Uttarakhand Environment Protection and Pollution Control Board V. Union of India and Income Tax Department

WPMS/1107/2015

AI Insights

The case involves the Uttarakhand Environment Protection and Pollution Control Board (petitioner) challenging several notices/orders issued by the Income Tax Department (respondents) under the Income Tax Act, 1961. The petitioner sought a writ of certiorari to quash these notices and requested an interim relief to stay their operation. The core issue revolved around the petitioner's application for exemption under Section 10(46) of the Income Tax Act, which had not been responded to by the Central Government, unlike similar boards in other states. The court considered the jurisdictional aspects of the Income Tax Appellate Tribunal and the appropriate forum for granting stay on recovery actions, ultimately directing the petitioner to pursue the statutory appeal route.

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 694280 (HC-UTTARAKHAND)
• Appeal Type: Others
• Pronouncement Date: 19-05-2016
• Assessment Year: misc
• Other Referred Cases: CIT, Delhi vs Bansi Dhar and sons with CIT, Bihar, Patna vs Chathuram Bhadani, etc., 1986 (1) SCC 523, Abbas Wazir Pvt. Ltd. vs Income-Tax Appellate Tribunal and others, 1994 (205) ITR 457
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: HARI MOHAN BHATIA
• Assessee Lawyers: ARVIND VASHISTH; D P MITTAL; K R GAZI
• Keywords: Certiorari; Certiorari; Exemption; Income Tax; Pollution Control; Quashing; State boards
• Section: 143(3); 200A; 143(1); 246A; 260; 249; 10(46)

