2019 (12) TMI 864 - HC - Income Tax

Alternative remedy of appeal under the Act - HELD THAT - This Court is of the considered view that it would be appropriate to relegate the petitioner to file an alternative and efficacious statutory remedy of appeal available under the Act since the disputed questions of facts and law involved herein cannot be adjudicated in the writ proceedings. Indeed, reasonable opportunity was provided to the petitioner to putforth his case. If the petitioner is aggrieved by the decision of the Assessing Officer, hierarchy of authorities provided under the Act are required to adjudicate upon the said issue. Without expressing any opinion on the merits or demerits of the case, the petitioner is relegated to file the alternative remedy of appeal under the Act. If such an appeal is preferred within a period of two weeks from the date of receipt of certified copy of the order, the same shall be considered by the Appellate Authority on merits without objecting to the aspect of limitation. All rights and contentions of the parties are left open. The Appellate Authority shall decide the matter in accordance with law in an expedite manner.

Summary

Issues:
Assessment order under Section 143(3) of the Income Tax Act, 1961 for the assessment year 2015-16 challenged. Allegation of violation of principles of natural justice by the respondent. Availability of alternative statutory remedy of appeal under the Act.

Analysis:
The petitioner challenged the assessment order passed by the respondent under Section 143(3) of the Income Tax Act, 1961, for the assessment year 2015-16, along with the consequential notice of demand issued under Section 156 of the Act. The petitioner, an individual, had sold equity shares and claimed exemption under Section 10(38) of the Act for long term capital gains. The Income Tax Department scrutinized cases of individuals claiming such exemptions, including the petitioner's case. The petitioner contended that the respondent hastily concluded the assessment without providing essential investigation reports and sworn statements, violating principles of natural justice.

The respondent argued that the investigation background was only to aid assessment proceedings, and all relevant materials were shared with the petitioner for a proper response. The respondent maintained that the order was passed after considering the petitioner's submissions and that an alternative statutory remedy of appeal was available under the Act. The Court acknowledged the disputed questions of facts and law involved, stating that such matters could not be resolved in writ proceedings. The Court directed the petitioner to pursue the alternative remedy of appeal provided under the Act, emphasizing that the petitioner had been given a reasonable opportunity to present their case.

The Court, without expressing any opinion on the case's merits, instructed the petitioner to file an appeal within two weeks from receiving the order's copy. The Appellate Authority was directed to consider the appeal on its merits without raising objections regarding the limitation period. The Court disposed of the writ petition, leaving all rights and contentions of the parties open, and instructed the Appellate Authority to expedite the decision in accordance with the law.