AKASH JAIN V. ASSI. COMMISSIONER OF INCOME TAX and ANR

CW/6448/2014

AI Insights

The case involves Akash Jain, the petitioner, who filed a writ petition challenging a notice issued under Sections 147/148 of the Income Tax Act, 1961, by the Assistant Commissioner of Income Tax. During the pendency of the writ petition, an assessment order was passed, creating demands against the petitioner. The petitioner sought to amend the writ petition to challenge this assessment order and requested a stay on the demand. The respondents contended that the writ petition was not maintainable as an effective alternative remedy was available through an appeal. The court referenced the Supreme Court's decision in Chhabil Dass Agarwal, emphasizing that the existence of an alternative statutory remedy precludes the entertainment of a writ petition under Article 226 of the Constitution.

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 769694 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 25-05-2015
• Assessment Year: misc
• Other Referred Cases: CIT vs. Chhabil Dass Agarwal : 357 ITR 357 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: SANJAY NAHAR; K K BISSA
• Assessee Lawyers: DINESH MEHTA
• Keywords: Alternative remedy; Assessment Order; Jurisdiction; Notice Challenge; Stay Application; Writ petition
• Section: 147; 148

Judgement Text

"1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR : O R D E R : S.B. CIVIL WRIT PETITION NO.6448/2014 Akash Jain V/s. Assistant Commissioner of Income Tax & Anr. Date of Order ::25.5.2015 PRESENT HON'BLE MR. JUSTICE ARUN BHANSALI Mr. Dinesh Mehta )for the petitioner/s. Mr. Sanjay Nahar ) Mr. K.K. Bissa, for the respondent/s. ----- BY THE COURT: This matter comes up on second stay application filed by the petitioner. The petitioner filed writ petition challenging the notice dated 3.3.2014 (Annex.4) issued by the respondent No.1 under Sections 147/148 of the Income Tax Act, 1961 ('the Act'). Notices of the writ petition were issued. However, no interim order was passed by this Court. During the pendency of the writ petition, in view of the fact that the proceedings pursuant to the notice under Section 148 of the Act were getting time barred, the respondents have passed assessment order dated 30.3.2015, whereby demands have been created against the petitioner. 2 An application seeking amendment in the writ petition has been filed by the petitioner inter-alia seeking to challenge the assessment order dated 30.3.2015 passed during the pendency of the writ petition and stay of demand has been sought in the second stay petition. A reply to the application seeking amendment in the writ petition as well as reply to the second stay application has been filed by the respondents. It is inter-alia contended on behalf of the respondents that as the petitioner has alternative remedy by way of appeal as the assessment order has been passed by the respondents on 30.3.2015, the present writ petition is not maintainable. Reliance has been placed on judgment of the Hon'ble Supreme Court in the case of CIT vs. Chhabil Dass Agarwal : 357 ITR 357 (SC). It is submitted by learned counsel for the petitioner that as the order of assessment has been passed during the pendency of the writ petition and the notice (Annex.4) issued by the respondents is absolutely without jurisdiction, which has led to passing of the assessment order, the petitioner is entitled to question the assessment order in the present writ petition, against which initially the challenge was laid by the petitioner in the writ petition and therefore, the application seeking amendment may be allowed and the order of assessment dated 30.3.2015 passed by the respondents be stayed during the 3 pendency of the writ petition. I have considered the submissions made by learned counsel for the parties and have perused the material available on record. It is no doubt true that the assessment order dated 30.3.2015 has been passed by the respondents during the pendency of the present writ petition. However, it is equally true that in case, the order was not passed, the same would have led to the proceedings becoming time barred as there was no interim order passed in the writ petition staying further proceedings pursuant to the notice Annex.-4. Once a order of assessment has been passed by the respondents in the above circumstances, the plea raised by learned counsel for the respondents that as now the petitioner has effective alternative remedy by way of appeal before the Commissioner (Appeals), wherein besides the assessment order it is open for the petitioner to question the legality and validity of notice under Section 147/148 of the Act, the petitioner needs to approach the appellate authority under the provisions of the Act, assumes significance. The Hon'ble Supreme Court in the case of Chhabil Dass Agarwal (supra), while considering a similar issue has opined as under :- “19. Thus, while it can be said that this Court has recognized some exceptions to the rule of alternative remedy, i.e., where the statutory authority has not acted in accordance with the provisions of the enactment in question, or in defiance of the 4 fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of the principles of natural justice, the proposition laid down in Thansingh Nathmal v. Supdt. of Taxes AIR 1964 SC 1419, Titaghur Paper Mills Co. Ltd. Case (supra) and other similar judgments that the High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field. Therefore, when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation. 20. In the instant case, the Act provides complete machinery for the assessment /re-assessment of tax, imposition of penalty and for obtaining relief in respect of any improper orders passed by the Revenue Authorities, and the assessee could not be permitted to abandon that machinery and to invoke the jurisdiction of the High Court under Article 226 of the Constitution when he had adequate remedy open to him by an appeal to the Commissioner of Income Tax (Appeals). The remedy under the statute, however, must be effective and not a mere formality with no substantial relief. In Ram & Shyam Co. v. State of Haryana [1985] 3 SCC 267 this Court has noticed that if an appeal is from “Caesar to Caesar's wife” the existence of alternative remedy would be a mirage and an exercise in futility. In the instant case, neither has the assessee-writ petitioner described the available alternative remedy under the Act as ineffectual and non-efficacious while invoking the writ jurisdiction of the High Court nor has the High Court ascribed cogent and satisfactory reasons to have exercised its jurisdiction in the facts of instant case. 21. In light of the same, we are of the considered opinion that the Writ Court ought not to have entertained the Writ Petition filed by the assessee, wherein he has only questioned the correctness or otherwise of the notices issued under Section 148 of the Act, the re-assessment orders passed and the consequential demand notices issued thereon.” In view of the principles laid down by the Hon'ble Supreme Court in the case of Chhabil Dass Agarwal (supra), the application / petition filed by the petitioner cannot be entertained on account of availability of effective alternative remedy. 5 The petitioner may approach the appellate authority within a period of 15 days. In case, the petitioner files appeal within a period of 15 days alongwith application seeking condonation of delay,the appellate authority shall consider the application seeking condonation of delay sympathetically keeping in view the fact that the petition remained pending before this Court even after the petitioner approached this Court by way of amendment on 28.4.2015 i.e. within the original limitation available to the petitioner. Learned counsel for the petitioner submits that the judgment in the case of Chhabil Dass Agarwal (supra) was passed in circumstances where the writ petition was filed against the notice under Section 148 as well as the assessment order and therefore, the judgment is not applicable. In view of the fact that post amendment the petitioner would be seeking to question the notice under Section 148 as well as assessment order, it cannot be said that the judgment in the case of Chhabil Dass Agarwal is not applicable to the facts of the present case. In view of the above discussion, the application seeking amendment in the writ petition, the second stay application and the writ petition filed by the petitioner are dismissed. No costs. (ARUN BHANSALI), J. rm/35 "