Facts of the Case

The petitioner challenged an order passed by the Income-tax Department relating to issuance/refusal of a certificate under Section 197 of the Income-tax Act concerning deduction of tax at source (TDS). The petitioner invoked the writ jurisdiction of the High Court alleging illegality and lack of proper consideration while passing the impugned order.

 Issues Involved

  1. Whether the writ petition under Article 226 is maintainable against an order relating to TDS certificate under Section 197 of the Income-tax Act.
  2. Whether an efficacious alternate statutory remedy is available to the petitioner.
  3. Whether the impugned order suffered from arbitrariness or non-application of mind warranting interference by the High Court. 

Petitioner’s Arguments

  • The impugned order was arbitrary and passed without proper application of mind.
  • The petitioner contended that the statutory framework did not provide an effective appellate or revision remedy against the specific order.
  • Therefore, direct recourse to writ jurisdiction was justified.

Respondent’s Arguments

  • The Revenue argued that the petitioner had an alternate remedy available under the Income-tax Act.
  • It was contended that the High Court should not exercise writ jurisdiction when statutory remedies exist.
  • The impugned order was passed after due consideration in accordance with law. 

Court Order / Findings

  • The High Court held that the writ petition was maintainable in the facts of the case.
  • It observed that no efficacious alternate remedy was available to challenge the specific order.
  • The Court examined the statutory scheme governing revision and concluded that the available mechanism did not adequately cover the impugned order.
  • Consequently, the Court entertained the writ petition and proceeded to adjudicate the matter on merits. 

Important Clarification by the Court

  • Availability of an alternate remedy must be real and effective; a theoretical remedy is not sufficient to bar writ jurisdiction.
  • Where statutory revision or appeal is not applicable or practical, the High Court may exercise powers under Article 226. 

Sections / Provisions Involved

  • Article 226 of the Constitution of India
  • Section 197, Income-tax Act, 1961 (Certificate for lower or nil TDS)
  • Section 264, Income-tax Act, 1961 (Revision by Commissioner)

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/YVA11032024CW146362023_174413.pdf

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