254 which deals with „orders of appellate tribunal‟ reads as
under:
"ORDERS OF APPELLATE TRIBUNAL
254 (1) The Appellate Tribunal may, after giving both
the parties to the appeal an opportunity of being heard,
pass such orders thereon as it thinks fit.
(2) The Appellate Tribunal may, at any time within four
years from the date of the order, with a view to rectifying
any mistake apparent from the record, amend any order
passed by it under sub-section (1), and shall make such
amendment if the mistake is brought to its notice by the
assessee or the Assessing Officer:
Provided that an amendment which has the effect of
enhancing an assessment or reducing a refund or
otherwise increasing the liability of the assessee, shall not
be made under this sub-section unless the Appellate
Tribunal has given notice to the assessee of its intention
to do so and has allowed the assessee a reasonable
opportunity of being heard:
Provided further that any application filed by the assessee
in this sub-section on or after the 1st day of October,
1998, shall be accompanied by a fee of fifty rupees.
(2A) In every appeal, the Appellate Tribunal, where it is
possible, may hear and decide such appeal within a
period of four years from the end of the financial year in
which such appeal is filed under sub-section (1) of
section 253 or sub-section (2) of section 253:
Provided that the Appellate Tribunal may, after
considering the merits of the application made by the
assessee, pass an order of stay in any proceedings
relating to an appeal filed under sub-section (1) of section
253, for a period not exceeding one hundred and eighty
days from the date of such order and the Appellate
Tribunal shall dispose of the appeal within the said
period of stay specified in that order:
Provided further that where such appeal is not so
disposed of within the said period of stay as specified in
the order of stay, the Appellate Tribunal may, on an
application made in this behalf by the assessee and on
being satisfied that the delay in disposing of the appeal is
not attributable to the assessee, extend the period of stay,
or pass an order of stay for a further period or periods as
it thinks fit; so, however, that the aggregate of the period
originally allowed and the period or periods so extended
or allowed shall not, in any case, exceed three hundred
and sixty-five days and the Appellate Tribunal shall
dispose of the appeal within the period or periods of stay
so extended or allowed:
Provided also that if such appeal is not so disposed of
within the period allowed under the first proviso or the
period or periods extended or allowed under the second
proviso, which shall not, in any case, exceed three
hundred and sixty-five days, the order of stay shall stand
vacated after the expiry of such period or periods, even if
the delay in disposing of the appeal is not attributable to
the assessee.
(2B) The cost of any appeal to the Appellate Tribunal
shall be at the discretion of that Tribunal.
(3) The Appellate Tribunal shall send a copy of any
orders passed under this section to the assessee and to the
Commissioner.
(4) Save as provided in section 256 or section 260A,
orders passed by the Appellate Tribunal on appeal shall
be final."
10. The question that falls for consideration is whether all orders passed
under Section 254(2) can be the subject matter of appeal. There can be no
scintilla of doubt that an order passed under Section 254(1) is assailable in
appeal. Section 254(2) has a different contour altogether. Before we advert
to the microscopic and inherent facet of Section 254(2), we would like to
notice the decisions in the field. In Chem Amit (supra), the High Court of
Bombay distinguished the decision rendered in CIT v. Durga Engineering
and Foundry Works, (2000) 162 CTR (SC) 257 and expressed the view as
follows:
"6. In Durga Engineering and Foundry Works (supra),
the Supreme Court held that the reference under s.256 of
the IT Act, 1961, could be made from the order of the
Appellate Tribunal passed on the application for
rectification under Section 254(2). That was so held by
the Supreme Court in the light of the language of s.256
which empowered the assessee and the Revenue to
"require the Tribunal to refer to the High Court any
question of law arising out of an order passed under
s.254". Sec.254 comprises two sub-sections. Sub-S.(1) of
s.254 provides that the Tribunal may pass such order on
an appeal as it thinks fit after giving both the parties to
the appeal an opportunity of being heard. Sub-s.(2) of
s.254 permits the Tribunal to rectify any mistake
apparent from the record and amend any order passed
under sub-s.(1) within four years from the date of the
order. The expression employed in s.260A that provides
for an appeal to the High Court is materially different
from the expression used in s.256 that empowers the
assessee and the Revenue to require the Tribunal to refer
to the High Court any question of law. As already noticed
above, in s.256 the expression used is, "require the
Tribunal to refer to the High Court any question of law
arising out of an order passed under s.254". However, in
s.260A, the Legislature has not provided an appeal to the
High Court from every order passed under s.254 but has
confined it to the order passed in appeal by the Tribunal.
