Each State has a High Court. High Courts have been granted powers to issue writs. The Writ is an order or process issued by court or judicial Officers, asking person to perform or refrain from performing any act. Article 226 grants powers to High Courts to issue writs not only in respect of fundamental rights but for any other pose. This is a very powerful right and is very useful in case Government or other authorities do not give justice to a person. Application made to High Court for this pose is called writ petition. Since this power is given under Constitution, this cannot be limited by any Statute (Act) or Government rules.

Writ Petitions are constitutional remedies and are generally filed by the assessee. Exceptionally, they can be filed by the Department against the order passed by the ITAT. Writs are generally filed when there is no other legal remedy available with the petitioner.

In appropriate cases, where there is no effective alternate remedy, a writ can be filed under Article 226 of the Constitution of India before the High Court. A writ can also be filed under Article 32 of the Constitution before the Supreme Court.

Powers conferred by Article 226

The powers conferred by Article 226 are very wide. The objective of providing basic safeguards to the people is to ensure that the rule of law prevails. There are only two limitations for exercising the powers under article 226:

§  Power is to be exercised 'throughout the territories in relation to which it exercises jurisdiction,' i.e., the writ issued by the Court cannot run beyond the territories subject to its jurisdiction.

§  Person or the authority on which the High Court is empowered to issue writs ‘must be within those territories,’ i.e., those persons or authorities must be within its jurisdiction, either by residence or location within those territories.

In case of Income-tax related disputes, wherein alternate remedy in terms of a statutory forum is created by the Income-tax Act for redressal of grievance, does the moot question that arises is whether the High Court has powers to entertain writ petition by ignoring this remedy ?

Under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this court not to operate as a bar in at least three contingencies, namely, where the Writ Petition has been filed for the enforcement of any of the Fundamental rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged.

Scope, Powers and Difference between Article 226 and Article 227

The Hon’ble Supreme Court, in the case of Surya Devi Rai v. Ram Chander Rai (2003) 6 SCC 675, relied on several constitutions Judgments of the Hon’ble Apex court, one of which was Umaji Keshao Meshram and Ors. v. Smt. Radhikabai and Anr  1986 AIR 1272, 1986 SCR (1) 731 (1986) Supp. SCC 401, which laid down scope, power and differences between Article 226 and Article 227.

The first and foremost difference between the two articles is that Proceedings under Article 226 are in exercise of the original jurisdiction of the High Court while proceedings under Article 227 of the Constitution are not original but only supervisory. Article 227 substantially reproduces the provisions of Section 107 of the Government of India Act, 1915, excepting that the power of superintendence has been extended by this Article to tribunals as well. Though the power is akin to that of an ordinary court of appeal, yet the power under Article 227 is intended to be used sparingly and only in appropriate cases for the purpose of keeping the subordinate courts and tribunals within the bounds of their authority and not for correcting mere errors.

The court further observed that power under Article 227 shall be exercised only in cases occasioning grave injustice or failure of justice such as when:

(i)      The court or tribunal has assumed a jurisdiction which it does not have,

(ii)     The court or tribunal has failed to exercise a jurisdiction which it does have, such failure occasioning a failure of justice, and

(iii)   The jurisdiction though available is being exercised in a manner which tantamount to overstepping the limits of jurisdiction.

The Hon'ble Court in case of Surya Devi rai v. Ram Chander Rai, further observed that there is lack of knowledge of the distinction between the understanding of Article 226 and 227 and hence it is a common custom with the lawyers labeling their petitions as one common under Articles 226 and 227 of the Constitution, though such practice has been deprecated in some judicial pronouncements.

After reeling on the catena of decisions of the apex court, the Hon'ble Supreme Court in Surya Devi Rai v. Ram Chander Rai  laid down the following differences:

(i)     Firstly, the writ of certiorari is an exercise of its original jurisdiction (Article 226) by the High Court; exercise of supervisory jurisdiction (Article 227) is not an original jurisdiction and in this regard, it is akin to appellate revisional or corrective jurisdiction.

(ii)    Secondly, in a writ of certiorari, the record of the proceedings having been certified and sent up by the inferior court or tribunal to the High Court, the High Court if inclined to exercise its jurisdiction, may simply annul or quash the proceedings and then do no more (Article 226). In exercise of supervisory jurisdiction (Article 227) the High Court may not only quash or set aside the impugned proceedings, judgment or order but it may also make such directions as the facts and circumstances of the case may warrant, may be by way of guiding the inferior court or tribunal as to the manner in which it would now proceed further or afresh as commended to or guided by the High Court. In appropriate cases the High Court, while exercising supervisory jurisdiction, may substitute the impugned decision with a decision of its own, as the inferior court or tribunal should have made.

(iii)  The jurisdiction under Article 226 of the Constitution is capable of being exercised on a prayer made by or on behalf of the party aggrieved but the power conferred under Article 227 viz the supervisory jurisdiction is capable of being exercised suo moto as well.

The court concluded that under Article 226 of the Constitution, writ is issued for correcting gross errors of jurisdiction, i.e., when a subordinate court is found to have acted:

(i)    without jurisdiction, by assuming jurisdiction where there exists none, or

(ii)   in excess of its jurisdiction – by overstepping or crossing the limits of jurisdiction, or

(iii)  acting in flagrant disregard of law or the rules of procedure or acting in violation of principles of natural justice where there is no procedure specified, and thereby occasioning failure of justice.

Supervisory jurisdiction under Article 227 of the Constitution is exercised for keeping the subordinate courts within the bounds of their jurisdiction. When the subordinate court has assumed a jurisdiction which it does not have, or has failed to exercise a jurisdiction which it does have, or the jurisdiction though available is being exercised by the court in a manner not permitted by law, and failure of justice or grave injustice has occasioned thereby, the High Court may step in to exercise its supervisory jurisdiction.

The Hon’ble Supreme Court, through this judgment, brought all the subordinate Judicial bodies under the ambit of Article 226 of the Constitution of India, curtailing the alternate remedy of Appeal available to the aggrieved, which directly or indirectly made no difference in the powers of Article 226 and 227 of the Constitution of India.

Text of Article 226 of The Constitution of India 1950

226. Power of High Courts to issue certain writs

(1) Notwithstanding anything in Article 32 every High Court shall have powers, throughout the territories in relation to which it exercise jurisdiction, to issue to any person or authority, including in appropriate cases, any Government, within those territories directions, orders or writs, including writs in the nature of habeas corpus, mandamus, prohibitions, quo warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by Part III and for any other purpose

(2) The power conferred by clause (1) to issue directions, orders or writs to any Government, authority or person may also be exercised by any High Court exercising jurisdiction in relation to the territories within which the cause of action, wholly or in part, arises for the exercise of such power, notwithstanding that the seat of such Government or authority or the residence of such person is not within those territories

(3) Where any party against whom an interim order, whether by way of injunction or stay or in any other manner, is made on, or in any proceedings relating to, a petition under clause (1), without

(a) furnishing to such party copies of such petition and all documents in support of the plea for such interim order; and

(b) giving such party an opportunity of being heard,

makes an application to the High Court for the vacation of such order and furnishes a copy of such application to the party in whose favour such order has been made or the counsel of such party, the High Court shall dispose of the application within a period of two weeks from the date on which it is received or from the date on which the copy of such application is so furnished, whichever is later, or where the High Court is closed on the last day of that period, before the expiry of the next day afterwards on which the High Court is open; and if the application is not so disposed of, the interim order shall, on the expiry of that period, or, as the case may be, the expiry of the aid next day, stand vacated

(4) The power conferred on a High Court by this article shall not be in derogation of the power conferred on the Supreme court by clause (2) of Article 32

Kinds of Writ

Following type of Writs which may be issued :

(i) Habeas Corpus

This writ will be issued for securing the liberty of a person where such liberty is wrongly taken away.

It consists in a command from the Court of the production of the person detained, whether in prison or in private custody. If the Court finds no legal justification for his detention, it orders the release of that person. The writ may be refused where there is an adequate alternative remedy.

Under Articles 32 and 226, any person may move for the writ in the Supreme Court or High Courts respectively. It is a writ in the nature of an order calling upon the person who has detained another to produce later before the Court, in order to let the Court know on what ground he/she has been confined and to set him/her free if there is no legal jurisdiction for the detention.—State of Bihar v. Kameshwar Prasad Verma AIR 1965 SC 575.

Under Article 226, a petition for Habeas Corpus would lie not only when a person is detained by the State but also when he is detained by another private individual, but no petition under Article 32 would lie in the latter case. Article 32 does not apply unless a ‘fundamental right’ has been infringed.—Vidhya Verma v Shivnarain Verma AIR 1956 SC 108

(ii) Quo Warranto

This writ will be issued against public servant or officer, who is alleged by the petitioner to be holding his office illegally, to show the materials or furnish information to establish the fact that he actually has a claim to that office.

Under the Constitution, the Supreme Court has power to issue a writ of quo warrranto for the enforcement of fundamental rights. Similarly even High Courts also empowered to issue each such writ under Article 226 of the Constitution for the enforcement of fundamental rights by any public authority. For example banning use of any public facility by Municipal Corporation.

(iii) Prohibition

It is a judicial writ issuing out of a superior Court and directed to an inferior Court preventing the inferior Court from usurping jurisdiction with which it is not legally vested. That is this writ issues to compel Courts entrusted with judicial duties to keep them within the limits of their jurisdiction. Thus, prohibition lies only against judicial and quasi-judicial authorities.

When a court or a tribunal acts without or in excess of jurisdiction, or in violation of rules of natural justice, or acts under a law which is ultra vires, or acts mala fide having a personal interest in the cause, a writ of prohibition can be prayed. In other words, to compel Courts/ tribunal with judicial duties to keep within their jurisdiction or to prevent them from violating the rules of natural justice.—Govinda Menon S. v. Union of India AIR 1967 SC 1274

While certiorari quashes after trial, prohibition is generally before the trial in a clear case apparent on the face of the proceedings where the tribunal was acting without jurisdiction.—Hari Vishnu Kamath v. Syed Ahmad Ishaque AIR 1955 SC 233.

(iv) Certiorari

This writ may be issued calling for the records of proceedings from an inferior Court or Tribunal or quasi-judicial authorities to the Superior Court for determining the legality of the proceedings contained therein, or for giving full or more satisfactory effect to them than could be done by the Court below. It is meant to ensure control over the action of an inferior Court so that it may not exceed its jurisdiction.It also compels the observance of the rules of natural justice.

Under Article 226 of Constitution of India, all High Courts are empowered to issue the writ of Certiorari throughout their territorial jurisdiction when a subordinate judicial or quasi-judicial authority acts: (1) without or in excess of jurisdiction or (2) in contravention of the rules of natural justice, or (3) commits an error apparent on the face of the record. The Supreme Court is empowered to issue a Writ under Article 32. In rarest of rare cases, to prevent abuse of process of court and to cure miscarriage , the Supreme Court in the exercise of its inherent jurisdiction may entertain a “Curative Petition” even after the dismissal of review petition “ ex debito justice”

(v) Mandamus

The writ of mandamus is a command issued to direct any person, corporation, inferior court, or Government requiring him to do a particular thing therein specified which pertains to his or their office and is further in the nature of a public duty. The Constittution, under Articles 32 and 226 empowers the Supreme Court and all High Courts to issue a writ of mandamus to appropriate authorities.

