Facts of the Case

·         The Revenue (Petitioner) filed a writ petition in the High Court of Delhi challenging two interlocutory orders passed by the Income Tax Appellate Tribunal (ITAT) dated January 12, 2007, and April 10, 2007.

·         Through the impugned orders, the ITAT had permitted the Assessee (Bharat Heavy Electricals Ltd.) to introduce and raise an additional ground during the pending appellate proceedings.

·         Aggrieved by this permission, the Revenue moved the High Court seeking to overturn the Tribunal's decision.

Issues Involved

·         Whether the Income Tax Appellate Tribunal (ITAT) was legally justified in permitting the Assessee to raise an additional ground without obtaining prior clearance/approval from the Committee on Disputes (COD).

·         Whether a writ petition under Article 226 is maintainable or necessary against an interim order of the ITAT allowing an additional ground, when statutory remedies under Section 260A are eventually available.

Petitioner’s Arguments (Revenue)

·         The learned counsel for the Revenue contended that the ITAT erred in law by allowing the Assessee to introduce an additional ground.

·         It was strongly argued that the Assessee could not have been permitted to raise such a ground because it had failed to secure the mandatory prior approval/clearance from the Committee on Disputes (COD). Therefore, the interim orders of the Tribunal were liable to be set aside.

Respondent’s Arguments (Assessee)

·         The Assessee defended the interim directions of the ITAT, maintaining that the Tribunal holds the lawful jurisdiction to admit additional grounds to ensure substantial justice and complete adjudication of the tax dispute.


Court Order / Findings

·         The High Court of Delhi, presided over by Hon'ble Mr. Justice Madan B. Lokur and Hon'ble Dr. Justice S. Muralidhar, declined to entertain the writ petition on merits at this interlocutory stage.

·         The Court observed that keeping the writ petition pending would serve no constructive purpose other than unnecessarily burdening the court's docket.

·         The Court noted that since the ITAT had already permitted the ground to be raised, the Revenue remains fully at liberty to contest the main appeal before the Tribunal on its merits.

·         The Court held that in the event the final decision of the ITAT goes against the Revenue, the Revenue has a statutory right to challenge the final order before the High Court under Section 260A of the Income Tax Act, 1961.

·         Accordingly, the High Court disposed of the writ petition and all pending stay applications, granting explicit liberty to the Revenue to raise the specific plea—that the Tribunal erroneously permitted the additional ground without COD approval—at the time of filing a statutory appeal under Section 260A.

Important Clarification

·         Alternative Remedy & Interlocutory Orders: The judgment reinforces the principle that courts will generally not interfere with interim or procedural orders of Tribunals via writ jurisdiction if the grievance can be integrated and agitated under the omnibus statutory appeal mechanism (Section 260A) against the final order.

·         Preservation of Rights: The Revenue’s right to challenge the procedural validity of the ITAT’s order regarding the Committee on Disputes (COD) approval is not lost; it is merely deferred to the final appellate stage.

Section Involved

·         Section 260A of the Income Tax Act, 1961.


Link to download the order https://delhihighcourt.nic.in/app/case_number_pdf/2007:DHC:9191-DB/MBL30082007CW63362007_115736.pdf

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