Facts of the Case

The petitioner filed a writ petition challenging the order dated 11 March 2020 passed by the Commissioner of Income Tax under Sections 147 read with 144 of the Income Tax Act, 1961.

The Commissioner had dismissed the petitioner’s appeal against a demand notice dated 17 July 2019 for the Assessment Year 2007–2008 on the ground of limitation.

Alternatively, the petitioner sought a direction for fresh adjudication of the matter on merits.

During the pendency of the writ petition, the petitioner also filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging the same order.

Issues Involved

  1. Whether dismissal of the appeal by the Commissioner of Income Tax on the ground of limitation was justified.
  2. Whether the petitioner was entitled to a fresh adjudication on merits.
  3. What is the effect of subsequent relief granted by the ITAT on the pending writ petition.

Petitioner’s Arguments

  • The petitioner challenged the dismissal order as being unjustified on limitation grounds.
  • Sought adjudication on merits of the appeal concerning the demand notice for AY 2007–2008.
  • Requested the High Court to direct the Commissioner to decide the matter afresh.

Respondent’s Arguments

  • The respondent submitted that the petitioner had already filed an appeal before the ITAT against the same impugned order.
  • It was pointed out that the ITAT had allowed the appeal on 23 June 2021.
  • The ITAT restored the matter to the Assessing Officer with directions to issue notice to all legal heirs and decide the case afresh after providing proper opportunity of hearing.

Court’s Findings / Order

  • The Delhi High Court noted that the ITAT had already granted relief to the petitioner by restoring the matter to the Assessing Officer.
  • It was further observed that no one appeared on behalf of the petitioner during hearings.
  • In view of the relief already granted by the ITAT, the writ petition no longer survived for adjudication.
  • Accordingly, the writ petition was disposed of as satisfied.

Important Clarification

  • Once substantive relief is granted by the ITAT, parallel writ proceedings challenging the same issue become infructuous.
  • The High Court will not adjudicate matters that have already been resolved by a competent appellate authority.
  • Restoration of assessment proceedings by ITAT ensures compliance with principles of natural justice, including hearing of legal heirs where applicable.

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2021:DHC:2560-DB/MMH23082021CW66702020_133333.pdf

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