Against individual writ – cannot be issued against an individual

It was held that Mandamus cannot be issued by the Court, as it is settled that a writ will go only against the statutory authority or State within the meaning of Article 12 and not against an individual. Thus the writ petition is misconceived.—[Abdul Wahid & Anr. v. Union of India & Ors. (1990) 185 ITR 583 (All.)]

No Court can issue a mandate to a legislature to enact a particular law. Similarly no Court can direct a subordinate legislative body to enact or not to enact a law which it may be competent.—[Narinder Chand Hem Raj v. Lt. Governor (1972) 29 STC 169 (SC)]

Writ under Article 226 of Constitution of India could be available not only against an authority or Government but also against a private person obligated to perform a public duty.—[Goverdhan v. Rani L. College 1983 AP125-7; Anant v. State 1986 MP 149]

Circumstances where a writ can be filed

In the following cases, the writs may be considered—

(a) If the order complained of is without jurisdiction or in excess of jurisdiction, or

(b) If the order complained of is perverse, or

(c) If the order complained of is causing manifest injustice, or

(d) If the order complained of is arbitrary, or unfair.

• In practical, the re-assessments, tax recovery notices, unjust orders in search cases, order of special audit under section 142(2A) have been subject-matters of writs. Where notice issued by the Income Tax authority is not valid, writ may be filed.

Writ is an extraordinary remedy permitted under Article 226 of the Constitution. It can be entertained only when the petition invoking such jurisdiction challenges an action of an authority claiming it to be so arbitrary as to be an infringement of a fundamental right or where it was lacking in jurisdiction.

Jurisdiction of writ

Writ jurisdiction lies in the place, where cause of action arises. Where the assessee assessed at Calcutta was denied relief on a waiver petition filed before the CBDT at Delhi. The High Court found that merely because the power of waiver rested with the CBDT, cause of action does not arise at Delhi. The petition to the Board was in respect of an order passed by DDIT (International Taxation), so that it was held that jurisdiction could rightly lie only with the Calcutta High Court, so that the writ petition before the Delhi High Court was not maintainable. It was also not a forum convenient for adjudication as urged by the petitioner. The petition was, therefore, dismissed reserving liberty for the writ petitioner to seek appropriate redressal from a Competent Court. —[ABN Amro Bank N.V. v. CBDT (2006) 285 ITR 52 (Delhi)]

The High Court within whose jurisdiction a part of the cause of action arose is competent to entertain the writ and grant relief to the assessee. —[Modi Charitable Fund Society v. ITO (1983) 142 ITR 818 (All.)]

Writ Petition in relation to Tax matter

A writ petition can be filed under Article 226 of the Constitution before a High Court or under Article 32 of the Constitution before the Supreme Court. As per Article 226 of Constitution of India, every High Court can issue any direction or order or writ to enforce for enforcement of rights which are in the nature of fundamental rights. The court while exercising the ‘WRIT’ jurisdiction will not act as appellate authority, but just act as an authority to correct the error of Law or fact. The High Court in its extra-ordinary jurisdiction cannot entertain a petition either for specific performance of contract or for damages.

Writ : Available only for exceptional cases

Writ is an extra-ordinary remedy permitted under Article 226 of the Constitution. It can be entertained only when the petition invoking such jurisdiction challenges an action of an authority claiming it to be so arbitrary as to be an infringement of a fundamental right or where it was lacking in jurisdiction.

Where the writ petition itself is bereft of necessary facts and particulars in a matter, where the assessee having failed in the appeal and having again failed in a rectification petition with another rectification petition also dismissed, a writ cannot lie challenging the order of the Tribunal as arbitrary. It was pointed out that the statute provided for a remedy, by way of appeal, which should have been exercised, if the assessee had been aggrieved. Where the statute itself provided for a remedy, the occasion for invoking the exercise of extra ordinary jurisdiction cannot be lightly inferred as pointed out in Titaghur Dhar Paper Mills Company Limited v. State of Orissa (1993) 142 ITR 663 (SC) and followed in this case in Rahulijee and Company (P) Ltd. v. ITAT (2010) 323 ITR 327 (Delhi).

No permission to pursue to parallel remedies in respect of the same matter at the same time

It was held that the appellant therein having filed a suit in which the same question as the subject-matter in the writ petition was agitated could not be permitted to pursue to parallel remedies in respect of the same matter at the same time.—[Jai Singh v. Union of India & Ors. (1977) 1 SCC 1 (SC)]

The petitioner therein had filed a writ petition during the pendency of the appeal before the statutory authority. The Hon’ble Apex Court held that such a writ was not maintainable.—[Bombay Metropolitan Region Development Authority v. Gokak Patel Volkart Ltd. & Ors. (1995) 1 SCC 642 (SC)]

Ordinarily, where the parties have more than one remedy available, they have to elect or select one of the remedies. In case, if the party is allowed to select multiple remedies in multiple forum and Courts, there will obviously be multiplicity of litigation that the judgments and/or orders may also be conflicting with each other.

It is more than settled that when more than one remedy is available to a party in respect of the same grievance, it is open for that party to elect or to choose his remedy. But once he chooses his remedy, all incidents attached to that remedy must follow.

It is clear from the above exposition of law that public policy demands that a person has right to choose the forum for redressal of his grievance, but he cannot be permitted to choose two forums in respect of the same subject matter for the same relief.

When alternate remedy available—Writ petition not maintainable

Generally the writ petition shall not be allowed when the petitioner has an alternative remedy provided in the respective Act by way of filing of an appeal against the order of quasi-judicial authority. Petitioner shall not use writ jurisdiction as to bypass the appeal machinery created under particular statute. In such situation Writ court will direct the petitioner to file an appeal before appellate forum by granting the additional time.

Standard Operating Procedure (SOP) for handling writ petitions [CBDT F. No. N.A.F.A.C-1/58/2021-22/333 Date: 26.07.2021]

Subject :- Standard Operating Procedure (SOP) for handling writ petitions where assessment is made under the Faceless Assessment Scheme 2019 (FAS’ 19)/section 144B of the IT Act, 1961(the Act) and or penalty is passed under Faceless Penalty Scheme, 2021, where NaFAC/CBDT is one of the respondents - Regarding

The Central Board of Direct Taxes (CBDT)has issued detailed guidelines for the implementation of FAS 2019 F. No. 173/165/2020-ITA-I dated 14.08,2020 which inter-alia mandate that the field formations of jurisdictional charges outside the National Faceless Assessment Centre (NaFAC)/ Regional Faceless Assessment Centers (ReFACs) hierarchy shall perform the judicial functions including defending writ petitions.

2. The FAS 2019 has been incorporated into the Act vide the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 as section 144B of the Act with effect from 01.04.2021. In pursuance to the said amendment, the CBDT had passed order u/s 119 of the Act dated 31.03.2021 enabling all orders, circulars, instructions, guidelines and communications issued in order to implement the Scheme henceforth mutatis mutandis be applicable to the Faceless Assessment u/s 144B of the Act. Hence, in pursuance of the above two administrative directions, all judicial functions including defending writ petitions shall be performed by the jurisdictional Income tax Authorities, considering the original jurisdiction lies with the Jurisdictional Assessing Officer (JAO) with concurrent jurisdiction being vested in the NaFAC under sub-section (5) of section 120 of the Act for the limited purpose of assessment.

3. It is being observed that NaFAC is one of the respondents in most of the writs, because all orders under FAS 2019 or u/s 144B of the Act are issued from NaFAC. As such NaFAC has no primary role in defending the writ except in case where the scheme itself is challenged or a wider policy issue is involved. Hence, for this purpose, in each such case, the NaFAC shall authorize the Pr. CIT(Jurisdictional) as the authority to defend the case before the Hon’ble High Courts.

Further, the CBDT lays down the following SOP on the above subject for clarity and step-by-step guide on the matter:-

(A) SOP for PCIT jurisdictional Charge being Nodal Coordinating Authority for defending writ petitions arising from the assessment/penalty proceedings pending before NaFAC:

PCIT (Jurisdictional) has to handle the writ petition matters with assistance from office of the Pr. CCIT, CIT (Judicial) of the Region and PCIT (ReFAC) (AU) concerned. In such situation, inputs and parawise comments shall be provided by PCIT (ReFAC) (AU) as the case records during the pendency of proceedings before NaFAC will not be visible to the POT (Jurisdictional). In such cases:-

1. Information about filing of a WP before the Jurisdictional High Court shall be forwarded by CIT (Judicial) or PM (Jurisdictional) to CIT (NaFAC)-3, New Delhi as soon as possible and without any delay and on identification, the writ petition will be referred to the PCIT (ReFAC)(AU) concerned.

2. On receipt of the information from concerned Pr. CCIT (Jurisdictional)/High Court Cell/Website of the High Court/ any other source, the CIT (NaFAC)-3, New Delhi would request ITBA for identification of the PCIT (ReFAC) (AU) involved immediately without any delay and on identification, the writ petition will be referred to PCIT(ReFAC)(AU) concerned.

3. The PCIT (ReFAC) (AU) shall examine the Writ Petition in the context of facts of the case and applicable law. The PCIT (ReFAC) (AU) can view all the case records including case history noting through the status monitor.

4. The PCIT (ReFAC) (AU) shall examine the petition of the petitioner and record parawise comments with reference to the issues involved in the writ petition and cross verify it with the information available on record for the case on ITBA. On any technical issue/process, if required, the PCIT (ReFAC) (AU) may seek clarification/information from CIT ITBA.

5. Parawise comments so received from PCIT (ReFAC) (AU) shall be forwarded to the PCIT(Jurisdictional) and office of Pr. CCIT with the request to take necessary measures to defend the case before the Hon’ble High Court.

6. The POT (ReFAC) (AU) would make a reference for seeking specific comments to the NaFAC in the following circumstances: Any provision related to FAS 2019 or section 144B of the Act is challenged in the writ or during the course of arguments. Specific inputs are required on any policy issue. Such reference to NaFAC for comments shall be in the prescribed format as per Annexure-A and should include parawise comments of the PCIT (Jurisdictional) /PCIT (ReFAC) (AU) on the writ petition supported with necessary documents such as writ petition, assessment order, case history noting etc.

7. Reference to NaFAC on specific policy issues and on specific provisions of FAS, 2019/section 144B of the Act challenged, shall be made in exceptional circumstances requiring specific advice on policy matters and not on the issues related to facts of the case. This should ideally be done within 5 days of receipt of the Writ petition in the 0/o PCIT (Jurisdictional) or immediately if the writ is coming up earlier.

The practice of seeking general comments/directions from NaFAC must be avoided.

8. The PCIT (Jurisdictional) shall be authorized by NaFAC to defend the case, give directions regarding the arguments and decide on the stand to be taken before Hon’ble Higher courts. The parawise comments/inputs/instructions to counsel (if required) shall be provided by PCIT (ReFAC) (AU) to PCIT (Jurisdictional) in such cases.

9. Till the utility for communication between PCIT (Jurisdictional) and PCIT (ReFAC) (AU) is made functional, the coordination between both the officers shall be done through office of CIT (NaFAC)-3, New Delhi. E-mail ids of the officers of CIT (3), NaFAC are given at the end of this SOP.

