Facts of the Case

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

The petitioner contended that the assessment orders were passed hurriedly within nine days without granting sufficient opportunity, thereby violating principles of natural justice. The tax demand raised under the impugned orders was approximately ₹18–19 crores. Earlier, the Court had granted interim protection restraining coercive recovery measures.

Issues Involved

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

Petitioner’s Arguments

  • The assessment order passed under Section 153A was legally unsustainable.
  • Adequate and effective opportunity of hearing was not granted.
  • The assessment was finalized within an unreasonably short period of nine days.
  • Such hurried assessment violated principles of natural justice.
  • The tax demand was substantial and immediate recovery would cause severe hardship.

Respondent’s Arguments

  • The petitioner had already exercised the statutory appellate remedy.
  • Once appeal was filed, writ jurisdiction should not be invoked simultaneously against the same order.
  • All factual and legal contentions could be raised before the appellate authority.
  • The Revenue contested the allegations regarding denial of fair opportunity.

Court Findings / Observations

The Delhi High Court observed that where an effective alternative statutory remedy exists and has already been invoked, writ jurisdiction ordinarily should not be exercised.

The Court held that the petitioner could not be permitted to pursue parallel remedies challenging the same assessment order.

The Court clarified that all grounds, including violation of natural justice and lack of fair hearing, could be raised before the Commissioner of Income Tax (Appeals), who was competent to adjudicate upon them.

The Court emphasized that merits of the additions were matters suitable for appellate examination rather than writ adjudication.

Court Order

  • The writ petitions were disposed of.
  • The Court declined to entertain the writ petitions.
  • Interim protection against coercive recovery was extended for five weeks.
  • Liberty was granted to the petitioner to seek stay before the appellate authority.
  • If aggrieved by any stay-related order, the petitioner was granted liberty to challenge it in accordance with law.

Important Clarification

The High Court expressly clarified that it had not expressed any opinion on the merits of the assessment order or additions made therein, and all issues remained open before the appellate authority.

This judgment reinforces the settled principle that writ jurisdiction is discretionary and generally not invoked where statutory remedies are available and already pursued.

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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