2023 (10) TMI 466 - HC - Income Tax

Faceless assessment - Exception for entertaining the writ petition despite availability of alternate efficacious remedy - Petitioner seeking time again and again for uploading written submissions and documentary evidence in support thereof - as per DR petitioner was granted enough opportunity to upload his written submissions and documentary evidences in support first notice Exhibit P-4 dated 20.07.2023 issued providing time to the petitioner till 31.07.2023 for furnishing the written submissions and documentary evidence, which he failed and on last date i.e. on 31.07.2023 he made a request for fifteen days further time for furnishing written submissions and supporting documentary evidence. The petitioner did not upload the documents and written submissions even within the time asked by him and in fact the time has extended till 18.08.2023 HELD THAT - Considering the ratio laid down by the Supreme Court in the aforesaid Judgment of MS Radha Krishan Industries 2021 (4) TMI 837 - SUPREME COURT regarding the exception for entertaining the writ petition despite availability of alternate efficacious remedy, we are of view that the case of the petitioner does not fall within the exceptions carve out for entertaining the writ petition despite availability of alternative remedy. ITAT can examine all the evidence which may not have been produced before the assessing authority or the appellate authority and also would consider all the submissions which may not have been taken before the appellate authority or the assessing authority to decide the second appeal u/s 253 of the Income Tax Act. The question regarding the Income Tax Appellate Tribunal being not efficacious forum for deciding appeals is also not called for inasmuch as the provisions of Section 253 is not in challenge before this Court. Thus dispose of this writ petition with a direction to the petitioner to file an appeal before the ITAT against the impugned order within a period of one month from today and the petitioner may take all the grounds which are available to him and produce all evidence in support thereof. ITAT shall consider the documents and grounds of the petitioner while disposing of the appeal in accordance with law expeditiously. Petitioner may also file an application for the stay of the demand in pursuance to the assessment order and the appellate authority shall consider the same expeditiously. If the petitioner deposits 20% of the assessed tax, the stay application shall be decided within a period of one month from the date of filing of the appeal and stay application.

Summary

Issues involved:
The judgment deals with the issues of violation of principles of natural justice in the context of a writ petition filed under Article 226 of the Constitution of India challenging an order on appeal under Section 250 of the Income Tax Act. The primary issue is whether the appellate authority's decision to pass an order without granting further time for submission of written statements and documentary evidence constitutes a violation of natural justice principles.

Summary of Judgment:

Issue 1: Opportunity for submission of evidence
The petitioner filed a writ petition challenging the order passed by the appellate authority without granting sufficient time for submission of written submissions and documentary evidence. The petitioner requested multiple extensions for filing evidence, but the appellate authority proceeded to pass the order without granting the requested time. The court held that the petitioner had been given ample opportunity to submit evidence, and failure to do so does not amount to a violation of natural justice principles. The court referred to the Supreme Court judgment in M/S. Radha Krishan Industries Vs State of Himachal Pradesh to emphasize that the availability of an alternate remedy does not bar the High Court from entertaining a writ petition in cases involving a violation of natural justice or fundamental rights.

Issue 2: Availability of alternate remedy
The respondents argued that the petitioner had been granted sufficient opportunities to submit evidence and that the remedy of appeal before the Income Tax Appellate Tribunal under Section 253 was available to the petitioner. The court agreed with the respondents and held that the petitioner could raise all grounds and produce all documents in the second appeal before the Tribunal. The court emphasized that the appellate authority had passed the order on merits and had not summarily dismissed the appeal, indicating that the High Court should not entertain the writ petition and should direct the petitioner to pursue the alternate remedy before the Tribunal.

Conclusion:
In conclusion, the court disposed of the writ petition and directed the petitioner to file an appeal before the Income Tax Appellate Tribunal within one month. The petitioner was instructed to include all available grounds and evidence in the appeal, which the Tribunal would consider while disposing of the case. Additionally, the petitioner could file an application for a stay of the demand, and the Tribunal was directed to decide on the stay application within one month of filing the appeal and stay application.

This judgment clarifies the importance of availing opportunities to submit evidence in legal proceedings and highlights the significance of following the prescribed procedures for appeals under the Income Tax Act.