Moti Lal Ramwani V. Union Of India Through The Secretary, Ministry Of Finance, Income Tax Department (Department Of Revenue), North Block, Secretariat Building, New Delhi and Income-Tax Officer Govt. Of India, Ministry Of Finance, Income Tax Department, I T O 2 (1), Aaykar Bhawan, Vyapar Vihar and The National Faceless Assessment Centre Income Tax Department, Ministry Of Finance, New Delhi

WPT/41/2024

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Moti Lal Ramwani filed a writ petition challenging the assessment order dated 27.03.2024 under Section 148 of the Income Tax Act, 1961. The petitioner argued that the assessment was unjust and contravened various provisions of the Act, including Sections 144B and 149(1)(b). The respondents contended that the petitioner had an alternative remedy through an appeal under the Income Tax Act, 1961. The court referenced a similar case, Writ Appeal No. 293/2017, to emphasize that alternative remedies should be exhausted before approaching the High Court under Article 226 of the Constitution of India.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 694217 (HC-CHHATTISGARH)
• Appeal Type: Others
• Pronouncement Date: 07-10-2024
• Assessment Year: misc
• Other Referred Cases: Calcutta Discount Company Limited Versus Income Tax Officer, Companies District I, Calcutta, Income Tax Officer-1 & Ors. Versus Smt. Kamala Ojha, Assistant Commissioner of State Tax & Ors. Versus M/s Commercial Steel Limited, United Bank of India Versus Satyawati Tandon & Ors
• Laws Referred To: Income Tax Act of 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: AJAY KUMARANI
• Assessee Lawyers: N ROY
• Keywords: Alternative remedy; Assessment Order; Mandamus; Quash; Reassessment; Writ petition
• Section: 148; 144B; 148A(d); 149(1)(b); 148A(a)