Judgement Text

"IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL Writ Petition No. 1107 of 2015 (M/S) Uttarakhand Environment Protection and Pollution Control Board …… Petitioner versus Union of India and others ……. Respondents Mr. Arvind Vashisth, Sr. Advocate assisted by Mr. D.P. Mittal and Mr. K.R. Gazi, Advocates for the petitioner. Mr. Hari Mohan Bhatia, Standing Counsel for Income Tax Department / respondent nos. 2 to 4. U.C. Dhyani, J. (oral) By means of present writ petition, the petitioner seeks writ in the nature of certiorari quashing the impugned notices/orders dated 05.01.2015, 23.02.2015, 04.03.2015 and 10.03.2015 (Annexure 2) and 17.03.2015 (Annexure 3) issued by the respondent no. 3 and direct the respondent no. 3 not to issue further orders and notices in this regard. A prayer has also been made directing respondent no. 1 / Central Government (CBDT) to dispose the application of the petitioner seeking exemption expeditiously. 2) An interim relief application has been filed on behalf of the petitioner with the prayer to stay the effect and operation of the impugned notices/orders dated 05.01.2015, 23.02.2015, 04.03.2015 and 10.03.2015 (Annexure 2) and 17.03.2015 (Annexure 3) and direct the respondents not to take any coercive steps against the petitioner. 2 3) Learned Senior Counsel for the petitioner submitted, among other things, that the letter dated 10.03.2015, sent on behalf of the petitioner to the Commissioner of Income Tax at Dehradun for exemption under Section 10(46) of the Income Tax Act, 1961, remains un-replied till date. Learned Senior Counsel has also referred to Annexure 8 to the writ petition, which is copy of Notification issued by Ministry of Environment and Forests to Central Board of Direct Taxes, Department of Revenue, Ministry of Finance on the subject -‘Exemption to State Pollution Control Boards from filling income tax returns’. 4) Learned Senior Counsel has also referred to Annexure S.A.2 to the supplementary affidavit, which are the Notifications exempting Tamil Nadu Pollution Control Board, Rajasthan State Pollution Control Board and Uttarakhand State AIDS Control Society arguing that when Tamil Nadu Pollution Control Board, Rajasthan State Pollution Control Board, Uttarakhand State Aids Control Society and West Bengal Pollution Control Board could be given exemption under Section 10(46) of the Income Tax Act, 1961, why the petitioner Board, who is performing the same duties, can not be given the same relief? It is also the statement of learned Senior Counsel for the petitioner that rupees fifteen crores had already been deposited by the petitioner Board in favour of Revenue (copy Annexure 9 to the writ petition) and the Revenue has also secured an amount of rupees four crores yesterday by seizing the bank accounts of the petitioner Board. 3 5) Learned counsel for the respondents (Revenue), at the very outset, submitted that the petitioner Board has not filed statutory appeal before the CIT(Appeals), who is the only authority to grant stay to the petitioner. Learned counsel for the Revenue also placed a copy of judgment rendered by Hon’ble Apex Court in CIT, Delhi vs Bansi Dhar and sons with CIT, Bihar, Patna vs Chathuram Bhadani, etc., 1986 (1) SCC 523 before this Court. Paragraph nos. 38 and 39 of which are important in the context of the present writ petition. The same read as under: “38. The Calcutta High Court in the case of Dwarka Prasad Bajaj v. Commissioner of Income-tax, West Bengal-I, (1980) 126 ITR 219 observed that in exercising its jurisdiction under Section 250 of the Income-tax Act, 1961, the High Court did not act as a Court of Appeal, as the Income-tax Appellate Tribunal does under Section 254 of the Act. The High Court, in disposing of the reference, could only answer the questions actually referred and could not raise any question by itself. The findings of fact by the Tribunal were final so far as the High Court was concerned and only on limited grounds such findings of fact could be challenged. After the judgment of the High Court is delivered, the Tribunal has to pass necessary orders to dispose of the case in conformity with the judgment under Section 260 of the Act. The High Court exercised a very limited jurisdiction. It did not dispose of the entire matter but its decision was confined only to the questions of law as arise from the order of the Tribunal. Therefore, it could not be said that the High Court exercised its general jurisdiction under Article 227 of the Constitution in dealing with a reference. If the High Court could in such case exercise its powers under equity jurisdiction and grant a temporary injunction or a stay it would have to ascertain and to go into facts for which the Income-tax Act, 1961 did not make any provision. Moreover, issuance of orders permitting collection or recovery of tax or staying such collection or recovery if made under exercise of inherent power would result in extension of the jurisdiction of the High Court under Section 256 of Act of 1961. The Calcutta High Court, further, was of 4 the view that a Court could not vest itself with such additional jurisdiction by invoking its inherent powers. Hence, the Court, in seisin of a reference under the I.T. Act could not issue an order of temporary injunction, according to the Calcutta High Court, or stay of proceedings which was an injunction in an indirect manner in respect of recovery of taxes. 39. In an appropriate case, if the assessee feels that a stay of recovery pending disposal of the reference is necessary or is in the interest of justice, then the assessee is entitled to apply before the appellate authority to grant a stay until disposal of reference by the High Court or until such time as the appellate authority thought fit. But in case the appellate authority acted without jurisdiction or in excessive jurisdiction or in improper exercise of the jurisdiction then decision of such appellate authority can be corrected by the High Courts by issuing appropriate writs under Articles 226 and 227 of the Constitution.” 