Facts of the Case

The petitioner challenged assessment orders passed under Section 153A of the Income Tax Act before the Delhi High Court by filing writ petitions. During the hearing, it was admitted on behalf of the petitioner that an appeal against the same assessment order had already been filed before the Commissioner of Income Tax (Appeals).

The petitioner contended that the assessment order had been passed in undue haste within a period of nine days, without granting sufficient time and opportunity to present the case, thereby violating principles of natural justice. The tax demand raised under the impugned orders was approximately Rs. 18–19 crores.

Issues Involved

  1. Whether a writ petition is maintainable when an alternative statutory remedy has already been invoked by the petitioner?
  2. Whether the assessment order passed under Section 153A can be challenged on the ground of violation of natural justice despite pendency of statutory appeal?
  3. Whether interim protection against coercive recovery should continue pending stay application before the appellate authority?

Petitioner’s Arguments

  • The assessment order passed under Section 153A was legally unsustainable.
  • Adequate opportunity of hearing was not granted.
  • The order was passed within nine days, resulting in denial of fair hearing.
  • The tax demand was substantial and immediate coercive recovery would cause hardship.
  • Interim protection should continue till the appellate forum decides the stay application.

Respondent’s Arguments

  • The writ petitions were not maintainable due to the availability of an effective alternative statutory remedy.
  • The petitioner had already exercised the appellate remedy by filing appeals before the Commissioner of Income Tax (Appeals).
  • All factual and legal contentions could be adjudicated by the appellate authority.
  • The Revenue opposed the petitioner’s allegations regarding denial of adequate opportunity.

Court Findings / Observations

The Delhi High Court held that once the petitioner had already chosen to challenge the assessment orders through the statutory appellate mechanism, simultaneous pursuit of writ jurisdiction against the same order was not permissible.

The Court reiterated the settled principle that writ jurisdiction is ordinarily not exercised where an effective alternate remedy exists, especially when such remedy has already been invoked.

The Court further observed that all objections, including violation of natural justice and insufficiency of opportunity, could be raised before the appellate authority, which was competent to examine them.

Court Order

  • The writ petitions were disposed of.
  • The Court declined to entertain the writ petitions on the ground of availability and invocation of alternative statutory remedy.
  • Interim protection against coercive recovery was extended for five weeks to enable the petitioner to file and pursue a stay application before the appellate authority.
  • Liberty was granted to challenge any adverse order passed on the stay application in accordance with law.

Important Clarification

The High Court expressly clarified that it had not expressed any opinion on the merits of the assessment or the additions made under Section 153A, and all contentions remained open for adjudication before the appellate authority.

Sections Involved

  • Section 153A, Income Tax Act, 1961 (Assessment in case of search or requisition)
  • Appellate remedy under the Income Tax Act
  • Principles of Natural Justice

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

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