K SATYANARAYANA Vs. INCOME TAX APPELLATE TRIBUNAL

JUDGEMENT

(1.) The petitioner challenges the validity of the order of the Tribunal, the 1st respondent herein dt. 17th Jan., 1996 in ITA Nos. 835 and 836/Hyd/94.

(2.) The petitioner is an income-tax assessee. His income is assessable under the head 'salary' He is also subscribing to chit funds of various companies and receiving dividends from them. On the question of computation of taxable income for the asst. yrs. 1991-92 and 1992-93 the dividends received were added as income and without allowing the deduction claimed by the petitioner, the 2nd respondent passed the assessment order. The petitioner filed an appeal before the CIT(A), Hyderabad. But the same was dismissed by the CIT(A). The petitioner then carried the matter in second appeal before the 1st respondent. The 1st respondent by order dt. 17th Jan., 1996 dismissed the appeal. It is the correctness of that order that is assailed in this writ petition.

(3.) Mr. C. Kondandaram, the learned counsel for the petitioner, submits that the Tribunal failed to follow the judgment of the jurisdictional High Court, therefore, it has committed gross illegality which could be challenged in a writ petition under Art. 226 of the Constitution. We are afraid we cannot accede to the contention of the learned counsel, firstly because the judgment of the jurisdictional High Court in CIT vs. Kovur Textiles & Co. (1982) 136 ITR 61 (AP) was considered by the Tribunal and distinguished and secondly because the scheme of the IT Act provides a reference to this Court under s. 256 at the instance of the assessee as well as at the instance of the Revenue. An opportunity is given to the assessee to file an application before the Tribunal requesting the Tribunal to state the case and refer the questions of law raised before it. If the Tribunal agrees that any question of law arises from the judgment of the Tribunal, it has to refer the same to this Court. But if the Tribunal feels that no question of law arises from the order of the Tribunal, it can reject the application. As against the order of rejection by the Tribunal, the assessee or the Revenue, as the case may be, is given the right to approach this Court under s. 256(2) of the IT Act. If this Court finds that a question of law does arise, the Court can direct the Tribunal to state the case and refer the question of law. For this reason, the writ petition challenging the validity of the order of the Tribunal cannot be entertained. Further, it is also submitted by the learned counsel that in a case of reference, the petitioner cannot claim stay of recovery of tax from this Court. In our view the reason that the petitioner can obtain interim order under Art. 226 of the Constitution can hardly be a ground to entertain the writ petition.