6) Learned counsel for the Revenue also cited a judgment rendered by Hon’ble Allahabad High Court in Abbas Wazir Pvt. Ltd. vs Income-Tax Appellate Tribunal and others, 1994 (205) ITR 457. The last paragraph of which has been pressed in the context of this Court, which runs as under: “In view of this, it cannot be argued that the remedy available to the petitioner is not an equally efficacious remedy. Further, even if an application for interim relief is rejected by the Appellate Tribunal, the aggrieved assessee still has the remedy in an appropriate case to approach the High Court under articles 226 and 227 of the Constitution for issuing a proper writ, if the order passed by the Tribunal, refusing to grant stay has acted without jurisdiction on in excess of jurisdiction. In view of what has been stated above, we decline to interfere with the impugned order dated August 21, 1992, passed by the Income-tax Appellate Tribunal on the ground that the petitioner has an alternative remedy available under law. The petitioner is dismissed on the ground of alternative remedy available to the petitioner.” 5 7) Learned Senior Counsel for the petitioner Board submitted that the decisions cited by learned counsel for the Revenue are distinguishable from the facts of the instant case, inasmuch as the Hon’ble Supreme Court has dealt with the issue in relation to a reference ‘under Section 260 of the Income Tax Act’, which is not the subject matter in the instant case. Prima facie, the Court agrees with such submission of learned Senior Counsel for the petitioner. 8) Section 246A of the Income Tax Act, 1961, provides for appealable orders before Commissioner (Appeals). Sub Section (1) of Section 246A of the said Act is indicated here-in-below for convenience: “Any assessee [or any deductor] aggrieved by any of the following orders (whether made before or after the appointed day) may appeal to the Commissioner (Appeals) against- (a) an order passed by a Joint Commissioner under clause (ii) of sub-section (3) of Section 115VP or an order against the assessee where the assessee denies his liability to be assessed under this Act or an intimation under sub-section (1) or sub- section (1B) of section 143 or sub-section (1) of Section 200A, where the assessee or the deductor objects to the making of adjustments, or any order of assessment under sub-section (3) of Section 143 except an order passed in pursuance of directions of the Dispute Resolution Panel or an order referred to in sub-section (12) of section 144BA or section 144, to the income assessed, or to the amount of tax determined, or to the amount of loss computed, or to the status under which he is assessed.” 9) Section 249 deals with form of appeal and limitation. Sub-Section (2) of Section 249 of the said Act 6 says that the appeal shall be presented within 40 days of the date of service. 10) Learned Senior Counsel for the petitioner Board submitted that whenever any party moves for exemption, application to this effect is filed through Commissioner of Income Tax and additional copy is forwarded to the Central Board of Direct Taxes. In reply, learned counsel for the Revenue submitted that instead of filing an application to CIT(Exemptions), Lucknow the petitioner Board moved an application before CIT(Appeals) Dehradun, who has no jurisdiction over the same. 11) Nobody can be permitted to jump the hierarchy of the Court and since alternate remedy to file an appeal is available to the petitioner Board before CIT(Appeals), therefore, this Court directs the petitioner Board to file the statutory appeal under Section 246A of the Income Tax Act. When the petitioner Board files an appeal, the CIT(Appeals) is directed to take into consideration the time period which has been consumed by the petitioner Board in pursuing present writ petition. 12) Regard may be had to the letter dated 19.12.2005, written by the Ministry of Environment and Forests, CP Division to the Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, New Delhi on the subject – ‘Exemption to State Pollution Control Boards from filing income tax returns’. The last paragraph 7 of such a letter is reproduced here-in-below for convenience: “Since the State Boards are functioning under the Department of Environment in the States, they may also be treated as Government Departments and necessary exemption granted from the purview of Income Tax.” 13) Regard may also be had to various Notifications, which have been enclsoed with the supplementary affidavit filed by the petitioner Board, indicating that Tamil Nadu Pollution Control Board, Rajasthan State Pollution Control Board, Uttarakhand State AIDS Control Society and West Bengal Pollution Control Board have been granted exemption under Section 10(46) of the Income Tax Act. The Court is, therefore, inclined, keeping in view all the aforesaid documents, to stay further recovery from the petitioner Board by the Revenue for a period of two weeks from today, within which period, the petitioner Board is expected to file the statutory appeal before the CIT(Appeals). 14) As prayed, CBDT, New Delhi (respondent no. 5) is requested to decide the pending application of the petitioner Board by passing a reasoned and speaking order, in accordance with law, at the earliest possible, but not later than four weeks from the date of production of certified copy of this order alongwith a copy of application annexing all the documents. 15) Learned counsel for the Revenue is requested to convey this order to the respondent authorities forthwith. 8 16) After the order was pronounced in the open court, learned counsel for the Revenue informed the Court that the Revenue has already recovered, in addition to the amount which was recovered earlier, a sum of about Rs. twelve crores seventy seven lakhs from the petitioner Board today itself, to which fact learned Senior Counsel, on receiving instructions from his client, denied. 17) With the directions as above, the writ petition is disposed of. 18) Let copy of the order be supplied to learned counsel for the petitioner today itself on payment of usual charges. [All pending applications in the writ petition also stands disposed of.] (U.C. Dhyani, J.) Dt. May 19, 2016 Negi 9 10 "