(B) SOP for PCIT (Jurisdictional) Charge being Nodal Coordinating Authority for defending writ petitions arising from the assessment /penalty orders completed by NaFAC:

1. On receipt of the Writ Petition, the PCIT (Jurisdictional) shall examine the Writ Petition in the context of facts of the case and applicable law. The JAO can view all the case records including ‘case history notings’ through the status monitor and furnish its comments considering all the facts and legal issues involved.

2. The POT(Jurisdictional) shall examine the petition of the taxpayer and record parawise comments with reference to the issue involved in the writ petition and cross verify it with the information for the case available on record in ITBA. On any technical issue/process, if required, the PCIT (Jurisdictional) may seek clarification/information from CIT ITBA.

3. If the facts so warrant, the PCIT (Jurisdictional) may seek the comments of the PCIT (ReFAC) (AU) under whose Jurisdiction the assessment order had been passed. The PCIT (Jurisdictional) shall record reasons in writing and make reference for unmasking of the AU concerned to the NaFAC (on email with a copy marked to Addl.CIT-3(1) NaFAC) & DCIT 3(2)(2) NaFAC). After unmasking, the PCIT (Jurisdictional) and PCIT (ReFAC) (AU) may coordinate amongst themselves through email/faceless communication facility in ITBA as and when available.

4. The PCIT (Jurisdictional) will make reference for seeking specific comments to the NaFAC in the following circumstance:

i.     Any provision related to FAS 2019 or section 144B of the Act or FPS, 2021 is challenged in the writ or during the course of arguments.

ii.   Specific inputs are required on any policy issue.

Such references to NaFAC are to be handled in the same manner as mentioned in para (A)(6). These references to NaFAC on specific policy issues and on specific provisions of Faceless Assessment Scheme, 2019 or section 14413 of the Act or FPS 2021, challenged shall be in exceptional circumstances requiring specific advice on policy matters and not on the issues related to facts of the case. This action should ideally be done within 5 days of receipt of the writ in the 0/o PCIT (Jurisdictional) or immediately if the writ is coming up earlier.

Again, the practice of seeking general comments/directions from NaFAC is to be avoided.

5. A number of writs have been filed because of apparent violation of principles of natural justice. In many such cases, the High Courts have set aside the cases back to the file of the Assessing Officer for giving a fresh opportunity and for taking into consideration the submissions of the assesse. When such an order is received in any case, the PCIT (Jurisdictional) will direct the JAO to immediately create a set aside proceedings in ITBA. After creating of the proceedings, the ITBA may be requested to reallocate the case to FAO.

6. In case of unfavorable order of Hon’ble High Court, the decision on filing of appeal or stay application before division bench if the order is of single bench or filing of SLP or otherwise shall be taken by the Pr. CIT (Jurisdictional) in accordance with existing guidelines issued by Pr. DGIT (L&R) and CBDT from time to 7. time, If unfavorable order of Hon’ble High Court received in a case where proceedings are pending before NaFAC, inputs and comments of Pr. CIT (ReFAC)(AU) shall be obtained by PCIT (Jurisdictional) for taking a decision on acceptability or otherwise of the order

(C) SOP for Standing Counsels and CIT (Judicial) of the relevant jurisdiction:

1. The standing counsels or the O/o CIT (Judicial) shall seek comments/directions from the concerned PCIT (Jurisdictional) only. They shall not refer the writ petition directly to NaFAC.

2. During the course of defending a writ petition, if certain directions/comments are required from the NaFAC, the request for the same shall be made by the concerned PCIT (jurisdictional) as per SOP Para B.4 and not directly by the standing counsel. The standing counsel shall make a request to the concerned PCIT (Jurisdictional) for the same.

(D) SOP for PCIT (ReFAC) (AU) concerned:

1. On receipt of request for giving comments on the writ, the PCIT (ReFAC) (AU) shall ensure that the AU concerned examines the petition of the taxpayer with reference to the issue involved in the writ. The AU shall cross verify and record parawise comments with the information available with the office concerned, within a time limit specified for this purpose.

2. The Pr. CIT (ReFAC)(AU) will supervise and monitor the process of framing parawise comments in accordance with FAC, 2019 / section 144B of the Act or FPS, 2021 and the orders, circulars and notifications issued thereunder. The parawise comments will be approved by Pr. CIT (ReFAC)(AU) and CCIT (ReFAC) and before they are sent to PCIT (Jurisdictional).

3. PCIT (ReFAC) (AU) concerned may coordinate with PCIT (Jurisdictional) themselves email/faceless communication facility in 1TBA as and when available. This action should ideally be completed within 5 days of receipt of the writ in the O/o PCIT (ReFAC) (AU).

(E) SOP for NaFAC:

1. On receipt of a writ petition directly from the petitioner or the Standing Counsel or the High Court or the CIT (Judicial) concerned, a copy shall be forwarded to the PCIT (Jurisdictional), in case, proceedings are completed and to PCIT (ReFAC) (AU) where proceedings are pending [with copy to POT (jurisdictional)], within 5 days of receipt for necessary action as per Para A. In view of CBDTs communication vide F. No. 173/165/2020-ITA-I dated 14.08,2020 the NaFAC shall authorize the PCIT (Jurisdictional) as the authority to defend the case before the Hon’ble High Courts

2. On receipt of request from the PCIT (Jurisdictional) for unmasking of AU, the NaFAC shall forward the request to the Directorate of Systems for unmasking of the AU concerned and provide such details of the PCIT (ReFAC) (AU) concerned to the PCIT (Jurisdictional).

3. On receipt of request from the PCIT (Jurisdictional) for specific inputs on policy matters or provisions related to FAS 2019/section 144B of the Act or FPS, 2021 being challenged, the NaFAC shall:-

§  Examine whether the request is accompanied by terms of reference for seeking comments of NaFAC as per prescribed template. Prescribed template is enclosed as Annexure – A.

§  Analyse the writ petition and respond on broad policy issues. If required, NaFAC may refer the petition to the CBDT and Directorate of Legal and Research and obtain comments from the relevant division before sending a response to the PCIT (Jurisdictional).

(F) SOP for CIT (ITBA), Directorate of Systems:

1. On receipt of request for unmasking of the AU from NaFAC, the ITBA team shall give the details of PCIT (ReFAC) (AU) concerned.

If the modification to returned income is done by the new AU after modification suggestions reported by the Review Unit, details of both the AUs (original and new) shall be provided.

2. A number of writs have been filed because of apparent violation of principles of natural justice. In many such cases, the High Courts have set aside the cases back to the file of the Assessing Officer for giving a fresh opportunity and taking into consideration the submissions of the assessee. On receipt of such set aside request as per para B.5 from the PCIT (Jurisdictional), the ITBA shall ensure that:

The work item shall be transferred automatically to the same ReFAC in which the case was originally assessed for the completion of the same.

If the modification to returned income is done by the new AU after modification suggestions reported by the Review Unit, the work item shall be transferred automatically to the original ReFAC  AU in which the case was originally allocated at the first instance for the completion of the same. The work item is to be completed by the ReFAC AU concerned.

5. This SOP may be brought to the notice of all Pr. CsIT and other field offices for necessary action.

This issues with the approval of Central Board of Direct Taxes (CBDT).

High dismissed writ petition as dispute was factual in nature against which assessee had already filed appeals

Assessing Officer passed reassessment order making additions in hands of assessee with respect to investments made in mutual funds and issued notice of demand under section 156.  In instant writ assessee challenged said order on ground that reasonable opportunity of hearing was not given and Assessing Officer merely relied on the information received from the Multiyear NMS data and did not conduct any independent investigation while passing the impugned orders. Assessee claimed that the Respondents did not take into consideration the explanation provided by the Petitioner in her replies that all the investments in the mutual funds that were sought to be added in the income of the Petitioner was actually made by her husband namely Mr. Ashwani Talwar, who is regularly assessed to tax with the Assessing Officer Ward 7(4), Delhi and had been regularly filing his income tax returns for the last more than two decades showing considerable income. He points out that had the authorities made due inquiries, they would have got to know that the investments in the mutual funds were 'Joint Party Transactions' and were made by Mr. Ashwani Talwar, husband of the Petitioner, and that the Petitioner was simply a second holder of the securities.

However, a perusal of the impugned assessment order reveals that though the mutual funds are held in the joint name of the assessee and her husband, yet the payments of the same have been made from the bank accounts held jointly by the assessee and her husband in one of bank accounts the first name is that of the petitioner-assessee. It is also alleged in the impugned order that, “the source of deposit in all these bank accounts does not indicate whether such deposits has been made by her husband or by the assessee, out of their independent source of income”. Consequently, the dispute involved in the present matters is essentially factual in nature.

Moreover, appeals against the impugned assessment orders have already been filed under section 246A by the Petitioner before the appropriate Authority. Consequently, this Court is of the view that it would be appropriate if the petitioner raises all her contentions and submissions before the Appellate Authority. Accordingly, the present writ petitions along with applications stand disposed of with liberty to the petitioner to raise all her contentions and submissions before the Assessing Officer. (Related Assessment years : 2016-17 and 2017-18) - [Afsha Talwar v. Union of India (2022) 143 taxmann.com 306 (Del.)]

High Court dismissed writ petition as assessee had alternate statutory remedy against reopening of notice

A reopening notice under section 148 was issued upon assessee. Assessee filed a writ petition on ground that sanction under section 151 was not accorded by competent authority and further on making enquires online it became evident that computer generated document identification number (DIN) mentioned in sanction letter was also not correct and there was no signature of issuing authority on sanction order, thus, whole reopening proceeding was illegal. Since assessee had an efficacious alternate statutory remedy available, writ petition was to be dismissed. [In favour of revenue] – [Southern Ispat and Energy Ltd. v. Union of India (2022) 143 taxmann.com 270 (Chhattisgarh)]

Assessee can not challenge order belatedly on ground that no opportunity was provided to cross-examine witness

Assessee filed writ petition challenging order of assessment passed by Assessing Officer and contended that impugned order had been passed without affording an opportunity of cross-examination of a particular witness to assessee. High Court through its judgment set aside assessment order and remanded matter to Assessing Officer for fresh consideration after affording an opportunity of cross-examination to assessee. Thereupon Assessing Officer passed fresh assessment order on 05.03.2021. Assessee again filed a writ petition in June, 2022 contending that fresh assessment order passed by Assessing Officer following aforesaid judgment of High Court was again without affording an opportunity of cross-examination to assessee. It was noted that High Court should not interfere with assessment order dated 05.03.2021 in question on account of fact that challenge to same was made belatedly only in the month of June 2022 and almost after one year and three months. Writ petition deserved to be dismissed making it clear that assessee could file appeal against assessment order in question also raising the contention that the assessing officer failed to give an effective opportunity to the petitioner to cross examine the witnesses as directed by this Court in the judgment in W.P. (C)No.25978 of 2020. [In favour of revenue] (Related Assessment years : 2007-08 to 2009-10) – [K. A. Rauf v. ACIT (2022) 143 taxmann.com 205 (Ker.)]

