NIKESHKUMAR BHUPENDRABHAI SHAH V. UNION OF INDIA

SCA/15309/2019

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NIKESHKUMAR BHUPENDRABHAI SHAH filed a writ application under Article 226 of the Constitution of India, challenging a penalty order of Rs.22,22,328 imposed by the Income Tax Officer, Surat, for the assessment year 2016-17. The penalty was based on an ex parte assessment order which added Rs.71,92,000 under Section 68 of the Income Tax Act, 1961. The High Court, referencing the case of Commissioner of Income Tax & Ors. Vs. Chhabil Dass Agrawal, held that the writ application was not maintainable due to the availability of a statutory remedy and thus relegated the applicant to pursue the matter through the appellate authority under the Income Tax Act.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 802455 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 03-03-2021
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax & Ors. Vs. Chhabil Dass Agrawal [(2014) 1 SCC 603]
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: KALPANAK RAVAL
• Assessee Lawyers: MANAN SHAH
• Keywords: Appeal; Assessment Order; Ex-parte; Income Tax Officer; Penalty; Scrutiny assessment; Statutory remedy; Writ application
• Section: 144; 271(1)(c); 68

Judgement Text

"C/SCA/15309/2019 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 15309 of 2019 ========================================================= NIKESHKUMAR BHUPENDRABHAI SHAH Versus UNION OF INDIA ========================================================== Appearance: MR MANAN A SHAH(5412) for the Petitioner(s) No. 1 MRS KALPANAK RAVAL(1046) for the Respondent(s) No. 1,2 NOTICE SERVED BY DS(5) for the Respondent(s) No. 3 ========================================================== CORAM: HONOURABLE MR. JUSTICE J.B.PARDIWALA and HONOURABLE MR. JUSTICE ILESH J. VORA Date : 03/03/2021 ORAL ORDER (PER : HONOURABLE MR. JUSTICE ILESH J. VORA) 1. By filing this writ application under Article 226 of the Constitution of India, the writ applicant has prayed for the following substantial relief:- “(A) Issue appropriate writ, order or direction, quashing and setting aside the order dated 28.06.2019 passed by the respondent No.3 as being illegal, arbitrary and suffering from vices of malafies and bad in law, in the interest of justice; 2. The writ applicant seeks to challenge the order dated 28.06.2019 passed by the respondent No.3 – Income Tax Officer, Surat, purportedly made under Section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act' for short) for the A.Y. 2016-17, whereby, the writ applicant is directed to pay, by way of penalty, a sum of Rs.22,22,328/- in respect of the assessment year 2016-17. It is an undisputed fact that, the case of the writ Page 1 of 3 C/SCA/15309/2019 ORDER applicant was taken up for scrutiny assessment and final assessment order under Section 144 of the Act was passed by the respondent authorities ex parte on 05.12.2018, assessing the total income at Rs.96,16,300/- by making addition of Rs.71,92,000/- under Section 68 of the Act. The revenue had also initiated the penalty proceedings under Section 271 (1)(c) of the Act and after giving an opportunity of being heard and considering the reply of the writ applicant, the penalty order also came to be passed. 3. The writ applicant instead of filing a statutory appeal as provided under Section 264A of the Act, has directly approached this Court by invoking the writ jurisdiction under Article 226 of the Constitution of India. 4. We have heard Mr. Dhaval Shah, the learned Counsel assisted by Mr. Manan Shah, the learned counsel appearing for the writ applicant and Mrs. Kalpana K. Raval, the learned Senior Standing Counsel appearing for the respondents - Revenue. 5. The writ applicant has also challenged the final assessment order dated 05.12.2018 by way of the Special Civil Application No.19013/2018, wherein, after considering the law laid down in the case of Commissioner of Income Tax & Ors. Vs. Chhabil Dass Agrawal [(2014) 1 SCC 603] and facts and circumstances of the case, this Court has taken a view that the writ application ought not to be entertained when there is an efficacious statutory remedy available to the writ applicant and accordingly, the writ applicant is relegated to avail the remedy of appeal before the appellate authority under the provisions of the Income Tax Act. Page 2 of 3 C/SCA/15309/2019 ORDER Here in this case also, the penalty proceedings on the basis of the assessment order being made final and it is being challenged directly before this Court without availing the alternative efficacious remedy as provided under the Income Tax Act, 1961. Therefore, we decline to entertain this writ application as no case is made out to interfere with the impugned order, with a liberty to the writ applicant to file an appeal before the competent authority. If the appeal is filed, the appellate authority shall not raise the technical issue of limitation and decide the same on merits, in accordance with law. However, it is made clear that, we have not expressed any opinion on merits on the case including the issue of principles of natural justice as raised by the writ applicant. 6. In view of the above, the writ application is disposed of in the aforesaid terms. Interim relief, if any, stands vacated. There shall be no order as to costs. (J. B. PARDIWALA, J) (ILESH J. VORA,J) SUCHIT Page 3 of 3 "