This is made clear by the use of the expression, "an
appeal shall lie to the High Court from every order
passed in appeal by the Tribunal". If the Legislature
intended to provide an appeal to the High Court from the
order passed by the Tribunal on the application for
rectification under s.254(2), the Legislature would not
have used the expression in s.260A that an appeal shall
lie to the High Court from every order passed in appeal
by the Tribunal, but instead used the expression as is
used in s.256 that an appeal shall lie to the High Court
from every order passed under s.254. The expression, "an
appeal shall lie to the High Court from every order
passed in appeal by the Tribunal" in s.260A cannot be
equated with the expression, "an appeal shall lie to the
High Court from every order passed under s.254". In
Durga Engineering and Foundry Works (supra) also, the
Supreme Court observed that "s.256 contemplates the
reference of the question of law arising out of an order
passed under s.254; that is to say, an order passed both
under s.254(4) and s.254(2)". We have already
highlighted the departure of the language in s.260A from
the language occurring in s.256.
7. In a given case where as the consequence of an order
passed on the rectification application under s.254(2), the
amendment in the order passed in appeal under s.254(1)
takes place, such amended order in appeal as a
consequence of the order passed in the rectification
application, however, shall be amenable to appeal under
s.260A. Insofar as the present case is concerned, the
assessee has only challenged the order of the Tribunal
rejecting the application of rectification, the appeal under
s.260A is not maintainable."
[Emphasis added]
11. In Shaw Wallace case (supra), the High Court of Calcutta was dealing
with the provision whether the tribunal has power under Section 254(2) to
recall the order and obliterate the original order. It is worth noting that a
writ petition was filed challenging the order of the tribunal on behalf of the
revenue. An objection was raised that the writ petition was not maintainable
as an alternative remedy was available under Section 260A of the Act. The
learned Single Judge, while addressing with regard to the maintainability of
the appeal under Section 260A of the Act, opined that if an order under
Section 254 takes the shape of modifying the main order by way of
amendment or rectification, the original order to some extent and then both
the orders can jointly be appealable but an order of recall is clearly not
appealable.
12. In Visvas Promoters (P) Ltd. (supra), a learned Single Judge of the
Madras High Court, after referring to the decision in Chem Amit (supra), has
held thus:
"Therefore, the term, 'every order' referred to in s.260A,
apart from being qualified as one involving substantial
question of law, would mean an order which finally
disposes of the rights of the parties in controversy. In
cases where an application for rectification is made and
an order passed under s.254(2) of the Act by merely
rejecting such application, it does not decide the
substantial issue involved between the parties, since the
issue has already been decided under s.254(1) of the Act
by the Tribunal and if the application is filed
subsequently under s.254(2) by way of miscellaneous
petition for rectification of mistake within the period of
limitation, viz., 4 years and the same is rejected, it would
only make the original order passed by the Tribunal final
and if at all there is any substantial question of law that
may arise or any right of the parties is finally decided by
the Tribunal, the same can be only under the orders
passed as per S.254(1) of the Act. Therefore, such order
cannot be construed as, 'any order' referred to under
s.260A of the Act to enable the aggrieved party to file
appeal before the High Court."
13. In Apex Metchem (P) Ltd. (supra), the High Court of Rajasthan has
opined that when an order is amended under Section 254(2), the same
merges into the final order which is passed under Section 254(1) and,
therefore, the same is appealable under Section 260A but, when the order is
recalled in exercise of the power under Section 254(2), the matter is to be
reheard afresh and, hence, it cannot be said that such an order is appealable
under Section 260A of the Act. The Bench opined that if the order is
without jurisdiction, the same can be assailed under Article 226 of the
Constitution of India.
14. The Punjab and Haryana High Court in Rani Paliwal (supra), while
dealing with the maintainability of the appeal from an order of recall, opined
that such an order is not appealable.
15. The learned counsel for the revenue has also drawn inspiration from
the decision rendered in Radhey Shyam Subedar Mal (supra) wherein it has
been held that an appeal in ordinary sense means taking the order to the
higher authority for examination of its correctness and where an appeal is
barred by limitation, the same would tantamount to an order passed in
appeal as the order is still the subject matter of appeal in a different sense. It
is urged by the learned counsel for the revenue that when an appeal is
dismissed on the ground of limitation, it has the status of a decree and,
therefore, a further appeal would lie but when the order is totally recalled,
the same cannot be equated with the order passed by the tribunal giving the
stamp of approval to the order of CIT(A), the first appellate authority, since
the tribunal is still in seisin of the matter.
