2021 (5) TMI 450 - HC - Income Tax

Maintainability of the writ application - alternative remedy u/s 246A - This Court jurisdiction under Article 226 of the Constitution of India with the assessment order passed by AO under the Income Tax Act when an equal efficacious alternative remedy is available to the writ applicant under Section 246A - HELD THAT - In view of the law laid down by the Apex Court in the case of Chhabil Dass Agrawal 2013 (8) TMI 458 - SUPREME COURT this Court cannot overlook the settled law that, ordinarily the writ petition under Article 226 of the Constitution of India ought not to be entertained, if an effective remedy is available, except in case if falls within the well defined exception as observed by the Apex Court in para 15 of the above judgment. We take the notice of the undisputed fact that, the notices under Sections 143(2) and 142(1) of the Act were served upon the writ applicant on 17.08.2007, 10.07.2018 and 27.08.2018 respectively to submit the explanation and/or documents to explain the cash deposit made by the writ applicant in his bank account. The writ applicant replied to the notices in part. The revenue authority had served the show-cause notice on 13.11.2018. The writ applicant sought an adjournment for 15 days for hearing and accordingly, the matter was fixed for hearing on 04.12.2018 and on that day, in absence of the writ applicant, the matter was concluded finally and ex parte assessment order came to be passed. It is required to be noted that, the whole exercise undertaken by the respondent authority was faceless, in other words, everything to be submitted online as per the CBDT guidelines in a time bound manner. Thus it cannot be said that, the writ applicant had not been given a fair opportunity of hearing. Considering Section 264A of the Income Tax Act, which provides statutory alternative remedy against the impugned order of assessment, we decline to entertain this writ application as the writ applicant failed to make out his case for invoking the discretionary jurisdiction of this Court under Article 226 of the Constitution of India. Consequently, we relegate the writ applicant to avail the alternative remedy by way of filing statutory appeal before the competent authority. If the appeal is filed, the appellate authority shall not raise technical issue of limitation and decide the same on merits in accordance with law. However, it is made clear that, this writ application is hereby disposed off on the ground of availability of statutory remedy and we have not expressed any opinion on merits including the issue of principles of natural justice. Therefore, the writ applicant may raise the issue of principles of natural justice before the Appellate Authority and the same may be considered by the Appellate Authority in accordance with law.

Summary

Issues Involved:
1. Maintainability of the writ application under Article 226 of the Constitution of India.
2. Alleged violation of principles of natural justice.
3. Availability of an alternative statutory remedy under Section 264A of the Income Tax Act, 1961.

Detailed Analysis:

1. Maintainability of the Writ Application:
The primary issue addressed by the court was whether it could entertain the writ application under Article 226 of the Constitution of India when an alternative statutory remedy was available to the petitioner under Section 264A of the Income Tax Act, 1961. The court referred to the precedent set by the Supreme Court in the case of *Commissioner of Income Tax & Ors. Vs. Chhabil Dass Agrawal* [(2014) 1 SCC 603], which established that the Income Tax Act provides a complete machinery for assessment/re-assessment and obtaining relief for improper orders passed by revenue authorities. The court emphasized that the High Court should not entertain a writ petition if an effective alternative remedy is available, except in exceptional cases where there has been a breach of principles of natural justice or other significant procedural irregularities.

2. Alleged Violation of Principles of Natural Justice:
The petitioner contended that the ex parte assessment order dated 05.12.2018 was passed without giving a reasonable opportunity of hearing and to present documentary evidence, thus violating principles of natural justice. The petitioner argued that despite requesting a short adjournment to submit necessary documents, the respondent refused and passed the order ex parte. The court, however, noted that the petitioner had been given sufficient opportunities to furnish details and explanations during the assessment proceedings, which were conducted through an online portal. The court cited the decision in *Sahara India Real Estate Corporation Ltd. Vs. SEBI* [(2013) 1 SCC 1], stating that the principles of natural justice have limitations and can only be availed by a party that has acted fairly.

3. Availability of an Alternative Statutory Remedy:
The court highlighted that the petitioner had an adequate statutory remedy available under Section 264A of the Income Tax Act to challenge the assessment order before the Commissioner of Income Tax (Appeals). The court reiterated the principle that when a statutory forum is available for redressal of grievances, a writ petition should not be entertained. The court decided to relegate the petitioner to avail the alternative remedy by filing a statutory appeal before the competent authority. It was clarified that the appellate authority should not raise technical issues of limitation and must decide the appeal on merits in accordance with the law.

Conclusion:
The court concluded that the writ application was not maintainable due to the availability of an alternative statutory remedy. The application was disposed of, directing the petitioner to file an appeal before the competent authority, which should consider the appeal on merits without raising technical issues of limitation. The court did not express any opinion on the merits of the case, including the alleged violation of principles of natural justice, leaving these issues to be considered by the appellate authority. The interim relief, if any, was vacated, and no order as to costs was made.