2015 (5) TMI 1144 - HC - Indian Laws

Availability of effective alternative remedy - case of petitioner is that as the order of assessment has been passed during the pendency of the writ petition and the notice (Annex. 4) issued by the respondents is absolutely without jurisdiction which has led to passing of the assessment order the petitioner is entitled to question the assessment order in the present writ petition - Held that - Once a order of assessment has been passed by the respondents in the above circumstances the plea raised by learned counsel for the respondents that as now the petitioner has effective alternative remedy by way of appeal before the Commissioner (Appeals) wherein besides the assessment order it is open for the petitioner to question the legality and validity of notice under Section 147/148 of the Act the petitioner needs to approach the appellate authority under the provisions of the Act assumes significance. Hon ble Supreme Court in the case of Chhabil Dass Agarwal 2013 (8) TMI 458 - SUPREME COURT has laid down that the application/petition filed by the petitioner cannot be entertained on account of availability of effective alternative remedy - In view of the fact that post amendment the petitioner would be seeking to question the notice under Section 148 as well as assessment order it cannot be said that the judgment in the case of Chhabil Dass Agarwal is not applicable to the facts of the present case - the application seeking amendment in the writ petition the second stay application and the writ petition filed by the petitioner are dismissed.

Summary

Issues:
Challenge to notice under Sections 147/148 of the Income Tax Act, 1961 and assessment order dated 30.3.2015. Maintainability of writ petition due to alternative remedy of appeal. Application seeking amendment in the writ petition and stay of demand.

Analysis:
The petitioner challenged a notice under Sections 147/148 of the Income Tax Act, 1961, and an assessment order dated 30.3.2015 in a writ petition. The respondents contended that the writ petition was not maintainable as the petitioner had an alternative remedy by way of appeal, citing the judgment of the Supreme Court in CIT vs. Chhabil Dass Agarwal. The petitioner argued that the notice issued by the respondents was without jurisdiction, leading to the assessment order, and sought amendment in the writ petition to challenge the assessment order and stay the demand. The High Court considered the submissions and noted the passage of the assessment order during the pendency of the writ petition.

The High Court acknowledged that the assessment order was passed during the pendency of the writ petition, preventing the proceedings from becoming time-barred due to the absence of an interim order. It was highlighted that the petitioner could question the legality and validity of the notice and assessment order in an appeal before the Commissioner (Appeals) as per the Act. Referring to the Supreme Court's decision in Chhabil Dass Agarwal, the High Court emphasized the importance of utilizing the statutory remedy effectively before seeking relief through a writ petition.

The High Court emphasized that the statutory framework provided a comprehensive mechanism for tax assessment, penalty imposition, and redressal of improper orders by Revenue Authorities. The court highlighted the need for the petitioner to exhaust the available alternative remedy by appealing to the Commissioner of Income Tax (Appeals) before resorting to a writ petition. The High Court, based on the principles laid down by the Supreme Court, concluded that the petitioner's application/petition could not be entertained due to the existence of an effective alternative remedy in the form of an appeal.

The High Court directed the petitioner to approach the appellate authority within 15 days, allowing for the application seeking condonation of delay. The court instructed the appellate authority to consider the condonation of delay application sympathetically, considering the circumstances of the case. The court dismissed the application seeking amendment in the writ petition, the second stay application, and the writ petition itself, emphasizing the availability of an effective alternative remedy through the appellate process.