2009 (12) TMI 228 - HC - Income Tax

Right of assessee- on a writ petition by the assessee raising questions under article 265 and 300A of the Constitution of India, relating to the right of the assessee to be taxed on net income and not on the gross income. Held that- dismissing the petition, that no particulars having been stated in the petition by the assessee the petition deserved to be dismissed on this ground alone. The order passed by the Tribunal, partly allowing the appeal of the assessee against the order of the Commissioner (Appeals) in respect of the assessment year 1988-89 was appealable under section 260A of the Act. where a statute creates a right or liability and also prescribes the remedy or procedure for the enforcement of that right or liability, resort must be had to that statutory remedy rather than invoking the extraordinary and prerogative writ jurisdiction of the High Court under article 226 of Constitution of India.

Summary

Issues Involved:
Challenge to order of Income Tax Appellate Tribunal dated 17th September, 1990 and rectification orders dated 24th February, 2006 and 15th September, 2006. Jurisdiction of High Court under Article 226 of the Constitution of India. Right to be taxed on net income. Availability of alternative remedies under the Income Tax Act, 1961.

Analysis:

1. The judgment highlights the importance of clearly stating all material facts, infringed rights, grounds for relief, and nature of relief sought in a petition under Article 226 of the Constitution of India. The petition in question lacked necessary facts and particulars, leading to its dismissal on this ground alone.

2. The challenge in the writ petition was directed towards the order of the Income Tax Appellate Tribunal dated 17th September, 1990, and the subsequent rectification orders of 24th February, 2006, and 15th September, 2006. The petitioner sought to raise questions under Articles 265 and 300A of the Constitution related to the right to be taxed on net income rather than gross income.

3. The judgment emphasized that in taxing matters, the High Court should not act as an original or appellate authority under Article 226. The petitioner was advised to resort to the alternative remedies provided under the Income Tax Act for assessment and relief regarding improper orders by tax authorities.

4. Referring to the precedent set by the Supreme Court, the judgment reiterated that when a statute creates a right or liability and prescribes a remedy for enforcement, the statutory remedy should be pursued instead of invoking the High Court's jurisdiction under Article 226. This principle holds particularly true for matters arising from the taxing statute.

5. Citing the case of Titaghur Dhar Paper Mills Company Limited vs. State of Orissa, the judgment emphasized that orders of assessment should be challenged through the mechanism provided by the Income Tax Act, rather than through a petition under Article 226 of the Constitution.

6. Ultimately, the petition was dismissed as the petitioners had an equally efficacious alternative remedy available through an appeal, as provided under the Income Tax Act, 1961.