Facts of the Case

The appellant filed ITA Nos. 320/2008 and 321/2008 before the Delhi High Court challenging an order passed by the Income Tax Appellate Tribunal under Section 254(2) of the Income-tax Act, 1961.

The appeals sought to invoke the appellate jurisdiction of the High Court under Section 260A of the Act against the Tribunal’s order passed in rectification proceedings under Section 254(2).

During the hearing, the Court considered the legal position already settled by the Full Bench of the Delhi High Court in the case of Lachman Dass Bhatia vs Assistant Commissioner of Income Tax (ITA No. 724 of 2010 decided on 06.08.2010).

Issues Involved

  1. Whether an appeal under Section 260A of the Income-tax Act is maintainable against an order passed by the Income Tax Appellate Tribunal under Section 254(2)?
  2. Whether the High Court can entertain such appeals when the issue has already been settled by the Full Bench of the Delhi High Court?

Petitioner’s Arguments

  • The appellant challenged the order passed by the Income Tax Appellate Tribunal under Section 254(2) of the Income-tax Act.
  • The appellant sought adjudication of the appeal under Section 260A before the High Court.

Respondent’s Arguments

  • The respondent relied upon the legal position settled by the Full Bench judgment of the Delhi High Court in Lachman Dass Bhatia vs Assistant Commissioner of Income Tax.
  • It was contended that an appeal against an order passed under Section 254(2) is not maintainable under Section 260A of the Act.

Court Findings

  • The Delhi High Court noted that the issue stood concluded by the Full Bench decision in Lachman Dass Bhatia vs Assistant Commissioner of Income Tax (ITA No. 724 of 2010 decided on 06.08.2010).
  • The Full Bench had categorically held that an appeal under Section 260A is not maintainable against an order passed by the Tribunal under Section 254(2) of the Income-tax Act.
  • Since the appeals before the Court arose from an order under Section 254(2), the ratio of the Full Bench judgment squarely applied.

Court Order

  • The Delhi High Court held that the appeals were not maintainable under Section 260A of the Income-tax Act.
  • Consequently, ITA Nos. 320/2008 and 321/2008 were dismissed.
  • The Court granted liberty to the appellant to initiate appropriate proceedings in accordance with law.

Important Clarification

  • An order passed by the Income Tax Appellate Tribunal under Section 254(2) does not give rise to a maintainable appeal under Section 260A of the Income-tax Act.
  • The proper remedy, if available, must be pursued through other legally permissible proceedings.
  • The judgment follows and reinforces the Full Bench ruling in Lachman Dass Bhatia vs Assistant Commissioner of Income Tax, which settled the law on this issue.

Sections Involved

  • Section 254(2) of the Income-tax Act, 1961
  • Section 260A of the Income-tax Act, 1961

Link to download the order -

https://delhihighcourt.nic.in/app/case_number_pdf/2010:DHC:9667-DB/AKS23092010ITA3212008_144821.pdf 

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