2017 (8) TMI 957 - HC - Income Tax

Alternate remedy - constitutional validity of Section 144C - Held that - Since this is a writ petition directly filed in this Court challenging the order passed by the First Appellate Authority as above and there is a complete remedy of approaching the Income Tax Appellate Tribunal against such an order and which remedy is of appeal, where both question of law and fact can be raised, then, we do not entertain this writ petition. The writ petition is disposed of on the ground of availability of alternate, equally efficacious remedy of an appeal to the Tribunal. However, we clarify that in the event the petitioner still wishes to raise the larger issue of the constitutional validity of Section 144C of the Income Tax Act, 1961, that issue is kept open for being raised at an appropriate stage and in appropriate proceedings.

Summary

Issues:
Challenge to the order of the First Appellate Authority under the Income Tax Act, 1961; Constitutionality and validity of Section 144C of the Income Tax Act.

Analysis:
The judgment addresses a writ petition challenging the order of the First Appellate Authority under the Income Tax Act, 1961. The petitioner's counsel indicated that if the court were to keep open the larger issue of the constitutionality and validity of Section 144C of the Act, the petitioner would file an appeal to the Income Tax Appellate Tribunal within ten days. The court noted that since the petitioner had the remedy of approaching the Tribunal through an appeal where both legal and factual issues could be raised, the writ petition was not entertained. However, the court clarified that if the petitioner still wished to challenge the constitutional validity of Section 144C, that issue could be raised at a later stage in appropriate proceedings.

The judgment highlights the importance of exhausting alternate remedies before approaching the court directly. The court emphasized that the availability of an equally efficacious remedy of appeal to the Tribunal led to the disposal of the writ petition. The petitioner's Senior Counsel's assurance regarding filing an appeal within the specified timeframe was noted, and it was ensured that the Revenue would not take coercive recovery measures until the appeal was lodged and intimated to the Recovery Officer.

Both parties provided undertakings to the court regarding the stay on recovery proceedings until the appeal was filed, indicating a mutual agreement. The court kept open the possibility of addressing all aspects of the matter, including the constitutionality and validity of Section 144C of the Income Tax Act, and concluded the writ petition based on these considerations. The judgment reflects a balanced approach, ensuring the petitioner's right to challenge the constitutional validity of the provision while also upholding the procedural requirements and availability of appropriate remedies under the law.