M.C.Agarwal, J. - (1.) BY this petition under Article 226 of the Constitution of India, the petitioner challenges an order dated October 25, 1994, passed by the Income-tax Appellate Tribunal, Allahabad, whereby it allowed the petitioner's appeal against the levy of penalty under Section 271(1)(a) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), and setting aside the penalty order remanded the matter back to the Assessing Officer to comply with the provisions of Section 274(2) of the Act.
(2.) COUNTER and rejoinder affidavits have been exchanged and I have heard learned counsel for the petitioner, Shri Navin Sinha and Shri R.R. Agarwal, learned counsel for the respondents. The matter relates to the assessment year 1982-83 for which the petitioner's return of income was due to be filed on July 31, 1982, but was actually filed on February 6, 1984. There was thus a delay of 18 months and the Assessing Officer initiated proceedings for the levy of penalty under Section 271(1)(a) of the Act. After giving the assessee an opportunity of hearing, a sum of Rs. 3,95,300 was levied as penalty by order dated July 13, 1989. The petitioner appealed to the Commissioner of Income-tax (Appeals) contending, inter alia, that the levy of penalty was bad because prior approval of the Deputy Commissioner of Income-tax was not taken, as was required by Section 274(2) of the Act. The learned Commissioner of Income-tax (Appeals) took the view that Section 274(2) that was inserted with effect from April 1, 1989, by the Direct Tax Laws (Amendment) Act, 1987, was not retrospective in operation and, therefore, did not apply to proceedings already initiated. He, however, held that there, was reasonable cause for the delay of two months and, therefore, penalty should be levied for a period of 16 months only. Still aggrieved, the petitioner appealed to the Income-tax Appellate Tribunal contending again that the levy of penalty was illegal because of the non-compliance with Section 274(2) of the Act. The Tribunal accepted this contention and holding that the defect was procedural and curable, set aside the penalty order and remanded the matter to the Assessing Officer to proceed de novo in accordance with law. It is this order of the Tribunal which is challenged in the present writ petition. The Tribunal's order has been passed under Section 254 of the Act on an appeal preferred by the petitioner. Under Section 256(1) of the Act, the petitioner could move an application to the Tribunal requiring it to refer to the High Court any question of law arising out of an order passed under Section 254 of the Act and (he Appellate Tribunal has to refer a question of law arising out of its order for the opinion of the High Court.
(3.) IN the present writ petition, the petitioner's contention is that the remand of the case to the assessing authority is legally unjustified. If, therefore, a question of law arises from the order of the Tribunal, the petitioner has the alternative remedy of seeking a reference under Section 256(1) or 256(2) of the Act and a writ petition is not maintainable. The respondents in their counter-affidavit have raised this plea as well. Learned counsel for the petitioner contended that the existence of an alternative remedy does not debar the jurisdiction of the High Court to entertain a petition under Article 226 of the Constitution of INdia. It is true that there is no absolute bar, but the courts have in their own wisdom declined to exercise extraordinary jurisdiction under Article 226 of the Constitution of INdia when a petitioner has an alternative efficacious remedy. IN the present case, the petitioner has such an efficacious remedy by seeking a reference under Section 256 of the Act. Therefore, the writ petition deserves to be dismissed on this ground. Even on the merits, the petitioner has no case. Section 274(2) of the Act that has been enacted with effect from April 1, 1989, provides that no order imposing a penalty under this Chapter (Chapter XXI which includes Section 271) shall be made (a) by the Income-tax Officer, where the penalty exceeds Rs. 10,000 ; and (b) by the Assistant Commissioner, where the penalty exceeds Rs. 20,000, except with the prior approval of the Deputy Commissioner.;