2021 (9) TMI 1275 - HC - Income Tax

Rights of the writ petitioner to prefer an appeal against the impugned Assessment Order i.e., appeal under Section 246A - Statutory appeal - Alternate remedy - Point on Section 80B of IT Act was not raised before the Assessing Officer - HELD THAT - There is no pre-deposit condition and the statutory appeal is under Section 246A of IT Act. This Court is informed that Appellate Authority is CIT(A), Coimbatore. This Court is also informed that there is no cap qua 'Condonation of Delay' ('COD') with regard to filing of the appeal and it is at the discretion of the Appellate Authority. The most important and significant aspect of the matter even according to the impugned order is, a show-cause notice dated 04.03.2021 has been sent to the writ petitioner /assessee and writ petitioner has not sent any reply or explanation. Owing to this, the respondent has concluded that the Assessee has no objection qua addition/disallowance made in the draft Assessment Order. That point that is being canvassed turns on Section 80B of IT Act was not raised before the Assessing Officer though an opportunity was given to the writ petitioner and writ petitioner did not avail the same. In this view of the matter, nothing prevents the writ petitioner from raising this very point in an appeal. The right of the writ petitioner to raise this point before the Appellate Authority is preserved. This Court has repeatedly held that alternate remedy, though not a absolute rule i.e., a rule of discretion and self imposed restraint qua writ court has to be applied strictly when it comes to fiscal statutes as long as exceptions such as NJP violation are not attracted. Captioned writ petition is, therefore, disposed of holding that the rights of the writ petitioner to prefer an appeal against the impugned Assessment Order i.e., appeal under Section 246A of IT Act to Commissioner of Income Tax (Appeals), Coimbatore, Appellate Authority raising all points available to the writ petitioner including the points raised in the instant writ petition are preserved. If there is any delay in preferring the appeal, it is open to the writ petitioner to seek COD and if such an COD prayer is made, Appellate Authority shall decide the same on its own merits and in accordance with law.

Summary

Issues:
1. Challenge to Assessment Order under Section 80B of the Income-tax Act, 1961.
2. Availability of alternate remedy under Section 246A of the IT Act.
3. Application of the principle of exhausting statutory remedies before seeking relief under Article 226 of the Constitution.

Analysis:
1. The main issue in this case pertains to a challenge against an Assessment Order dated 12.03.2021 under Section 80B of the Income-tax Act, 1961. The petitioner sought deduction under Section 80B, claiming that the income collected from borrowers should be disbursed to depositors. However, the court refrained from delving into factual aspects due to the availability of a statutory appeal under Section 246A of the IT Act. The court emphasized that the petitioner can raise the Section 80B point in the appeal before the Appellate Authority, preserving the right to do so.

2. The court highlighted the importance of exhausting alternate remedies available under the law, especially in fiscal statutes. It cited various case laws, including Dunlop India and K.C.Mathew, emphasizing that the principle of exhausting statutory remedies before seeking relief under Article 226 of the Constitution should be strictly followed. The court reiterated that the writ court's interference should be limited, particularly in matters involving recovery of public dues or fiscal issues, and that statutory remedies must be exhausted before approaching the court.

3. Referring to a previous case where a similar view was upheld by a Division Bench, the court affirmed that the rule of seeking alternate remedies before the Appellate Authority in fiscal statutes is a well-established practice. Consequently, the court disposed of the writ petition, allowing the petitioner to prefer an appeal against the Assessment Order under Section 246A of the IT Act. The court also mentioned that if there is a delay in filing the appeal, the petitioner can request Condonation of Delay, which the Appellate Authority will decide based on merits and in accordance with the law.

In conclusion, the judgment underscores the significance of exhausting statutory remedies before seeking judicial intervention, particularly in matters concerning fiscal statutes. It upholds the principle that alternate remedies should be pursued before approaching the court under Article 226 of the Constitution, ensuring a structured and lawful process in resolving tax-related disputes.