Punjab National Bank vs Income Tax Appellate Tribunal

The challenge in this writ petition is to the orders dated 21-2-1989 and 9-8-1989 passed by the Tribunal dismissing the petitioner''s applications u/s 254 of the income tax Act, 1961 (''the Act''). The said applications were dismissed without according any opportunity to the petitioner to be heard. A Full Bench of this Court in the case of Smart P. Ltd. Vs. Income Tax Appellate Tribunal, has held that an opportunity of being heard has to be accorded before an application u/s 254 is finally disposed of. It is contended by the learned counsel for the respondent that in view of the decision of the Supreme Court in the case of Carborundum Universal Ltd. Vs. Central Board of Direct Taxes, New Delhi, it is not necessary to afford an opportunity of being heard. We are unable to agree. In the case of Carborundum Universal Ltd. (supra), the Court was dealing with the provisions of section 220(2A) of the Act which, as held by the Supreme Court, contained the discretionary power of the Board. The power u/s 254 is not a discretionary power and an application u/s 254 can be filed as of right which will be dealt with in accordance with law. We are bound by the decision of the Full Bench of this Court in Smart (P.) Ltd.''s case (supra) and, therefore, an opportunity of hearing has to be granted before an application u/s 254 is disposed of.

Shri Pandey has, however, contended that an alternative remedy is open to the petitioner which the petitioner has not availed of. When an application u/s 254 is disposed of, a reference u/s 256(1) of the Act can be filed. This has been so held by us in Commissioner of Income Tax Vs. K.L. Bhatia, . In the present case what has happened is that the petitioner had filed an application u/s 256 against the original order of the Tribunal but has not filed any application against the order dismissing the application u/s 254. Merely because the petitioner has chosen not to file an application u/s 256 against the order passed u/s 254 can be no ground for this Court to exercise its discretionary jurisdiction under article 226 of the Constitution. The petitioner had adequate remedy against the orders passed u/s 254 by moving an application u/s 256(1) and, if the said application was dismissed, by filing a further application u/s 256(2) to this Court. If the petitioner has not been delinquent enough and has allowed the period of limitation to expire that by itself can be no ground to persuade this Court to exercise its jurisdiction under article 226. When an adequate alternate remedy is provided to a citizen under the statute it is an exercise of sound discretion that the Court should refrain from exercising its extraordinary jurisdiction under article 226.

In view of the fact that the petitioner had alternative remedy open to it, we see no reason as to why we should interfere.

Dismissed.