Facts of the Case

The petitioner filed a writ petition before the Delhi High Court challenging the validity of a notice issued under Section 148 of the Income Tax Act, 1961.

During the course of hearing, counsel appearing for the petitioner informed the Court that an assessment order had already been passed pursuant to the impugned notice.

In view of the subsequent assessment order, the controversy shifted from the challenge to the notice itself to the availability of an alternative statutory remedy by way of appeal before the Commissioner of Income Tax (Appeals).

 Issues Involved

  1. Whether the writ petition challenging a notice issued under Section 148 of the Income Tax Act should be entertained after the assessment order has already been passed.
  2. Whether the petitioner should be relegated to the statutory appellate remedy available under the Income Tax Act.
  3. Whether the petitioner could challenge the validity of the notice under Section 148 before the appellate authority while assailing the assessment order.

 Petitioner’s Arguments

  • The petitioner challenged the validity of the notice issued under Section 148 of the Income Tax Act.
  • It was contended that the reassessment proceedings initiated through the impugned notice were not justified in law.
  • After the assessment order was passed, the petitioner sought liberty to pursue available legal remedies against the assessment order and the reassessment proceedings.

 Respondent’s Arguments

  • The respondent opposed the writ petition.
  • It was submitted that once the assessment order had been passed, the petitioner had an effective and efficacious statutory remedy by way of appeal before the Commissioner of Income Tax (Appeals).
  • Therefore, the petitioner should pursue the statutory appellate mechanism provided under the Income Tax Act.

 Court Findings

The Delhi High Court observed that the assessment order had already been passed during the pendency of the writ petition.

The Court held that in such circumstances, it would be appropriate for the petitioner to challenge the assessment order before the Commissioner of Income Tax (Appeals).

The Court further clarified that while filing the appeal, the petitioner would be at liberty to raise the contention that the notice issued under Section 148 was not warranted and was legally unsustainable.

 Court Order

  • The petitioner was granted liberty to challenge the assessment order before the Commissioner of Income Tax (Appeals).
  • The petitioner was also permitted to raise all objections regarding the legality and validity of the notice issued under Section 148 in the appellate proceedings.
  • The writ petition was dismissed as withdrawn with the aforesaid observations. 

Important Clarification

The judgment reiterates the principle that where an assessment order has already been passed and a statutory appellate remedy is available, the High Court may decline to entertain a writ petition and permit the aggrieved party to pursue the appellate remedy.

The Court specifically clarified that dismissal of the writ petition would not prevent the petitioner from challenging the validity of the notice issued under Section 148 before the appellate authority.

Sections Involved

  • Section 148, Income Tax Act, 1961
  • Provisions relating to reassessment proceedings under the Income Tax Act, 1961
  • Appellate remedy before Commissioner of Income Tax (Appeals) [CIT(A)]

Link to download the order - https://delhihighcourt.nic.in/app/case_number_pdf/2009:DHC:8096-DB/AKS14122009CW138112009_170336.pdf

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