Judgement Text

"1 / 6 Reserved on :- 09/05/2024 Pronounced on :- 07/10/2024 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPT No. 41 of 2024 Moti Lal Ramwani S/o Shri Nanak Ram Ramwani Aged About 45 Years R/o Ward 3, Station Road Naila, Janjgir Champa, District : Janjgir- Champa, Chhattisgarh ... Petitioner versus 1. Union Of India Through The Secretary, Ministry Of Finanace, Income Tax Department (Department Of Revenue), North Block, Secretariat Building, New Delhi. 2. Income-Tax Officer Govt. Of India, Ministry Of Finance, Income Tax Department, I T O 2 (1), Aaykar Bhawan, Vyapar Vihar 3. The National Faceless Assessment Centre Income Tax Department, Ministry Of Finance, New Delhi. ... Respondents For Petitioner : Mr. N. Naha Roy, Advocate For Respondents : Mr. Ajay Kumarani, Advocate holding brief of Mr. Amit Choudhary, Advocate Hon’ble Shri Justice Sachin Singh Rajput CAV Judgment 1. Facts of the present case which emerge from this writ petition are that initially relief No. 10.1 was claimed by the petitioner, but during pendency of this petition, order/ direction Annexure P/10 dated 27.03.2024 was issued, therefore by virtue of an amendment, relief No. 10.1 (a) was sought for by the petitioner herein. Relief No. 10.1(a) is 2 / 6 reproduced herein below:- “10.1(A) Issue an appropriate writ in the nature of mandamus and quash the assessment order dated 27.03.2024 (Annexure P/10) passed in proceedings under Section 148 of the Act of 1961.” 2. Learned counsel for the petitioner submits that the decision of respondent No. 2 to proceed with the petitioner's case under Section 148A(d) of the Act of 1961 is unjust and in contravention of Section 144B of the Act of 1961. He further submits that the respondents failed to appreciate the explanation given by the petitioner in his reply to the notice under Section 148A(a) of the Act of 1961. He also submits that the proceedings initiated by the authorities were bad in law, as Section 149(1)(b) of the Act of 1961 mandates that no notice under Section 148 shall be issued for the relevant Assessment Year if three years but not more than ten years have elapsed from the end of the relevant Assessment Year. He argues that the petitioner had regularly deposited cash in his bank accounts and withdrew cash from bank accounts, and the maximum credit in bank accounts was Rs. 19,51,524.00 mm 27.05.2015. He further argues that the total cash deposit was Rs. 50,14,000.00, and the petitioner disclosed Rs. 18,18,600.00 as his business receipts in computation of income in his reply during proceedings under Section 148A of the Act of 1961. He also argues that the respondents were unjustified in passing the assessment order dated 27.03.2024, despite the subject of reassessment under the provisions of Section 148A read with 148 of the Act of 1961 remaining pending adjudication before the court. He has placed reliance on the judgment rendered by the hon’ble Supreme Court in the matter of Calcutta Discount Company Limited Versus Income Tax Officer, 3 / 6 Companies District I, Calcutta reported in LAWS (SC) 1960 11 18. 3. On the other hand, learned counsel appearing on behalf of respondents opposes. He submits that petitioner has an alternative remedy to avail an appeal under the provisions of Income Tax Act, 1961, therefore, instead of agitating the grounds in this writ petition, petitioner may be directed to file a duly constituted appeal according to the provisions of the Act, 1961. He has placed reliance on the judgment rendered by the Division Bench of High Court of Chhattisgarh passed in Writ Appeal No. 293/2017, parties being Income Tax Officer-1 & Ors. Versus Smt. Kamala Ojha dated 25.06.2019 wherein identical issue arose therein and the learned Court held that petitioner has an alternative remedy to file appeal and liberty to was granted in favor of petitioner therein to file appeal. 4. I have heard learned counsel for the parties and perused the documents placed on record with utmost circumspection. 5. The main issue relates to maintainability of this writ petition and whether this Court should entertain this petition despite there being alternative remedy or direct the petitioner to approach the competent authority as per Section 246 of Act, 1961. This Court, is of the considered view that the issued involved in the present case is squarely covered by the judgment passed by the Division Bench in the Writ Appeal No. 293/2017. The judgment passed in Writ Appeal was also assailed before the Apex Court vide SLP Diary No. 38102/2019 and same was dismissed and the judgment passed Division Bench has been affirmed. This Court in Writ Appeal No. 293 of 2017 in paragraph 33 observed as under:- “33. To sum up the matter, when there existed reason to 4 / 6 belief which is formed on the basis of material available having nexus with the subject, writ Court ought not to have entertained the writ petition more so when assessment orders have already been passed during pendency of the writ petition, therefore, we set aside the order passed by the writ Court and relegate the writ petitioner to prefer an appeal against the reassessment order which may be filed within a period of 30 days from today. The writ petitioner would be at liberty to raise all grounds both factual and legal in the said appeal. The appellate authority shall entertain the appeal for decision on merits without raising objection as to limitation.” 6. Of course, despite there being alternative remedy, this Court can entertain this writ petition. Some case laws which are relevant for the purpose of just adjudication of this case are described herein below. 7. In the case of Assistant Commissioner of State Tax & Ors. Versus M/s Commercial Steel Limited reported in 2021 7 SCR 660 Apex Court has observed that respondents therein had a statutory remedy under Section 107 of CGST Act. Relevant paras are reproduced herein below:- 12. In the present case, none of the above exceptions was established. There was, in fact, no violation of the principles of natural justice since a notice was served on the person in charge of the conveyance. In this backdrop, it was not appropriate for the High Court to entertain a writ petition. The assessment of facts would have to be carried out by the appellate authority. As a matter of fact, the High Court has while doing this exercise proceeded on the basis of surmises. However, since we are inclined to relegate the respondent to the pursuit of the alternate statutory remedy under Section 107, this Court makes no observation on the merits of the case of the respondent. 13. For the above reasons, we allow the appeal and set aside the impugned order of the High Court. The writ petition filed by the respondent shall stand dismissed. However, this shall not preclude the respondent from taking recourse to appropriate remedies which are available in terms of Section 107 of the CGST Act to pursue the grievance in regard to the action which has 5 / 6 been adopted by the state in the present case. 8. It has been further observed that existence of an alternative remedy is not a absolute bar to the maintainability of the writ petition under Article 226 of Constitution of India but the writ petition can be entertained in an exceptional circumstance where there is violation of fundamental right and principle of natural justice or excess of jurisdiction or for the challenge to be virus of the statute or deliberate legislation. 9. In the case of United Bank of India Versus Satyawati Tandon & Ors reported in (2010) 8 SCC 110, Apex Court in para 43, 44 and 45 held as under:- 43. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person ind that this rule apother greater rigour in matters involvingd person and taxes, cess, fees, other types of public money and the dues of banks and other Hinancial institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc. the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of uns grievance of any aggrieved person. Therefore, in all such cases, the High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute. 44. While expressing the aforesaid view, we are conscious that the powers conferred upon the High Court under Article 226 of the Constitution to issue to any person or authority, including in appropriate cases, any Government, directions, orders or writs including the five prerogative writs for the enforcement of any of the rights conferred by Part III or for any other purpose are very wide and there is no express limitation on exercise of that power but, at the same time, we cannot be oblivious of the rules of self- imposed restraint evolved by this Court, which every High Court is bound to keep in view while exercising power under Article 226 of the 6 / 6 Constitution. 45. It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective alternative remedy by filing application, appeal, revision, etc. and the particular legislation contains a detailed mechanism for redressal of his grievance. 10. The question is not about the maintainability of writ petition under Article 226 of Constitution of India but about the maintainability of writ petition against the order of assessment bypassing the statutory alternative remedy. 11. The arguments which have been advanced by the learned counsel for the petitioner are very well to him while filing for statutory appellate remedy. Therefore, looking to the facts and circumstances of the case and the the arguments advanced hereinabove, this Court, at this stage, is not inclined to entertain this petition. However, this Court is inclined to grant liberty to petitioner to file appeal before the concerned appellate authority according to the provisions of Act, 1961 within 30 days from the date of receipt of copy of this order and the same shall be decided by the appellate authority in accordance with law within reasonable period of time without raising objection to limitation. 12. With the aforesaid observation(s) and direction(s), present writ petition stands disposed of. Sd/- (SACHIN SINGH RAJPUT) JUDGE ABHIGYA "