High Court’s order passed on writ petition without issuing notice to Union of India violates principles of natural justice; Supreme Court remanded matter

Considering the fact that the impugned judgment and order passed by the Division Bench of the High Court (reported as G. M. Foods v. Income-tax & Wealth Tax Settlement Commissioner (2015) 58 taxmann.com 16 (Cal.) is without any notice to the Union of India and others and thereby without giving any opportunity to the Union of India and others, the same can be said to be in violation of the principle of natural justice and, therefore, on the aforesaid ground alone, the impugned judgment and order passed by the High Court is to be quashed and set aside and the matter is to be remanded to High Court to decide the writ petition afresh in accordance with law and on its own merits and after giving an opportunity to all concerned including the appellant herein. – [Union of India v. G.M. Foods (2022) 143 taxmann.com 154 (SC)]

High Court erred in entertaining writ petition against assessment order by-passing statutory remedies without any valid reasons, especially when there were serious disputes on facts as to date of assessment order

Assessing Officer passed the assessment order determining the tax liability along with interest and penalty under the MVAT Act and CST Act. Assessee preferred Writ before Hon’ble Bombay High Court which quashed the Assessment Order and the Demand Notice. Against which Revenue filed an appeal before Hon’ble Apex Court and contended that the High Court ought not to have entertained the writ petition under Article 226 of the Constitution as assessee has not availed statutory alternative remedy by way of appeal before the first appellate authority

The factual background of this case was such that the respondent - original writ petitioner was subjected to proceedings under the Maharashtra Value Added Tax, 2002  and Central Sales Tax Act, 1956.  The Assessing Officer issued a notice of assessment calling upon the assessee to produce relevant documents and also to show cause as to why it should not be assessed under the relevant provisions of Section 23 of the MVAT Act.

The writ petitioner submitted the required documents and also showed cause by letter dated 03.05.2018.  A personal hearing was fixed on 16.03.2020, however, on  the Assessing Officer was not available on the said date and therefore, no hearing took place.

According to the writ petitioner, multiple telephone calls were made to the Assessing Officer for personal hearing, but no such hearing materialised.The Assessing Officer passed an order determining the tax liability along with interest and penalty under the MVAT Act and CST Act. Without preferring any appeal before the first appellate authority, the respondent - assessee - original writ petitioner filed a writ petition before the High Court challenging the assessment order passed under the provisions of the MVAT Act and CST Act alleging inter alia that no order was passed in March and it was passed in the month of July, 2020, which was beyond the period of limitation.

The High Court entertained the said writ petition against the assessment order under Article 226 of the Constitution of India and passed the impugned judgment quashing and setting aside the assessment order and the demand notice. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court, the State of Maharashtra and others had preferred the present appeal.

After considering the submissions of the parties at length, the Court noted that against the assessment order passed by the Assessing Officer under the provisions of the MVAT Act and CST Act, the assessee straightway preferred writ petition under Article 226 of the Constitution of India. It was not in dispute that the statutes provide for the right of appeal against the assessment order passed by the Assessing Officer and against the order passed by the first appellate authority, an appeal/revision before the Tribunal.

While considering a matter pertaining to the Maharashtra Value Added Tax, 2002  and Central Sales Tax Act, 1956, the Supreme Court has opined instituting a petition under Article 226 of the Constitution before the High Court was not required as the statutes itself provide for the right of appeal against the assessment order passed by the Assessing Officer and against the order passed by the first appellate authority, an appeal/revision before the Tribunal.

The Hon’ble Apex Court held that when the statute provide for the right of appeal against the assessment order, the High Court ought not to have entertained the writ petition under Article 226 of the Constitution of India in view of the availability of the statutory remedy under the Act. It further observed when there is an alternate remedy available, judicial prudence demands that the court refrains from exercising its jurisdiction under constitutional provisions. In view of the above and in the facts and circumstances of the case, the High Court seriously erred in entertaining the writ petition under Article 226 against the assessment order, by-passing the statutory remedies.

Under such circumstances, the impugned judgment and order passed by the High Court was thus quashed and set aside. The writ petition filed before the High Court challenging the assessment order and consequential notice of demand of tax was also dismissed. The Bench ordered the respondent – assessee  to avail the statutory remedy of appeal and other remedies available under the MVAT Act and CST Act. It was further directed that if such a remedy is availed within a period of four weeks, then the appellate authority shall decide and dispose of the same on its own merits in accordance with law without raising any question of limitation, however, subject to fulfilling the other conditions, if any, under the statute. In light of the aforesaid observations, the present appeal was allowed in the aforesaid terms. – [State of Maharashtra and others v. Greatship (India) Ltd. (2022) 142 taxmann.com 417 (SC)]

Writ Petition denying liability under BM Act dismissed by High Court as effective alternate remedy of appeal to CIT(A) is available under that Act

Writ Petition denying liability to be assessed under Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 with reference to the foreign asset having been acquired by petitioners out of income not taxable in India is to be dismissed by High Court as:

(A)    Effective alternate statutory remedy of appeal to CIT(A) is available under section 15 of Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015;

(B)     It is not the petitioners' contention that the available alternate remedy under the Act is ineffectual and non-efficacious no have the petitioners made out case that the statutory authority has not acted in accordance with the provisions of the enactment in question, or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of the principles of natural justice;

(C)     Petitioners have agitated various factual issues which cannot be adjudicated in a writ petition;

(D)    All the contentions of the Petitioners, as raised in these Petitions, including the issue of jurisdiction, applicability or otherwise of the act, can very conveniently be dealt with by the Appellate Authority in tune with the mandate of Sections 15 and 17 of the Act of 2015; and

(E)     The Act provides complete machinery for the person aggrieved of any action taken by the Assessing Officer and the said person could not be permitted to abandon that machinery and to invoke the jurisdiction of the High Court under Article 226 of the Constitution when he had the adequate remedy open to him by way of an appeal to the Commissioner of Appeals.

However, having regard to the fact that the Petitioners have been bonafidely pursuing their claim in J&K High Court by filing these Writ Petitions under Article 226 of the Constitution at the relevant point of time and, admittedly, the decision in these Writ Petitions has consumed more than one year, liberty is granted to the Petitioners to avail the aforesaid statutory remedy of appeal against the proceedings initiated against them, including the show-cause notices, assessment orders, penalty notices, demand notices, within one month from the date of announcement of this Judgment. In the event any such appeal/s is/ are filed before the appellate authority within the time so granted in accordance with the mandate of the Act of 2015, the appellate authority shall consider the same only on merits without making any reference to the period of limitation and, till then, no punitive action shall be taken against the Petitioners. - [Tabasum Mir v. Union of India (2022) 142 taxmann.com 343 (J&K and Ladakh)

Reassessment on issue that assessee claimed excess cost of acquisition involved factual matrix; High Court dismissed writ

Reassessment was initiated in case of assessee on ground that during relevant year 2014-15, he had sold a property for Rs. 90 lakhs and declared cost of its acquisition in year 2008-09 at 95 lakhs but relevant records showed that cost of acquisition of said property was 12.35 lakhs and, thus, income had escaped assessment. Thereafter reassessment was completed by taking cost of acquisition of property at Rs. 12.35 lakhs. Challenging said order, assessee filed writ petition which was dismissed by Single Judge observing that assessment order was passed based on records that were available and furnished to Income-tax department by assessee and he had directed assessee to work out remedy before appellate authority by filing statutory appeal. Since subject matter in issue involved factual matrix which could not be decided by writ Court, assessee was to be directed to file statutory appeal before appellate authority. [In favour of revenue] (Related Assessment year : 2014-15) - [East Coast Consultants (India) Ltd. v. DCIT (2022) 142 taxmann.com 245 (Mad.)

Writ could not be filed against issue that no adequate/reasonable opportunity was provided to assessee

Opportunity of hearing granted and availed was adequate or reasonable would depend upon facts and circumstances of each case and there could not be any straight jacket formula. Assessing Officer served draft assessment order dated 04.09.2021 upon assessee on 06.09.2021 and asked him to submit his response within three days, i.e., by 09.09.2021. Assessee requested Assessing Officer for further one month’s time to submit response but Assessing Officer granted time only till 13.09.2021 and passed assessment order on 15.09.2021 under section 144 read with section 144B. Assessee contended before High Court that opportunity of hearing was inadequate.

On the other hand, learned Senior Standing Counsel for the Income-tax Department submits that it is not a case where no opportunity was granted to the petitioner. As a matter of fact, petitioner was duly notified and petitioner had, in fact, submitted his response. According to the petitioner, he could have filed a better response if some more time would have been granted. In such circumstances, he submits that it is not a case of no notice or no hearing. Therefore, no exceptional circumstance has been made out to invoke the writ jurisdiction of this court. Petitioner has adequate and efficacious alternative remedy under the statute which he has not availed

As assessee contended that opportunity of hearing was inadequate which affected his right to make a proper response, certainly same could be gone into by Commissioner (Appeals), since it might require examination of facts which High Court was not inclined to do in exercise of writ jurisdiction. Assessee was to be relegated to forum of appeal before Commissioner (Appeals) under section 246A. [In favour of revenue] (Related Assessment year : 2017-18) – [Sri Chandra Sekar Reddy Bokkalapall v. National Faceless Assessment Centre (2022) 142 taxmann.com 109 (Telangana)]

Approaching High Court instead of approaching CIT(A) shows assessee’s intention of avoiding tax payment; High Court dismissed writ

Assessing Officer passed assessment order on assessee and raised huge tax demand upon it. High Court dismissed writ petition filed by assessee on ground that there was no violation of principle of natural justice. Thereafter assessee filed a revision under section 264 before Commissioner seeking revision of order of assessment. Commissioner refused to interfere in assessment order. Assessee again filed writ petition challenging order of Commissioner.

It is a well-settled principle of law that power of Appellate Authority is much wider than the Revisional Authority and the Commissioner in exercise of his discretionary power of revision under section 264 of the Act cannot act as an Appellate Authority and go into the merits of the assessment by re-appreciating the facts and evidence and all materials. Further in view of Explanation I below section 264(7) of the Income Tax Act, 1961, clearly says that any order of the Commissioner under section 264 of the Act declining to interfere will be deemed not to be an order prejudicial to the assessee.

Considering the facts and circumstances of the case I am of the view that petitioners after dismissal of the earlier petition by this Court against the same assessment order without filing any statutory Appeal before the Commissioner of Income Tax (Appeals) with sole intention of avoiding the payment of huge amount of tax determined in assessment order have deliberately chosen the forum of revision under section 264 of the Act with a view to make out a case to come up before this Court again under Article 226 of the Constitution of India tactfully indirectly to get interference in assessment order which the Commissioner in exercising the power under section 264 of the Act has refused and this Court has also refused in the first round of litigation in WPA No. 11041 of 2021. [In favour of revenue] (Related :  Assessment year 2018-19) – [Unisource Hydro Carbon Services (P) Ltd. v. Union of India (2022) 139 taxmann.com 411 (Cal.)]

Writ maintainable in case of violation of principle of natural justice even if alternative remedy is available - Since orders proceeded with assessment saying that assessee had not responded though assessee had responded notwithstanding short time given for responding, there was violation of principle of natural justice - Assessment orders are to be set aside solely on the ground that the writ petitioner’s response to section 142(1) has not been considered

On the basis of a pen drive recovered in search conducted on third party premises a notice under section 153C was issued calling upon assessee to submit returns in accordance with section 140 within one day. On very next day notice under section 142(1) had been issued calling upon the assessee to respond within two days. The assessee, notwithstanding the short time, responded by way of a trail mail, but impugned orders under section 153C had been made by saying that the assessee had not responded to section 142(1) notice. The assessee filed writ petition inter alia on ground of violation of principle of natural justice. In reply, the revenue contended that this was a case of search under section 132 and, therefore, it was well open to the writ petitioner to file a statutory appeal to the statutory appellate authority under section 246A.

