Facts of the Case

The appellant filed an appeal before the Delhi High Court challenging the order dated 29.08.2008 passed by the Income Tax Appellate Tribunal (ITAT). The Tribunal had rejected the appellant's application seeking permission to urge two additional grounds in the pending appeal before it.

The appellant also sought condonation of delay, contending that the impugned order dated 29.08.2008 had been received only on 12.09.2008 and therefore there was effectively no delay in filing the appeal against that order.

The High Court noted that the order under challenge was merely an interim order passed during the pendency of the appeal before the Tribunal. The Tribunal had earlier, by its order dated 14.07.2008, already rejected a similar application seeking permission to raise the same additional grounds. Subsequently, the appellant filed another application seeking identical relief, which was also rejected by the Tribunal.

Aggrieved by the rejection of the second application, the appellant approached the High Court under Section 260A of the Income-tax Act, 1961.

 

Issues Involved

  1. Whether an appeal under Section 260A of the Income-tax Act is maintainable against an interim order of the Income Tax Appellate Tribunal rejecting an application for raising additional grounds.
  2. Whether the Tribunal was justified in rejecting a second application seeking permission to urge additional grounds when a similar application had already been rejected earlier.
  3. Whether the assessee could challenge the rejection of additional grounds while filing an appeal against the final order of the Tribunal.

 

Petitioner’s Arguments

The appellant submitted that:

  • The appeal was directed against the order dated 29.08.2008.
  • The said order was received on 12.09.2008.
  • Therefore, if the appeal was confined to challenging the said order, there was no delay in filing the appeal.
  • The Tribunal ought to have permitted the appellant to urge the two additional grounds raised in the application.

 

Respondent’s Arguments

The respondent opposed the appeal and supported the Tribunal's decision.

It was contended that:

  • The impugned order was only an interim order passed during the pendency of the appeal before the Tribunal.
  • A similar application seeking permission to raise the same additional grounds had already been rejected by the Tribunal through its earlier order dated 14.07.2008.
  • Consequently, the Tribunal was justified in rejecting the subsequent application seeking identical relief.

 

Court Findings

The Delhi High Court observed that:

  • The impugned order was an interim order and the main appeal before the Tribunal was still pending.
  • The Tribunal had already rejected an earlier application for raising the same additional grounds through its order dated 14.07.2008.
  • Therefore, rejection of the subsequent application seeking identical relief could not be said to be improper.
  • Since the appeal before the Tribunal had not yet been decided, there was no necessity for the High Court to interfere at that stage.
  • If the final decision of the Tribunal were ultimately adverse to the assessee, the assessee would still be entitled to challenge the final order by filing an appeal under Section 260A and could then raise the contention that the Tribunal ought to have allowed the additional grounds.

 

Court Order

The Delhi High Court held that:

  • The appeal was directed against an interim order of the Tribunal.
  • Interference at that stage was not warranted.
  • The assessee would have an adequate remedy after the final order of the Tribunal if the decision went against it.
  • Accordingly, the appeal was dismissed.

 

Important Clarification

The Court clarified that rejection of an application seeking permission to raise additional grounds during the pendency of proceedings before the Tribunal does not necessarily foreclose the assessee's rights.

Where the final order of the Tribunal is adverse to the assessee, the assessee may challenge the final order under Section 260A of the Income-tax Act and may also contend that the Tribunal erred in refusing permission to raise the additional grounds.

The decision thus emphasizes that appeals against interlocutory or interim procedural orders of the Tribunal are generally not entertained when an effective statutory remedy remains available after the final adjudication.

Sections Involved

  • Section 260A of the Income-tax Act, 1961
  • Powers and procedure relating to appeals from orders of the Income Tax Appellate Tribunal (ITAT)


Link to download the order -

https://delhihighcourt.nic.in/app/case_number_pdf/2009:DHC:7251-DB/AKS10082009ITA3182009_161306.pdf

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