2021 (7) TMI 226 - HC - Income Tax

Maintainability of Writ Petition - Appeal against original assessment - Writ Petitions tagged together for the purpose of common hearing - petitioner made a submission that the other connected Writ Petitions filed by the sons of the writ petitioner are pending before this Court - HELD THAT - This Court is of the considered opinion that perusal of the order impugned, same was issued under Section 143(3) of the Act with reference to the Assessment Year 2015-16. Admittedly, the order impugned is the original assessment order. Regarding the ground raised, computation of capital gains, the respondent dealt with the merits with reference to the taxes and made a finding, more specifically, in Paragraph Nos. 6, 6.1 and 7 of the assessment order. If at all the petitioner is aggrieved from and out of the finding, it is left open to him to prefer an appeal, as contemplated under the statute. Exhausting the appellate remedy contemplated under the Act is the rule. Dispensing with the appellate remedy is an exception. Only in the event of an imminency, threat or urgency or damages, which cannot be compensated, the High Court may entertain a Writ Petition by dispensing with the appellate remedy. In all other circumstances, exhausting the appellate remedy is of paramount importance for exercise of power of judicial review under Article 226 of the Constitution of India. The point of delay may be an acceptable ground for the purpose of entertaining a Writ Petition. The practise of filing the Writ Petition without exhausting the statutory remedies are in ascending mode and such Writ Petitions are filed with a view to avoid pre-deposits to be made in statutory appeals and on the ground that the appellate remedies are time consuming. The order under challenge in the present Writ Petition is the original assessment order passed under Section 143(3) of the Act, the petitioner is at liberty to prefer an appeal before the appellate authority, namely the Commissioner of Income Tax (Appeals), within a period of three weeks from the date of receipt of a copy of this order. The appellate authorities are the final fact finding authorities. The High Court cannot conduct a roving enquiry with reference to the disputed facts, accounting details with reference to the documents and evidences.

Issues:
Challenge to original assessment order under the Income Tax Act, 1961 for Assessment Year 2015-16.
Connection between the present Writ Petition and other Writ Petitions filed by sons of the petitioner regarding computation of capitals.
Contentions regarding the grounds raised in the other Writ Petitions and their relevance to the original assessment order.
Validity of the original assessment order issued under Section 143(3) of the Act.
Importance of exhausting appellate remedies before seeking judicial review under Article 226 of the Constitution of India.
Role of appellate authorities as final fact-finding bodies and the significance of their findings for judicial review.
Power of judicial review under Article 226 to scrutinize processes, not decisions, taken by competent authorities.
Preferability of exhausting appellate remedies over routine entertainment of Writ Petitions to maintain institutional hierarchy.
Increasing trend of filing Writ Petitions without exhausting statutory remedies, citing delay and time consumption of appellate remedies.
Directions for the petitioner to prefer an appeal before the Commissioner of Income Tax (Appeals) within three weeks from the date of the court order.

Analysis:
The judgment concerns the challenge to an original assessment order under the Income Tax Act, 1961 for the Assessment Year 2015-16. The court noted that the order was appealable under the Act. The petitioner sought to link the present Writ Petition with other Writ Petitions filed by the petitioner's sons regarding computation of capitals. However, the Senior Standing Counsel contended that the issues raised in the sons' Writ Petitions were unrelated to the original assessment order challenged in the present petition. The sons' petitions dealt with search assessment orders under Section 153C of the Act, distinct from the original assessment order. The court emphasized the need for the petitioner to prefer an appeal if aggrieved by the original assessment order's findings.

The court observed that the impugned order was issued under Section 143(3) of the Act for the Assessment Year 2015-16. It highlighted that the appellate remedy under the Act was crucial, except in cases of urgency or irreparable damages. The judgment stressed that appellate authorities were final fact-finding bodies, and the High Court could not conduct a detailed inquiry into disputed facts. The court underscored that the right of appeal was essential for parties to seek redressal of grievances, and appellate findings were valuable for effective judicial review under Article 226 of the Constitution.

Regarding judicial review, the court clarified that it scrutinized the decision-making processes, not the decisions themselves. It cautioned against routinely entertaining Writ Petitions without exhausting appellate remedies, as it could undermine the appellate institutions' importance. The judgment highlighted the growing trend of filing Writ Petitions to bypass statutory remedies due to perceived delays. Ultimately, the court directed the petitioner to appeal before the Commissioner of Income Tax (Appeals) within three weeks from the court order, emphasizing the importance of following the statutory appeal process for proper adjudication.

← Previous Next →