Held : The Court has repeatedly held that alternate remedy rule is not an absolute rule or in other words, it is a rule of discretion. It is a self-imposed restraint qua writ jurisdiction. This Court has also repeatedly held that when it comes to fiscal statutes, the alternate remedy rule should be applied with utmost rigour. However, what is of significance is that a Three Member Bench of the Supreme Court very recently, i.e., 03.09.2021 speaking through Justice Dr. Dhananjaya Y Chandrachud in Asstt. Commissioner of State Tax v. Commercial Steel Ltd. (2021) 130 taxmann.com 180 : 88 GST 799 (SC) made an adumberation of exceptions to the alternate remedy rule and held that when these exceptions are attracted, it can become an exceptional circumstance and a Writ Court at its discretion can interfere depending on the facts and circumstances of the case.

A careful perusal of the aforementioned decision makes it clear that NJP violation is a certain exception to the alternate remedy rule. To be noted, in the case on hand, writ petitioner's argument is posited and pivoted on NJP violation heavily.

The chronology, i.e., notice under section 153C giving one day time to send the return in accordance with section 140 and on the heels of this notice issuing section 142(1) notice on the very next day giving barely two full days time and calling upon the writ petitioner to respond and making the impugned order by saying that the writ petitioner had not responded, when the writ petitioner had actually responded by way of a trail mail is a certain NJP violation cumulatively making it one of the aforementioned exceptional circumstances. This is more so as section 142(1) notice and response to the same is so integral a part of assessment that it cannot be given a go-by. If it cannot be given a go-by, and this mechanism is statutorily imperative, violation of the same certainly qualifies as NJP.

What is of greater significance is that though writ petitioner has responded (notwithstanding the short time given for responding) the impugned order proceeds with the assessment saying that writ petitioner has not responded. So far as argument of the revenue that the writ petitioner should be relegated to a statutory appeal under section 246A is concerned, assuming that the writ petitioner is relegated to alternate remedy and if the writ petitioner files statutory appeal under section 246A, aforementioned argument regarding reply being sent and the same not being considered by the Assessing Officer and impugned orders being made on the basis that writ petitioner has not responded could be advanced as a ground of appeal before the statutory Appellate Authority also. If that is done, statutory Appellate Authority will have no option other than sending the matter back to the Assessing Officer to consider the response already sent by writ petitioner. This means further delay for the revenue and uncertainty for the assessee. This would serve nobody's cause. Therefore, on the facts and circumstances of the instant case, considering that this proceeding is based on a pen drive allegedly recovered in search proceedings under section 132 from the premises of a third party, it is imperative that the response of the writ petitioner is considered before assessment orders are made. In other words, this Court is interfering in writ jurisdiction, owing to the peculiar facts and circumstances of this case which puts it in one of the exceptional circumstances basket culled out in Commercial Steel Ltd. principle alluded to supra. Therefore, the impugned assessment orders are to be set aside solely on the ground that the writ petitioner’s response to section 142(1) has not been considered. [In favour of assessee] - [Praveen Kumar Pathi v. ACIT, Chennai (2022) 136 taxmann.com 382 (Mad.)]

High Court should not dismiss writ petitions casually with cryptic, non-speaking and non-reasoned orders by merely citing that ‘We are not Inclined to entertain this Petition’

From the writ petitions produced on record, it appears that the reopening of the assessment under Section 148 of the Income Tax Act has been challenged on a number of grounds. None of the grounds raised in the writ petitions has been dealt with and/or considered by the High Court on merits. There is no discussion at all on any of the grounds raised in the writ petitions. The Division Bench of the High Court has dismissed the writ petitions in a most casual manner which is unsustainable. Except stating that 'we are not inclined to entertain writ petition', nothing further has been stated by the High Court giving reasons for the disinclination to entertain the writ petitions.

The manner in which the High Court has dealt with and disposed of the writ petitions without passing any reasoned order is not appreciated by this Court. When a number of issues/grounds were raised in the writ petitions, it was the duty cast upon the court to deal with the same and thereafter, to pass a reasoned order. When the Constitution confers on the High Courts the power to give relief it becomes the duty of the Courts to give such relief in appropriate cases and the Courts would be failing to perform their duty if relief is refused without adequate reasons.

The High Court in exercise of powers under Article 226 of the Constitution of India was required to have independently considered whether the question of reopening of the assessment could be raised in a writ petition and if so, whether it was justified or not.

While emphasising the necessity to pass a reasoned order, in the case of Central Board of Trustees v. Indore Composite (P) Ltd. (2018) 8 SCC 443 (SC), it is observed and held by this Court that the courts need to pass a reasoned order in every case which must contain the narration of the bare facts of the case of the parties to the lis, the issues arising in the case, the submissions urged by the parties, the legal principles applicable to the issues involved and the reasons in support of the findings on all the issues arising in the case and urged by the learned counsel for the parties in support of its conclusion. It is further observed in the said decision that an order bereft of reasoning causes prejudice to the parties because it deprives them to know the reasons as to why one party has won and other has lost.

In the case of Union Public Service Commission v. Bibhu Prasad Sarangi and Ors. (2021) 4 SCC 516, while emphasising the reasons to be given by the High Court while exercising powers under Article 226 of the Constitution of India, it is observed and held by this Court that the reasons constitute the soul of judicial decision and how Judges communicate in their judgment is a defining characteristic of judicial process since quality of justice brings legitimacy to the judiciary. It is further observed that though statistics of disposal of cases is important of higher value is the intrinsic content of judgment. It is further observed that in exercise of powers under Article 226 the courts require to independently consider the issues involved.

Applying the law laid by this Court in the aforesaid decisions to the facts of the case on hand and the manner in which the High Court has disposed of the writ petitions, in the interest of sobriety, we may only note that the orders are bereft of reasoning as diverse grounds were urged/raised by the parties which ought to have been examined by the High Court in the first place and a clear finding was required to be recorded upon analysing the relevant documents.

Since we cannot countenance the manner in which the orders have been passed by the High Court which has compelled us to remand the matter to the High Court for deciding the writ petitions afresh on merits, we do so in light of the aforesaid observations.

In light of the foregoing discussion, we allow the present appeals and set aside the impugned orders passed by the High Court and remand the matters to the Division Bench of the High Court for deciding the writ petitions afresh in accordance with law, keeping in view our observations made supra. We, however, make it clear that we have refrained from making any observation on merits of the controversy, having formed an opinion to remand the cases to the High Court only for the reasons mentioned above. The High Court would, therefore, decide the writ petitions, bearing in mind our observations made above, strictly in accordance with law. – [Vishal Ashwin Patel v. ACIT (2022) 136 taxmann.com 372 (SC)]

High Court : Recommends Larger Bench on maintainability of writ against NaFAC where Jurisdictional Assessing Officer (JAO) outside Court’s territory

Delhi High Court recommends constitution of larger bench to decide the issue of maintainability of writ petitions in faceless assessments where the situs of the Jurisdictional Assessing Officer (JAO) is outside Delhi and thus, beyond High Court’s territorial limits; Expresses doubt on correctness of coordinate bench ruling in RKKR Foundation v. National Faceless Assessment Centre Delhi & Ors. (2021) 436 ITR 49 (Del.), wherein under similar circumstances, High Court decided to exercise writ jurisdiction and formulates six questions of law for consideration by the larger bench; For Assessment year 2018-19, Revenue passed the assessment order under Section 143(3) read with Section 144B followed by the notice of demand and penalty proceedings under Section 271AAC(1); Against such order, the Assessee filed writ petition before High Court alleging that the assessment order was passed immediately upon issuance of show cause notice cum draft assessment order, without providing opportunity to the Assessee to reply/object to the draft order; High Court  had granted stay on operation of the assessment order, notice of demand and penalty notice; High Court considers Revenue’s submission that the situs of the JAO would be determinative of the jurisdiction of the High Court for entertaining writ petitions under Article 226 and applying the doctrine of forum non conveniens, the writ petition is not admissible since JAO is outside Delhi and the Assessee has not chosen to change its PAN jurisdiction; Observes that coordinate bench in RKKR Foundation entertained the writ in a similar situation observing that since the NaFAC, the Court would have the jurisdiction in the matter, opines that “...co-ordinate bench of this Court in RKKR foundation has not taken into account the entire conspectus of the legal position in assignment proceedings with reference to the hierarchy of appellate authorities under the Act, 1961 and that the matter requires a deeper consideration.”; High Court expresses the view that by applying the doctrine of forum non-conveniens as expounded by a Full Bench of Delhi High Court in Sterling Agro, the Court can refuse to entertain the writ petitions where the JAO is outside NCT of Delhi, “However, it would be appropriate to refer this matter to a larger bench for a conclusive view as this issue will arise repeatedly in many cases.”; High Court directs for placing of the matter before the Chief Justice for constitution of a larger bench and clarifies that nothing contained in the order would be read as adjudicating or deciding the referred questions:

*Questions of law for consideration of Larger Bench:*

1.      Whether this Court has the necessary territorial jurisdiction under Article 226 to entertain writ petitions when the PAN Assessing Officer/Jurisdictional Assessing officer is located outside the NCT of Delhi? 

2.      Whether this Court, assuming it has jurisdiction, should refuse to exercise jurisdiction under Article 226 applying the doctrine of forum non conveniens if the PAN Assessing Officer/Jurisdictional Assessing officer is located outside the NCT of Delhi?

3.      Whether the presence of National Faceless Assessment Centre in Delhi would be a sufficient ‘cause of action’ to confer jurisdiction on this Court to entertain a writ petition under Article 226 ignoring the location of the PAN/Assessing Officer Jurisdictional Assessing officer and any other relevant factors?

4.      Whether when a part of cause of action arises within one or more High Courts, the petitioner being dominus litus would have the right to choose his forum?

5.      Whether applying the principles of the Full Bench decision in the case of Sterling Agro Industries Ltd. v. Union of India and Ors. 2011 (124) DRJ 633 (FB), this Court should entertain the writ petitions or refuse to exercise discretion to entertain the same on the ground that the PAN Assessing Officer/Jurisdictional Assessing Officer is located outside the jurisdiction of this Court? 

6.      Whether in WP(C) No.9307/2022 (another petition by RKKR Foundation in the present batch) the principle of res judicata is attracted?

(Related Assessment year : 2018-19) – [GPL-RKTCPL JV v. National Faceless Assessment Centre, Delhi  [TS-903-HC-2022(DEL)]  - Date of Judgement  : 17.11.2022 (Del.)]

