Facts of the Case

The petitioner challenged assessment orders passed under Section 153A of the Income Tax Act, 1961 before the Delhi High Court by way of writ petitions. The grievance raised was that the assessment orders were passed without granting sufficient time and adequate opportunity to present the case, thereby violating principles of natural justice. It was contended that the assessment was completed within a short span of nine days.

However, during the proceedings, it was admitted that the petitioner had already preferred an appeal before the Commissioner of Income Tax (Appeals) against the same assessment orders under Section 153A.

The tax demand raised against the petitioner was approximately ₹18–19 crores, and the petitioner submitted inability to pay the demand.

Issues Involved

  1. Whether a writ petition under Article 226 is maintainable when the petitioner has already availed an alternative statutory appellate remedy?
  2. Whether the assessment order under Section 153A could be challenged directly in writ jurisdiction on grounds of violation of natural justice?
  3. Whether interim protection from coercive recovery should continue pending the appellate proceedings?

Petitioner’s Arguments

  • The petitioner argued that the assessment order under Section 153A was legally unsustainable.
  • It was contended that sufficient opportunity of hearing was not granted.
  • The petitioner submitted that the order was passed hastily within nine days.
  • It was argued that such hurried adjudication amounted to violation of principles of natural justice.
  • The petitioner also highlighted financial hardship due to the huge tax demand raised.

Respondent’s Arguments

  • The Revenue opposed the writ petitions and contested the allegations raised by the petitioner.
  • It was submitted that the petitioner had already invoked the statutory appellate remedy against the same order.
  • Therefore, writ jurisdiction should not be exercised where an effective alternate remedy exists.

Court Findings / Court Order

The Delhi High Court held that:

  • Once the petitioner had already filed an appeal against the assessment order under Section 153A, the petitioner could not simultaneously pursue writ proceedings challenging the same order.
  • A litigant cannot be permitted to avail two parallel remedies against the same cause.
  • The appellate authority is competent to examine all issues, including allegations relating to denial of adequate opportunity and natural justice violations.
  • Ordinarily, writ petitions are not entertained where effective alternative statutory remedies are available and have already been exercised.

Accordingly, the writ petitions were disposed of and the Court declined to exercise writ jurisdiction.

Important Clarification by the Court

The Court expressly clarified that:

  • It had not expressed any opinion on the merits of the additions made in the assessment order.
  • The petitioner was free to pursue appellate remedies.
  • The interim protection against coercive recovery was extended for five weeks to enable the petitioner to seek stay before the appellate authority.

Sections Involved

  • Section 153A, Income Tax Act, 1961 – Assessment in case of search or requisition
  • Appellate Remedies under the Income Tax Act, 1961
  • Principles of Natural Justice
  • Article 226 of the Constitution of India – Writ Jurisdiction of High Courts

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

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.