16. In the decision that has been placed reliance upon by Mr. Mehta in
Karan & Co. v. ITAT [2002] 253 ITR 131, a Division Bench of this Court
was dealing with a writ petition preferred by the assessee and in that context
was dealing with the scope and ambit of an application under Section
254(2). We think it fruitful to reproduce the passage dealing with the same:
"The scope and ambit of an application of section 254(2)
is very limited. The same is restricted to rectification of
mistakes apparent from the record. We shall first deal
with the question of the power of the Tribunal to recall an
order in its entirety. Recalling the entire order obviously
would mean passing of a fresh order. That does not
appear to be the legislative intent. The order passed by
the Tribunal under Section 254(1) is the effective order
so far as the appeal is concerned. Any order passed under
section 254(2) either allowing amendment or refusing to
amend gets merged with the original order passed. The
order as amended or remaining unamended is the
effective order for all practical purposes. The same
continues to be an order under section 254(1). That is the
final order in the appeal. An order under section 254(2)
does not have existence de hors the order under section
254(1). Recalling of the order is not permissible under
section 254(2). Recalling of an order automatically
necessitates rehearing and re-adjudication of the entire
subject matter of appeal. The dispute no longer remains
restricted to any mistake sought to be rectified. Power to
recall an order is prescribed in terms of Rule 24 of the
Income-tax (Appellate Tribunal) Rules, 1963, and that
too only in cases where the assessee shows that it had a
reasonable cause for being absent at a time when the
appeal was taken up and was decided ex parte. This
position was highlighted by one of us (Justice Arijit
Pasayat, Chief Justice) in CIT v. Income Tax Appellate
Tribunal [1992] 196 ITR 640 (Orissa). Judged in the
above background the order passed by the Tribunal is
indefensible."
17. On a reading of the aforesaid passage, we are of the considered
opinion that the said decision did not deal with the issue with regard to the
maintainability of the appeal preferred under Section 260A of the Act but
dwelled upon the power conferred on the tribunal under Section 254(2) of
the Act. Hence, the decision cited by Mr. Mehta, we are disposed to think,
is distinguishable.
18. As far as Section 254(1) and (2) are concerned, we have no scintilla of
doubt that both the provisions are to be read in conjunction. In Section
260A, the words „every order passed in appeal‟ have their own signification
and Section 2 which came by way of amendment by Finance Act of 1999
(27 of 1999) only provides who can prefer the appeal. The language used in
Section 260A „every order passed in appeal‟ and the language used in
Section 260A(2) „any order passed by the appellate tribunal‟, in our
considered opinion are to be read in conjunction and, therefore, the
inspiration sought to be drawn by Mr. Mehta from the decisions cited has to
be repelled because the language used by the legislature in both the Sections
has to be appositely understood as the intention of the Legislature is that the
order passed by the appellate tribunal in appeal is subject to appeal under
Section 260A. It is worth noting sub-section (2) of Section 260A is only an
enabling provision as to who can prefer an appeal. Ergo, we are constrained
to repel the submission of Mr.Mehta, and we so do.
19. In this context, we may refer with profit to the decision in
Parmeshwar Lal v. Gokhula Nandan Prasad, AIR 1984 Patna 344, wherein
it has been held thus:
"It is importance to notice that a decree is the conclusive
determination of the rights of the parties with regard to
all or, any of the matters in controversy in the suit and
may be either preliminary or final; but it is a formal
expression of an adjudication by the Court. Any
alteration in this formal expression shall undoubtedly be
a decree; but in the case of a clerical correction, this
formal expression of an adjudication of the conclusive
determination of the rights of the parties is not at all
varied, and there is no modification and/or alteration of
the decree as expressed by the Court...."
20. A Full Bench of Orissa High Court in Dinamani Debi v.
Paramananda Choudhury & Anr., AIR 1980 Orissa 177 opined as follows:
"11. An order of remand under Section 151, C.P.C. is
appealable only when it amounts to a decree. Where the
order of remand merely sets aside the decree of the trial
Court and does not itself decide any of the points raised
for determination and does not determine the rights of the
parties with regard to any of the matters in controversy in
the suit, it cannot amount to a decree and must be treated
as an order. The mere fact that the order reverses the
decree of the trial Court and deprives a party of the
valuable right it had acquired thereunder would not make
an order of remand a "decree", unless that order itself
determines any of the points arising for determination in
regard to the matters in controversy in the suit.