Dismisses writ against reassessment proceedings, endorses appellate remedy; Follows Supreme Court ruling in Chhabildas

Delhi High Court dismisses Assessee’s writ petition challenging the order under Section 148A(d) along with notice under Section 148 and holds that the Assessee have not brought on record anything to suggest that the reassessment proceedings are being conducted in an arbitrary manner; Relies on Supreme Court ruling in CIT v. Chabildas and Anr. 2014 1 SCC 603 (SC), wherein it was held that as the Act provides an able machinery against assessment/ reassessment, the Assessee is not permitted to abandon that machinery and invoke writ jurisdiction under Article 226 of the Constitution; Further holds that the facts put forth in the present writ petition are disputed questions of facts, which cannot be adjudicated by a writ court exercising jurisdiction under Article 226 of the Constitution of India; Assessee, the Karta of HUF, for Assessment year 2016-17, was served with a notice under Section 148A(b) on the basis of search conducted on a third party engaged in share transaction through dummy accounts; Revenue concluded that  Assessee is the beneficiary of the specified transaction through a dummy account whereby Assessee received 32000 shares of TVS Motor of Rs.94.81 Lacs; Assessee admitted that he holds a trading account and had purchased 32000 shares of TVS Motor which were sold by Assessee through Religare Securities and disclosed the same as short term capital gain; Revenue, on perusal of Assessee’s reply, passed the order under Section 148A(d) holding the case to be a fit case for reassessment and issued the notice under Section 148; Assessee preferred the present writ petition whereby High Court observes that despite Assessee’s admission that the said shares were purchased through a trading account there are no relevant or contemporaneous documents evidencing the said purchase, such as bank statement; High Court takes note of the writ petition preferred by Assessee’s brother, alleged to have purchased and sold 32,000 shares of TVS Motor in the same financial year through Religare Securities for identical consideration; Further observes that in case of Assessee’s brother also no documents are placed on record evidencing the purchase or sale of the said shares; Rejects Assessee’s argument that the notice has been issued beyond limitation by relying on co-ordinate bench ruling in Touchstone v. ITO 2022 SCC Online 3011; Further rejects Assessee’s reliance on co-ordinate bench ruling in Anu Gupta v. ITO order dated 2nd September, 2022 passed by this Court in W.P. (C) No. 12683/2022, by observing that therein the Revenue failed to consider Assessee’s response to the notice under Section 148A(b), however in the present case the Revenue has duly considered Assessee’s response before passing the impugned order; Thus, dismisses the writ petition. [In favour of revenue] (Related Assessment year : 2016-17) – [Ajay Gupta (HUF) v. ITO [TS-909-HC-2022(DEL)] – Date of Judgement : 17.11.2022 (Del.)]

Promoter challenging Section 148 notice on struck-off Company, later restored, abuse of law; Imposes Rs. 50,000 cost on Assessee

Delhi High Court imposes Rs. 50,000 cost while dismissing writ petition by the Promoter challenging the reassessment notice issued in the name of a struck-off company since restored by NCLT; High Court observes that by virtue of Section 252(3) of the Companies Act, 2013 as per which NCLT’s order for restoration of a company will have the effect of placing the company in the same position as before striking-off and  deemed to be in existence on the date of the issuance of the impugned reassessment notice; Thus, holds the proceedings to be infructuous and that the Promoter has no locus standi to maintain the proceedings; Notes that the Promoter was a respondent in the appeal preferred before NCLT for restoration of the Company and remarks that the Promoter’s actions in opposing the appeal before the NCLT for restoration and persisting with the present petition even after the Company has been restored, shows that the Assessee is abusing the process of law to obstruct the assessment proceedings; Imposes cost on Assessee with a direction to deposit the same with the Delhi High Court Legal Services Committee within two weeks; The Promoter and Director of the erstwhile struck-off Company, preferred the present writ petition contending that the reassessment notice issued by the Revenue for Assessment year 2012-13, is null and void, as the same was issued in the name of the company which was struck off by the Registrar of Companies under Section 248 of the Companies Act, 2013, on 30.06.2017; High Court  notes that the company was struck-off in pursuance of the proceedings initiated by the Ministry of Corporate Affairs due to its default in filing statutory returns, however, NCLT upon realising the detriment caused to the interest of the Revenue due to the striking-off, restored the Company vide order dated 25.09.2019 to enable the Revenue to recover its dues; Further notes that the present writ petition has been filed by the Promoter in individual capacity and the defaulting Company has neither challenged the impugned notice under Section 148 nor the NCLT order restoring the company, which has therefore attained finality in law; Rejects Promoter’s contention that since the impugned notice was issued when the Company was struck off from the ROC and before the NCLT order, thus the subsequent NCLT order restoring the Company, will not have the effect of curing the defect in issuance of notice to the non-existent entity and holds the same to be fallacious and in contravention of Section 252(3) of the Companies Act, 2013; Refers to Section 250 of the Companies Act, which provides that the company which is struck off under Section 248, shall be deemed to continue to be in existence for the purpose of discharging its liabilities; Further refers to repealed Section 560(5)(a) of the Companies Act, 1956 wherein it was provided that the liability of every director, manager or other officer who was exercising any power of management, shall be enforced as if the company had not been dissolved; Factually distinguishes Supreme Court rulings in Commissioner of Wealth Tax, Meerut v. Sharvan Kumar Swarup & Sons, (1994) 6 SCC 623 (SC) and First Additional Income Tax Officer, Kozhikode (Kerala) v. Mrs. Suseela Sadanandan and Another, (1965) 57 ITR 168 (SC) and Andhra Pradesh High Court  ruling in Shrikishen Dhoot & Others relied upon by the Promoter; Relies on Supreme Court ruling in CIT, Jaipur v. Gopal Shri Scrips (P) Ltd. (2020) 7 SCC 654 (SC), wherein after having referred to Section 560(5)(a) of the Companies Act, 1956 and Chapter XV of the Income-tax Act, it was held that High Court  was wrong in dismissing the appeal filed against the struck off Company; Thus holds the impugned notice under Section 148 valid. [In favour of revenue] (Related Assessment year : 2012-13) – [Ravinder Kumar Aggarwal v. ITO [TS-905-HC-2022(DEL)] – Date of Judgement : 17.11.2022 (Del.)]

High Court dismisses writ petition for availability of alternative remedy; Impost cost on Advocate for Rude Behaviour in Court

In this matter, petitioner has challenged the impugned show cause notice dated 23.03.2022, giving opportunity to the petitioner to file any objection to the draft assessment order before passing final assessment order under Section 143(3) of the Income Tax Act, 1961 in order to give effect to the order passed by the Commissioner under Section 263 of the Income Tax Act dated 04.03.2021 and the petitioner did not avail the said opportunity. It has also filed a supplementary affidavit challenging the impugned final assessment order under Section 143(3) dated 30.03.2022 which has been passed during the pendency of the writ petition. The impugned assessment order dated 30.03.2022 which has been challenged by way of supplementary affidavit is an appealable order before the Commissioner of Income Tax (Appeal). It also appears that the aforesaid impugned order dated 30.03.2022 was passed after following due procedure of law by issuance of notice and giving opportunity of hearing from time to time to the petitioner and it has been recorded in the assessment order that petitioner’s reply dated 18.02.2022 was also taken into consideration. It has been specifically recorded in the assessment order that a letter was issued on the petitioner on 19.01.2022 but no reply was filed by the petitioner and further a notice under Section 142(1) of the Act was issued to the petitioner on 15.02.2022 requiring it reply on or before 20.02.2022. So, this cannot be a case of violation of principles of natural justice and petitioner has participated in the assessment proceeding and now when it has gone against him he wants to challenge the assessment order before this Writ Court and want this Court to act as an appellate authority by going into the merit of the assessment which is the job of the CIT (Appeal).

Held : We are not inclined to entertain this writ petition and the same is accordingly dismissed without going into the merit of the assessment only on the ground of availability of the alternative remedy. This writ petition is dismissed with costs of Rs. 10,000/- upon learned Advocate because of his rude behavior in Court and addressing to the chair in highly disrespectful manner. – [Srei Equipment Finance Ltd. v. Additional / Joint / Deputy / Assistant CIT - Date of Judgement/Order : 13.04.2022 (Cal.)]

No writ can be filed against assessment order which was pending for consideration before Appellate Authority

Pursuant to notice for re-assessment, petitioner company sought for personal hearing. But lower authorities overlooked prayer made by petitioner and impugned assessment order had been passed.  Immediately after issuance of demand notice based on assessment order, statutory appeal as provided under section 246 was filed before Appellate Authority which was pending consideration. Thereafter, petitioner had filed writ petition challenging assessment order and demand notice issued under section 156. Issue with regard to filing of two proceedings challenging one order or proceeding has been considered by Hon’ble Supreme Court in case of Satya Pal Anand v. State of M.P. (2016) 10 SCC 767 and has held thus :—

“25. It is a well-established position that the remedy of writ under Article 226 of the Constitution of India is extraordinary and discretionary. In exercise of writ jurisdiction, the High Court cannot be oblivious to the conduct of the party invoking that remedy. The fact that the party may have several remedies for the same cause of action, he must elect his remedy and cannot be permitted to indulge in multiplicity of actions. The exercise of discretion to issue a writ is a matter of granting equitable relief. It is a remedy in equity. In the present case, the High Court declined to interfere at the instance of the appellant having noticed the above clinching facts. No fault can be found with the approach of the High Court in refusing to exercise its writ jurisdiction because of the conduct of the appellant in pursuing multiple proceedings for the same relief and also because the appellant had an alternative and efficacious statutory remedy to which he has already resorted to. This view of the High Court has found favour with Dipak Misra, J. We respectfully agree with that view.”

In view of aforementioned facts, provisions under section 251 of the Act of 1961, grounds raised by petitioner and also considering aforementioned ruling of Hon’ble Supreme Court, the writ petition challenging the same order which is pending consideration before the Appellate Authority is not maintainable and is liable to be dismissed, as such. [In favour of revenue] - [Agrawal Global Infratech (P) Ltd. v. Union of India (2021) 133 taxmann.com 137 (Chhattisgarh HC)]

Assessing Officer can not ask voluminous particulars from assessee without providing adequate time to furnish documents - Where in scrutiny, voluminous particulars were sought to be filed from an individual assessee within few days and assessment order was passed without taking note of documents submitted by assessee belatedly, there was violation of natural justice

Section 144B, read with section 143, of the Income-tax Act, 1961 - Faceless Assessment (Natural justice) - The appellant is an individual and to the best of his knowledge and ability, he has furnished the details. The Assessing Officer, while completing the assessment, false the appellant for not furnishing the statement of account of the credit cards. The appellant has stated as to why there was a delay in furnishing the details, as he had to obtain the same from the concerned banks and nine particulars called for were voluminous. It may be true that the assessment was an E-assessment. Nevertheless, if it is a scrutiny assessment under section 143(3), the Assessing Officer is bound to provide adequate opportunity to the appellant. Adequacy of the opportunity would vary from case to case, and there is no straight jacket formula on the same. In case of Companies registered under the Companies Act or other financial institutions, they would have a large team of legal experts to assess and who can appear before the Assessing Officer or who can furnish details, as called for by the Assessing Officer. This may not be a case, when it comes to an individual-assessee. Especially, when a person, like an appellant, who states that he is employed and carrying on a part-time business, who being a multi-level marketing person in a chain of marketing persons, who handle projects, manufactured/marketed by Amway. The assessment order has been passed in violation of principles of natural justice and therefore, the writ petition was maintainable. Whether the opportunity, which can be afforded to the appellant-assessee by the Appellate Authority, would be sufficient. In this regard, the Supreme Court in Tin Box Co. v. CIT (2001) 249 ITR 216 : 116 Taxman 491 (SC) has held that opportunity of hearing by the Appellate Authority or the Tribunal or the Court can be of no substitute to that of the opportunity that will be provided by the Assessing Officer, at the first instance. Appellant-assessee had been dealt with in a most unfair manner and there was violation of natural justice. Thus, the writ appeal is to be allowed and the order passed in the writ petition is to be set aside. The assessment order is to quashed and the matter is to be remanded to the appropriate authority for fresh assessment. [In favour of assessee] (Related Assessment year : 2018-19) – [V. Thillainatesan v. ACIT, Delhi (2021) 133 taxmann.com 131 (Mad.)]

