1969 (12) TMI 3 - SC - Income Tax

Improper service of notice - Where the party feeling aggrieved by an order of an authority under the IT Act has an adequate alternative remedy which he may resort to against the improper action of the authority and he does not avail himself of that remedy the High Court will require a strong case to be made out for entertaining a petition for a writ - Assessee s appeal is dismissed

Summary

Issues:
1. Validity of the notice served under section 33B of the Income-tax Act.
2. Adequacy of opportunity given to the assessee to contest the notice.
3. Jurisdiction of the High Court to entertain a petition challenging the order of a taxing authority.

Analysis:
The judgment delivered by Justice Shah addressed the case of an appellant who was assessed to pay tax for the years 1953-54 to 1960-61 by the Income-tax Officer. The Commissioner of Income-tax issued a notice under section 33B of the Income-tax Act, 1922, requiring the appellant to show cause why the assessment orders should not be revised. The notice was sent to three different addresses of the appellant, and a date for hearing was fixed. The appellant was not present on the hearing date, leading the Commissioner to set aside the order and direct fresh assessments. The appellant did not appeal to the Income-tax Appellate Tribunal but moved a petition in the High Court, alleging violation of natural justice and express provisions of the law by the Commissioner.

Regarding the validity of the notice served, the High Court held that the notice addressed to one of the appellant's addresses was properly served by affixing it at his place of business. The appellant contended that he did not have sufficient opportunity to contest the notice, as the hearing was fixed on a specific date, and he could not appear. However, the court noted that the appellant did not attempt to contact the Commissioner for more time or appeal to the Tribunal for a proper hearing. The court found that the order under section 33B was properly passed, emphasizing that the Income-tax Act provides a comprehensive mechanism for challenging departmental actions, which the appellant failed to utilize.

Lastly, the judgment discussed the jurisdiction of the High Court to entertain a petition challenging a taxing authority's order. It highlighted that a writ of certiorari is discretionary and may not be issued if the aggrieved party has an alternative remedy available but does not utilize it. The court emphasized that in cases where there is an alternative remedy, the High Court would be reluctant to entertain a petition challenging an order of a taxing authority unless there are strong grounds, such as jurisdictional errors or fundamental rights infringements. In this case, the court found that the jurisdiction of the High Court could not be invoked, leading to the dismissal of the appeal with costs. The judgment underscored the importance of utilizing the available legal remedies before approaching the High Court directly.