Facts of the Case

The petitioner challenged assessment orders passed under Section 153A of the Income Tax Act, 1961 before the High Court through writ petitions. Simultaneously, it was admitted before the Court that the petitioner had already filed statutory appeals against the same assessment orders before the Commissioner of Income Tax (Appeals).

The petitioner argued that the assessment proceedings were completed within an unusually short period of nine days, thereby depriving her of adequate opportunity and violating principles of natural justice.

A tax demand of approximately ₹18–19 crores had been raised pursuant to the impugned assessment orders, and interim protection against coercive recovery had earlier been granted by the Court.

Issues Involved

  1. Whether a writ petition under Article 226 of the Constitution is maintainable against an assessment order passed under Section 153A when the statutory appellate remedy has already been invoked?
  2. Whether alleged violation of principles of natural justice in assessment proceedings justifies bypassing the alternate statutory remedy?
  3. Whether interim protection from coercive tax recovery should continue pending appellate proceedings?

Petitioner’s Arguments

  • The petitioner contended that the assessment order under Section 153A was legally unsustainable.
  • It was argued that sufficient opportunity of hearing was not granted.
  • The assessment proceedings were concluded within nine days, which amounted to procedural unfairness and breach of natural justice.
  • Considering the huge tax demand, coercive recovery would cause serious prejudice.

Respondent’s Arguments

  • The Revenue opposed the writ petitions and defended the assessment proceedings.
  • It was contended that the petitioner had already availed the statutory remedy of appeal.
  • Therefore, writ jurisdiction should not be invoked parallelly against the same order.
  • All legal and factual objections could appropriately be raised before the appellate authority.

Court Findings / Court Order

The Delhi High Court held that once the petitioner had already preferred statutory appeals against the assessment orders under Section 153A, parallel writ proceedings challenging the same orders were not maintainable.

The Court reiterated the settled principle that writ jurisdiction ordinarily should not be exercised where an effective alternative statutory remedy exists, particularly when such remedy has already been invoked.

The Court clarified that all contentions, including violation of natural justice and merits of additions, could be agitated before the appellate authority.

Accordingly, the writ petitions were disposed of without expressing any opinion on merits. The interim stay against coercive action was directed to continue for five weeks to enable the petitioner to seek stay before the appellate authority.

Important Clarification

The Court expressly clarified that dismissal/disposal of the writ petitions was solely on the ground of availability and invocation of alternate statutory remedy and not on the merits of the assessment itself. The appellate authority remained free to independently adjudicate all issues raised by the petitioner.

Sections Involved

  • Section 153A, Income Tax Act, 1961 (Assessment in case of search or requisition)
  • Article 226, Constitution of India (Writ Jurisdiction)
  • Principles of Natural Justice
  • Statutory Appellate Remedy under Income Tax Law

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2018:DHC:9138-DB/SKN21022018CW6462017_170706.pdf

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