Assessee cannot seek parallel remedy by filing writ on same day of lodging of objections before Assessing Officer

Notice under section 148 was issued to assessee seeking to reopen assessment. After receipt of impugned notice assessee sought for reasons for issuance thereof which were supplied to it by Assessing Officer. However, on same day assessee filed writ petition before instant Court. Attempt of assessee to have notice under section 148 interdicted by presenting instant writ petition on same day of lodging of objection to notice by submitting a detailed reply was not justified as assessee appeared to have pursued writ remedy as a parallel remedy, which is impermissible in law. If assessee perceived that there was no justification for Assessing Officer to issue impugned notice since jurisdictional fact was absent, assessee could have raised said point at first instance before the Court prior to submitting to jurisdiction of Assessing Officer. However assessee having submitted to jurisdiction of Assessing Officer and therefore, there being no error of jurisdictional fact, assessee was to be relegated to forum before Assessing Officer and impugned notice shall be taken to its logical conclusion in accordance with law.

In such view of the matter, we decline interference and relegate the petitioner to the forum before the Assistant Commissioner. Assessee cannot seek parallel remedy by filing writ on same day of lodging of objections before Assessing Officer. An error of jurisdictional fact is a point on which an action for judicial review could be maintained without relegating noticee to notice issuing authority; after submitting to Assessing Officer’s jurisdiction under section 148, assessee cannot pursue writ remedy. The impugned notice shall be taken to its logical conclusion in accordance with law. If any adverse finding is rendered against the petitioner, obviously the same must have the support of reasons. Thereafter, the petitioner shall be at liberty to explore his remedy in accordance with law. [Matter remanded] (Related Assessment year : 2016-17) – [John Sebastian Zezito Lobo v. ACIT, Panaji (2021) 131 taxmann.com 79 (Bom.)]

High Court dismissed writ as assessee did not file appeal against assessment order and exercised writ jurisdiction after lapse of more than two years

Section 129 of the Central Goods and Services Tax Act, 2017 - Section 129 of the Andhra Pradesh Goods and Services Tax Act, 2017 - Detention, seizure and release of goods and conveyances in transit. Competent Authority made assessment of a consignment of coconut oil being delivered in two vehicles by one ‘M’, Puducherry to assessee, Vijayawada and passed an assessment order dated 07.01.2019 on assessee and levied tax and penalty upon it. Assessee did not take any steps against said assessment order and after lapse of more than two years sought to challenge said order by way of writ. It argued that assessment was made taking into account maximum retail price and not actual sale price. Such issue ought to have been agitated before appellate forum. Writ petition required to be dismissed. [In favour of revenue] – [Marico Ltd. v. State of Andhra Pradesh (2021) 130 taxmann.com 461 (AP)]

High Court can not entertain Writ Petition when the tax payer has alternate remedy in the Act under Section 107 of the CGST Act, 2017

The existence of an alternate remedy is not an absolute bar to the Maintainability of a writ petition under Article 226 of the Constitution. But a writ petition can be entertained in exceptional circumstances where there is:
(i) a breach of fundamental rights;
(ii) a violation of the principles of natural justice;
(iii) excess of jurisdiction; or
(iv) a challenge to the vires of the statute or delegated legislation.

By way of civil Petition filed by the Department before Supreme Court, it was
contended by the department that the High Court ought not to have entertained the writ petition. The respondent had a statutory remedy under section 107. Instead of availing of the remedy, the respondent instituted a petition under Article. It was further contended that the respondent (tax payer) had alternate remedy to go through the Process of filing appeal. However, tax payer preferred writ petition before High Court and therefore, High Court ought not to have entertained the writ petition.

In the present case, none of the above exceptions was established. There was, in fact, no violation of the principles of natural justice since a notice was served on the person in charge of the conveyance. In this backdrop, it was not appropriate for the High Court to entertain a writ petition. The assessment of facts would have to be carried out by the appellate authority. As a matter of fact, the High Court has while doing this exercise proceeded on the basis of surmises. However, since we are inclined to relegate the respondent to the pursuit of the alternate statutory remedy under Section 107, this Court makes no observation on the merits of the case of the respondent. For the above reasons, we allow the appeal and set aside the impugned order of the High Court. The writ petition filed by the respondent shall stand dismissed. However, this shall not preclude the respondent from taking recourse to appropriate remedies which are available in terms of Section 107 of the CGST Act to pursue the grievance in regard to the action which has been adopted by the state in the present case. [In favour of revenue] - [Asstt. Commissioner of State Tax v. Commercial Steel Ltd. (2021) 130 taxmann.com 180 : 88 GST 799 (SC)]

No writ can be filed against notice issued for filing ITR as objections can be raised in reassessment proceedings

Writ petition is maintainable in exercising extraordinary jurisdiction under article 226 of the Constitution of India, in challenging order, inter alia, either on ground that it is mala fide or arbitrary or that it is passed on irrelevant and extraneous consideration or if same is in violation of any Statutory Rules in force

High Court cannot interfere with assessment order, unless there is violation of principles of natural justice or fundamental right or non-compliance of statutory requirements in any manner. Hence, where revenue did not pass any final order of reassessment in respect of tax liability that escaped assessment and had only sought for filing returns in prescribed form, thus, no prejudice having been caused to assessee, these questions could not have been decided in writ proceedings. – [DCIT v. Daimler India Commercial Vehicles (P) Ltd. (2021) 129 taxmann.com 376 (Mad.)]

Petitioner had an alternate and efficacious remedy by way of an appeal before Commissioner (Appeals) against assessment orders recomputing long term capital gain of petitioner from sale of property, no relief could be granted to petitioner in writ petitions

Petitioner along with her sister sold a property. Pursuant to a dispute as to value declared by petitioner, Assessing Officer by impugned orders, re-computed income from long-term capital of petitioner from sale of property and called upon petitioner to pay differential taxes - Petitioner contended that revenue ought not to have adopted higher value, as sale price was negotiated by petitioner's father during his lifetime in 2010 and he had received an advance of Rs. 50 lakhs in respect of property and thus, manifold increase in guideline value by Registration Department in 2012 could not be basis to countermand value adopted in sale agreement. However, agreements which had been produced by petitioner were not registered documents and thus, it could not be concluded that value adopted by petitioner reflected correct value for purpose of payment of stamp duty. Further, petitioner had an alternate and efficacious remedy by way of an appeal against respective assessment orders before Commissioner (Appeals). Therefore, no relief could be granted to petitioner in these writ petitions. [In favour of revenue] (Related Assessment years : 2013-14 and 2014-15) – [Smt. Rajeswari Iyer v. ITO, (International taxation), Chennai (2021) 127 taxmann.com 239 (Mad.)]

As pointed out earlier, the appellant’s case would fall within the exception No. 2 and therefore, the writ petition was maintainable.Assessee not liable for malfunctioning in e-appeal facility; Holds physically filed appeal before CIT(A) valid

Mumbai ITAT allows Assessee’s appeal, holds that the Revenue cannot take the benefit of non-functioning/ malfunctioning of its portal and deny the statutory right of the Assessee to appeal against the assessment order over technical failure in e-filing facility; Assessee (Estate of Ramniklal Rajmal Mehta) filed an appeal before CIT(A) in physical mode on 23.01.2019 which was revised on 27.01.2020 on account of change of address as against Rule 45 of IT Rules that requires compulsory filing of the e-appeals before CIT(A) with effect from 01.03.2016; However, CIT(A) dismissed the appeal, treating the appeal as invalid; Assessee submitted that an e-appeal was filed on 12.03.2021 along with an application for condonation of delay and sought to justify the physical filling of appeal on the basis that notice u/s 153A was issued on PAN of the deceased (Shri Ramniklal R. Mehta); The legal heir of the deceased filed the returns for the Assessee using PAN of the deceased before applying for new PAN for the Assessee; The legal heir could not login to the Revenue’s website through the newly allotted PAN and was unable to pay the taxes and file an appeal against the assessment order; On legal heir's grievance, ITBP website informed that since he was a minor, he was not authorized and a legal guardian could represent him for performing the required functions; ITAT observes that the Assessee had been filing the return of income electronically, therefore, the appeal against the assessment order was required to be filled electronically as per bare reading of the Rule 45 and Section 249; ITAT observes, "In our view, the assessee made sufficient and sincere efforts to file the appeal in electronic forms, albeit the assessee failed in his efforts for the reasons recorded in the order. In our considered opinion, the non filing of the electronic appeal was on account of the inaccessibility of the Income tax portal to the estate of Shri Ramniklal R. Mehta and assessee was forced to file the appeal in physical form"; Thus, expounds that rules are meant to achieve the ends of justice and not to put impediments in the path of justice and the non-filing of the e-appeal was on account of the inaccessibility of the portal which forced the Assessee to file an appeal in the physical form; ITAT sets aside CIT(A)’s order and directs CIT(A) decide the appeals on merit, grant hearing and also permit filing of any other documents in support of the case. – (Related Assessment Years: 2011-12 to 2015-16) – [Estate of Ramniklal Rajmal Mehta v. DCIT – Date of Judgement : 30.11.2021 (ITAT Mumbai)]

Dismisses writ petition, holds Assessee’s non-response to Revenue’s notices, incomplete pleadings deprivative of writ remedy

Kerela High Court dismisses writ petition, holds Assessee’s adamant conduct of not responding to notices issued prior the passing of ex parte assessment order itself deprives the Assessee from seeking remedy in writ jurisdiction; Assessee-Company (Chams Branding Solutions India Pvt. Ltd) engaged in the business of advertisement was served with a huge demand notice and an ex parte assessment order under section 143(3) for Assessment year  2018-19, which was challenged by the Assessee through a writ petition; Assessee submitted that it was issued a notice under section 142(1) on 12.12.2019  which was responded to, and the assessment order under section 143(3) was bad in law, as since no other notices were issued other than the aforesaid notice, the order was violative of principles of natural justice; Revenue submitted that Assessee was issued notices on four occasions and further an SCN was issued on 12.03.2021 requesting it to submit its reply, and thus was granted several opportunities, and on Assessee’s failure to submit a response, the impugned ex parte assessment order was issued; High Court remarks that though the Assessee was granted sufficient opportunity to respond, it had not replied to any of the notices and thus, it could not turn around and contend violation of principles of natural justice; High Court finds that last notice issued on 13.03.2021 required Assessee to reply by 14.03.2021 may not appear to be a reasonable response time, but in the background of the case, where Assessee failed to respond to the six prior notices, Assessee cannot claim the benefit of violation of principles of natural justice, and remarks “Petitioner's conduct reveals its adamant approach to refrain from responding to notices.”; High Court observes that “The notice of 12.03.2021 requesting the petitioner to submit its replies against the proposed additions on or before 14.03.2021 cannot be viewed in isolation or dehors the past conduct of the petitioner.”; High Court remarks absence of pleading about the earlier notices in Assessee's writ petition is singularly detrimental to the Assessee, and this conduct must also deprive the Assessee of the benefit of Article 226 of the Constitution of India; High Court holds “Article 226 is not meant to short circuit or circumvent statutory procedures. it is only when the statutory remedies are entirely ill-suited to meet the demands of extraordinary situations that the Court should interfere under Article 226, especially in matters of taxation. Such a situation is not existing in the instant case”; High Court refers to the Supreme Court ruling in Assistant Commissioner of State Tax and Others v. Commercial Steel Ltd. (2021) SCC Online 884] wherein it was held that “though not a bar, entertaining a writ petition must be only in exceptional circumstances where there is a breach of fundamental rights or a violation of the principles of natural justice or an excess of jurisdiction or when there is a challenge to the vires of the statute.”; With regards to the technical error in the disallowance of Rs. 2.18 Cr. High Court holds that it is a matter which can be rectified under Section 154, hence, need not be considered under Article 226; Reserves Assessee’s liberty to pursue statutory remedies. [In favour of revenue] (Related Assessment year : 2018-19) – [Chams Branding Solutions India (P) Ltd. v. DCIT – Date of Judgement : 29.10.2021 (Ker.)]

