2021 (9) TMI 911 - HC - Income Tax

Validity of the final assessment order passed by the respondent u/s 143(3) read with Section 144-B - violation of principles of natural justice - Non providing of adequate opportunity - adjudicate the mixed question of facts and law - maintainability of a Writ Petition - Entertaining a Writ Petition before exhausting the appellate remedy - HELD THAT - The power of judicial review of the High Court under Article 226 of the Constitution of India is to scrutinize the processes through which a decision is taken by the competent authority by following the procedures as contemplated, but not the decision itself - the routine entertainment of a Writ Petition by dispensing with appellate remedy is not preferable and such an exercise would cause injury to the institutional hierarchy and the importance attached to such appellate institutions. The appellate institutions provided under the statute at no circumstances be undermined by the higher Courts. The appellate forums are the final fact finding authorities and more so, possessing expertise in a particular field. Thus, the finding of such appellate forums would be a valuable assistance for the purpose of exercise of judicial review by the High Court under Article 226 of the Constitution of India. The High Court cannot conduct a roving enquiry with reference to the facts and circumstances based on the documents and evidences. Based on the mere affidavits filed by the litigants, the disputed facts cannot be concluded. Thus, the importance of fact finding by the appellate forums is of more value for the purpose of providing complete justice to the parties approaching the Court of law. 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. Petitioner is at liberty to approach the jurisdictional Appellate Authority as contemplated under the Act for the purpose of redressal of his grievances.

Summary

Issues:
Validity of final assessment order under Section 143(3) read with Section 144-B of the Income Tax Act, 1961 - Entitlement to file a writ petition instead of preferring an appeal - Principles of natural justice - Statutory provisions consideration - Adjudication of facts and law by the Appellate Authority - Importance of exhausting appellate remedy before resorting to writ petition - High Court's role in judicial review under Article 226 of the Constitution of India - Exceptional circumstances for entertaining writ proceedings before exhausting appellate remedy - Imminent threat or gross injustice warranting urgent relief - Power of judicial review of the High Court under Article 226 - Avoidance of appellate remedies based on delay or pre-deposits - Liberty to approach jurisdictional Appellate Authority for redressal.

Analysis:

The judgment delivered by the High Court pertains to the validity of a final assessment order under the Income Tax Act, 1961. The petitioner challenged the assessment order through a writ petition, alleging violations of natural justice and failure to consider statutory provisions. The Court emphasized the importance of exhausting the appellate remedy before resorting to a writ petition, highlighting that the Appellate Authority is the final fact-finding authority in cases involving disputed facts. The Court noted that the Appellate Authority, as a quasi-judicial body, is empowered to adjudicate mixed questions of law and facts effectively with reference to original documents and evidence.

The High Court stressed that it cannot adjudicate disputed facts elaborately in writ proceedings, and the findings of the Appellate Authority play a crucial role in the judicial review process under Article 226 of the Constitution of India. The judgment underscored that entertaining a writ petition before exhausting the appellate remedy is an exception rather than the rule, and must be done cautiously, especially in cases where there is an imminent threat or gross injustice warranting urgent relief.

The Court highlighted that the power of judicial review under Article 226 is to scrutinize the decision-making process rather than the decision itself. It cautioned against routinely entertaining writ petitions without exhausting appellate remedies, as it could undermine the institutional hierarchy and the expertise of appellate forums. The judgment also addressed the increasing trend of filing writ petitions to avoid statutory remedies based on delay or pre-deposits, emphasizing the importance of following the prescribed appellate procedures for complete justice.

In conclusion, the Court granted the petitioner liberty to approach the jurisdictional Appellate Authority for redressal of grievances, emphasizing the significance of exhausting statutory remedies before seeking judicial intervention. The writ petition was disposed of with no order as to costs, emphasizing the importance of following the established legal procedures for effective resolution of disputes.