2023 (3) TMI 925 - HC - Income Tax

Maintainability of the present Writ Petitions - Assessment u//s 153A OR 153C - notice under Section 127 of the Act has not been issued to the petitioners - availability of an alternate /statutory appellate remedy u/s 246A - HELD THAT - The Writ Petitions have been filed on the premise that the notice under Section 127 of the Act has not been issued to the petitioners, however in the Written Submissions the above submission has not been made. Section 127 of the Income Tax Act would apply only to those cases where there is transfer of a case from one jurisdiction to other and not a transfer of jurisdiction of the assesseee from one place to the other, as in the present case. Question whether notice ought to be issued under section 153A or 153C question as to whether the assessments are made on the basis of the search pursuant to a warrant issued in the name of the petitioner or on the basis of a search pursuant to a warrant issued in the name of any other entity is essentially a question of fact. Submission that the petitioner was not served with notices is misconceived inasmuch as the Writ Petitioner/Assessee is a company incorporated under the Companies Act and is just a juristic person and thus the averments which are completely personal and which are on the basis of alleged family disputes cannot have a bearing as to whether the petitioner have been properly served or otherwise This Court is not inclined to entertain this writ petitions as the question raised would require examination of disputed question of facts which is alien to the writ jurisdiction under Article 226 of the Constitution of India more so when there is an effective alternative remedy. The rule of alternate remedy no doubt is a self imposed restraint by Courts exercising writ jurisdiction. In other words, rule of alternate remedy is not a rule of compulsion, but it is a rule of discretion. See judgment of Hon'ble Supreme Court in Authorized Officer, State Bank of Travancore and Another vs Mathew K.C, 2018 (2) TMI 25 - SUPREME COURT This Court has no hesitation in holding that alternate remedy though a rule of discretion and not a rule of compulsion, has to be applied with utmost rigour when it comes to fiscal law statutes and this Court is not inclined to entertain these writ petitions. Therefore these Writ Petitions stands dismissed.

Summary

Issues:
Challenging assessment orders under different Assessment Years, invoking Section 153C instead of Section 153A, compliance with Section 127 procedure, service of notices under Income Tax Act.

Analysis:
1. Challenging Assessment Orders: The Writ Petitions challenge assessment orders for various Assessment Years primarily on the ground that Section 153C of the Income Tax Act was invoked instead of Section 153A. The petitioner, a Company part of a group, faced assessment proceedings due to incriminating materials seized during a search, leading to additions in income tax liability for specific years.

2. Compliance with Section 127: The petitioner argued that the procedure under Section 127 of the Act was not followed, rendering further proceedings void-abinitio. However, the court found this debatable as the petitioner's jurisdiction was shifted, not transferred, and the applicability of Section 127 in this context was questionable.

3. Service of Notices: The issue of proper service of notices under the Income Tax Act was raised. The Respondent contended that notices were validly issued under Section 153C based on materials seized during searches of related entities within the group, justifying their actions and challenging the petitioner's claim for Section 153A applicability.

4. Maintainability of Writ Petitions: The court considered the maintainability of the Writ Petitions in light of the arguments presented. It noted discrepancies in the submissions regarding notice issuance and jurisdiction transfer. The court emphasized that the determination of whether Section 153A or 153C should apply depended on factual considerations, making it unsuitable for writ jurisdiction.

5. Alternate Remedies: Citing the availability of statutory appellate remedies under Section 246A of the Income Tax Act, the court found the Writ Petitions not maintainable. It referred to precedents emphasizing the rule of alternate remedy, especially in fiscal law matters, and dismissed the petitions while directing the Appellate Authority to hear any appeals filed without influence from the court's observations.

In conclusion, the court dismissed the Writ Petitions due to the presence of alternate remedies, emphasizing the rule of alternate remedy in fiscal law matters. The judgment highlighted the need for factual examinations unsuitable for writ jurisdiction and directed the Appellate Authority to proceed with any appeals filed, independent of the court's observations.