Assessee filed a writ petition challenging assessment order as well as demand notice issued by Assistant Commissioner is not valid, Since assessee had an alternative remedy of appeal before appellate authority, writ petition was disposed of with a direction to assessee to avail said remedy

Assessee filed a writ petition challenging assessment order as well as demand notice issued by Assistant Commissioner. Since the petitioner has an alternative remedy of appeal before the appellate authority, this writ petition stands disposed of with a direction that if the petitioner approaches the appellate authority by filing an appeal along with an application for condonation of delay within a period of four weeks from today, the appellate authority shall take into consideration all the contentions raised by the petitioner. While considering the prayer for condonation of delay, the Appellate Authority shall also take into consideration the period of pendency of this writ petition, i.e. from 22.12.2017 till today, for approaching the wrong forum under bona fide mistake. Till filing of the appeal, the interim order passed by this Court on 05.02.2018 shall continue. On facts, SLP filed against decision of High Court was to be dismissed [In favour of revenue] – [Mahesh Kumar Agarwal v. PCIT (2019) 263 Taxman 468 : 105 taxmann.com 273 (SC)]

Assessee filed writ petition contending that impugned assessment order and subsequent recovery proceedings were to be set aside as there was no valid service of assessment notice upon assessee, since alternate efficacious statutory remedy of filling appeal to Commissioner (Appeals) was available, instant writ petition could not be entertained

Assessee-company was in business of buying and selling of paintings and artwork. An ex-parte assessment order was passed against assessee. Since no appeal was filed, department initiated recovery proceedings and 68 paintings of assessee were attached and thereafter put to sale through auction. Assessee filed an instant writ petition contending that there was no valid service of assessment notice upon assessee as one of its director was in judicial custody and another had already retired and, further, out of 68 paintings auctioned only 19 paintings belonged to assessee. Therefore, said assessment order was invalid and, accordingly, impugned auction proceedings were to be set aside. Challenge to order of assessment on merits should be ordinarily allowed to be examined by Commissioner (Appeals) in whom statutory appellate powers have been vested under Act. Since, in instant case, alternate efficacious statutory remedy of filling appeal to Commissioner (Appeals) was available, instant writ petition directly aimed at an order of assessment could not be entertained and assessee was instead relegated to Appellate remedy. Further, since assessee had not produced even prima facie evidence suggesting that its ownership was limited only to 19 of these paintings put to auction and, further, through proposed auction and thereafter, present litigation had received wide publicity, no one had came forward claiming ownership of remaining paintings, auction proceedings could not be set aside. Under such circumstances, both the prayers of the petitioner are refused. However, it is provided that if the petitioner files appeals against the assessment orders, the Appellate Commissioner shall hear such appeals on merits, without reference to the limitation. All the contentions of both the sides, in relation to such orders of assessment including the question of validity of assessment notices, are kept open. Petition is disposed of. - [Camelot Enterprises (P) Ltd. v. Tax Recovery Officer (Central), Mumbai (2019) 105 taxmann.com 155 (Bom.)]

SLP dismissed against High Court’s ruling that where in respect of transfer of assessee’s case to another place and assessment there, assessee had already filed a statutory appeal before Commissioner (Appeals), simultaneous writ petition should not be entertained

Petitioner firm pleaded that despite it had closed down its business, Commissioner sent notices for transfer of its case at wrong address. Further, case of assessee was transferred to another place and assessment was made there. Assessee filed appeal against such transfer and assessment. Writ petition was simultaneously filed before High Court. High Court by impugned order held that it could not interfere in any case until and unless there is an extraordinary situation warranting it to interfere, thus, appeal filed before Commissioner (Appeals) should be entertained and instant writ petition was to be dismissed. Special Leave Petition filed against impugned order was to be dismissed. [In favour of revenue] (Related Assessment year : 2001-02) - [Dev Bhumi Industries v. CIT (2017)  247 Taxman 8 : 80 taxmann.com 191 (SC)]

Reassessment order could very well be challenged by assessee under sections 246 and 246A, writ petition would not be maintainable against said order

Availability of alternative efficacious remedy for maintainability of writ petition is a self imposed restriction from which Court, at times, may depart in certain special circumstances of an individual case. Such eventualities are (i) when the authority has acted arbitrarily without the sanction of law (ii) when the action of the authority is palpably wrong or (iii) when High Court is confronted with an unprecedented extraordinary situation.

The assessee challenged impugned reassessment order by filing writ petition held that the assessee could challenge impugned order under sections 246 and 246A and further, the remedy of appeal before the Tribunal was available if the outcome of the appeal under section 246/246A was not productive for the assessee. The jurisdiction and powers of the appellate authority under the Act are very wide so as to examine the legality and propriety of the impugned action of the Assessing Officer and the consequential orders. Appellate authority, while exercising its jurisdiction, can take care of about the grievance of the assessee in right perspective and if feel persuaded can very well redress. Therefore, writ petition was not maintainable against impugned order. [In favour of revenue] (Related Assessment years : 2007-08 and 2008-09) – [Smt. Kiran Kanwar v. Union of India (2016) 286 CTR 262 : (2017) 80 taxmann.com 161 (Raj.)]

Writ petition before the High Court is not maintainable when alternate remedy is available under the Income Tax Act, 1961. It held that as alternate remedy was available to the assessee, the High Court ought not to have entertained the writ petition and instead should have directed the assessee to file reply to the said notices. Upon receipt of a decision from the Assessing Officer, if for any reason assessee was aggrieved by the said decision, the same could be questioned before the forum provided under the Act.—[CIT v.Vyaybhai N. Chandrani (Civil Appeal No. 5888 to 5903 of 2013, dated 18.07.2013)]

Existence of an adequate legal remedy was a factor to be taken into consideration in the matter of granting Writs

In Rashid Ahmad v. Municipal Board, Kairana, (1950) 1 SCR 566, it was laid down that existence of an adequate legal remedy was a factor to be taken into consideration in the matter of granting Writs. This was followed by another Rashid case, namely, K.S. Rashid & Son v. The Income Tax Investigation Commissioner (1954) 25 ITR 167 (SC) which reiterated the above proposition and held that where alternative remedy existed, it would be a sound exercise of discretion to refuse to interfere in a petition under Article 226. This proposition was, however, qualified by the significant words, “unless there are good grounds therefor”, which indicated that alternative remedy would not operate as an absolute bar and that Writ Petition under Article 226 could still be entertained in exceptional circumstances.

Writ, the last option

Similarly, the Madhya Pradesh High Court dismissed a writ petition filed against the order of the Commissioner under section 263. In Motilal Jain (H.U.F) v. CIT (283 ITR 160), the Court held that an appeal could be filed to the Tribunal against the Commissioner’s order and, therefore, a writ would not lie.

A writ petition is not like an appeal where the assessee has a statutory right to require the Court to entertain the challenge. A writ will be maintained only if the notice is clearly without jurisdiction & not otherwise. —[Nickunj Eximp Enterprises (P) Ltd. v. ACIT - Date of pronouncement : 18.06.2014) (Bom)]

Writ petition against order of Tribunal - Proper remedy is appeal under section 260A

The Income Tax Act provides a complete machinery for assessment of tax and for obtaining relief in respect of any improper orders passed by the authority. The assessee must, therefore, resort to the statutory remedies and cannot be permitted to invoke the jurisdiction of the High Court under Article 226 of the Constitution. The High Court in exercise of its extra-ordinary jurisdiction in matters relating to assessment, levy and collection of tax, may exercise jurisdiction only when the question of infringement of fundamental rights arises or where on undisputed facts the taxing authorities are shown to have assumed jurisdiction, which they do not possess. However, with regard to the rights other than fundamental rights the High Court ought not to exercise its jurisdiction under Article 226 of the Constitution, when an alternative, adequate and equally efficacious remedy is available to the assessee. —[Rahuljee and Company (P) Ltd. v. Income Tax Appellate Tribunal and Others (2010) 323 ITR 327 (Delhi)]

Where the issue is open for a decision : Writ was not the appropriate remedy

Where an assessee questions a notice under section 148 for reassessment of capital gains on the ground that the assessee has not disclosed the substituted cost on the date of option on 01.01.1964, correctly, it was decided that writ was not the appropriate remedy as it is open to the petitioner to raise all the objections to the proposed reassessment before the assessing authority. - [Mohd. Moinuddin Hussain v. ITO (1999) 240 ITR 220 : (2000) 163 CTR 135 (AP)]

Writ jurisdiction cannot be invoked before approaching Tribunal

The writ petition does not deserve to be entertained because of the availability of an effective alternative remedy. The Income Tax Act, 1961 constitutes a complete code to deal with all issues relating to tax on income and when a specific remedy has been provided under the statute to a person, aggrieved by an order passed under section 143 read with section 147 of the Act, there is not any reason to deviate from the well established rule that the High Court will ordinarily not entertain the writ petition under article 226 where an effective alternative remedy is available to the petitioner. The appellate authority is vested with the power to grant interim stay in an appropriate case. - [Harbhajan Singh v. T.C. Bansal, ITO & Anr. (1999) 235 ITR 431 (P&H)]

Issue on writ petition can be remanded

While deciding a writ appeal, the Supreme Court pointed out that the issue, whether the petitioner was entitled to exemption as a charitable institution was a matter, which required investigation of facts and should not have been entertained on a writ petition. It also found that the corporation was not a local authority within the meaning of section 10(20) to be entitled to exemption, the claim for exemption under section 11 was, therefore, remanded to the Assessing Officer to be decided in accordance with law. —[CIT v. U.P. Forest Corporation (1998) 230 ITR 945 : 145 CTR 402 : 97 Taxman 259 (SC)]

Writ jurisdiction of the High Court cannot be invoked more than once by any person

The writ jurisdiction of the High Court cannot be invoked more than once by any person aggrieved of the order of any authority subordinate to it and if the first Writ petition is dismissed for whatever reason the petitioner cannot approach the High Court once again to invoke the writ jurisdiction on a different basis or ground.—[State of UP & Anr. v. Labh Chand (1993) 200 ITR 647 (SC)]