12. Now the question arises whether a decision such as
the impugned one is a decree or not. The definition of
"decree" indicates that it must be a formal expression of
an adjudication conclusively determining the rights of the
parties with regard to all or any of the matters in
controversy in the suit. There may be cases where the
appellate Court itself decides finally certain aspects in
dispute and thus passes a decree but in regard to certain
other matters it directs the trial Court to reach final
determination. In such cases the decision of the appellate
Court amounting to a decree may be appealable. That,
however, is not the case here. The impugned order
clearly indicates that it is not a decree. The appellate
Court, in passing the order of remand, did not
conclusively determine anything on the merits of any of
the disputes between the parties and left the entire matter
for decision to the trial Court. The mere fact that the
decree of the trial Court has been set aside would not thus
make the order of remand a decree and appealable as
such. To state otherwise, there is no final adjudication by
the appellate Court of the rights of the parties by the
order of remand. Therefore, it cannot be treated as a
decree. The order indicates that pursuant to the remand,
the trial Court must proceed to determine the suit. Thus,
the determination of the suit is yet to come and that
depends upon the adjudication by the trial Court. Such
adjudication consequent on the remand would result in
the decree. In such circumstances, a Second Appeal
could not lie to this Court. The only remedy which was
open to the petitioner was to approach this Court by a
revisional application...."
21. We have referred to the aforesaid decisions only to highlight that
when there is no final adjudication by the appellate court of the rights of the
parties, no appeal would lie. When the order passed on earlier occasion is
recalled in toto in exercise of power under Section 254(2) of the Act, there is
no adjudication of the appeal on merits. On the contrary, there is no order in
appeal. What survives is the order of the first appellate authority and not
that of the tribunal. Therefore, on this analogy, no appeal under Section
260A would lie.
22. In view of our aforesaid premised reasons, we are inclined to agree
with the view expressed by the High Court of Bombay, Calcutta, Punjab &
Haryana, Allahabad and Madras that when an order under Section 254(2) is
amended, both the main order as well as the amended order would be
amenable to appeal. As far as the view taken by the Karnataka High Court
is concerned, it is noticeable that a plea of alternative remedy was raised and
that was not accepted and the Division Bench of the Karnataka High Court
concurred with the view taken by the learned Single Judge. Therefore, with
utmost reasons, we are unable to agree with the view expressed by the
Karnataka High Court.
23. In view of our foregoing analysis, we proceed to record our
conclusions in seriatim:
(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.
(ii) An order rejecting the application under Section 254(2) is 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.
24. At this juncture, Mr. Mehta submitted that if the assessee is not in a
position to prefer an appeal, he will be left remediless. The said submission
deserves to be dealt with. When the appeal is not maintainable, in our
considered opinion, the same can be challenged by way of writ petition
under Articles 226 and 227 of the Constitution of India. Mr. Mehta further
submitted that if this Court is of the view that writ would lie, permission
should be granted to convert the appeal to the writ petition. In this context,
we may refer with profit to the decision rendered in Col. Anil Kak (Retd.) v.
Municipal Corporation, Indore & Ors., AIR 2007 SC 1130 wherein the
Apex Court has expressed thus:
"All that the High Court has done is to treat the petition
filed before it under Section 115 of the Code as a
proceeding initiated under Article 227 of the Constitution
of India. The respondents had filed the revision originally
and during the pendency of that revision the High Court
appears to have taken a view that an order in an appeal
arising from a proceeding under Order 39, Rules 1 and 2
of the Code, could not be challenged under Section 115
of the Code since the order was in the nature of an
interlocutory order. In such a situation, in our view, the
High Court rightly decided to permit the revision
petitioners before it, to convert the same as a proceeding
under Article 227 of the Constitution of India...."
25. In Nawab Shaqafath Ali Khan v. Nawab Imad Jah Bahadur, 2009
AIR SCW 2289, their Lordships have held thus:
"....If the High Court had the jurisdiction to entertain
either an appeal or a revision application or a writ
petition under Articles 226 and 227 of the Constitution of
India, in a given case it, subject to fulfillment of other
conditions, could even convert a revision application or a
writ petition into an appeal or vice-versa in exercise of its
inherent power."
26. As the appeals in the present case are not maintainable, we are
disposed to think, the same can be converted by filing proper application for
conversion and by further complying with the necessary formalities as
required under the rules to prefer the writ petition. The reference is
answered accordingly.
27. Matter be placed before the Division Bench for further adjudication.
CHIEF JUSTICE
SANJIV KHANNA, J.
MANMOHAN,J.
AUGUST 06, 2010
Pk
