1975 (10) TMI 4 - HC - Income Tax

High Court Upholds Transfer of Assessment Jurisdiction, Dismisses Writ Petitions

The Delhi High Court quashed the initial transfer of assessment jurisdiction but deemed the subsequent transfer valid. The court found the notices served ... Appeal Before AAC, Appeal To AAC, Best Judgment Assessment, Income Tax Act, Natural Justice, Writ Petition Issues Involved:1. Validity of the transfer of assessment jurisdiction.2. Adequacy of notice and opportunity provided to the petitioner.3. Maintainability of the writ petitions in light of alternative statutory remedies.4. Alleged breach of principles of natural justice.Detailed Analysis:1. Validity of the Transfer of Assessment Jurisdiction:The petitioner challenged the transfer of assessment jurisdiction from the Income-tax Officer, District VIII(9), New Delhi, to the Income-tax Officer, Special Circle IX, New Delhi, and subsequently to the Income-tax Officer, Khammam. The Delhi High Court quashed the initial transfer for being violative of section 127 of the Income-tax Act. However, the subsequent transfer to Khammam was at the petitioner's request and was deemed valid by the Delhi High Court. The court held that the transfer was in accordance with section 127 and did not require re-issuing notices already served by the previous officer.2. Adequacy of Notice and Opportunity Provided to the Petitioner:The petitioner argued that the notices under sections 142(1) and 143(2) were served on his secretary on May 4, 1973, with the hearing scheduled for the same day, which he claimed was inadequate. The court examined whether the petitioner had reasonable time and opportunity to comply with the notices. It was found that the petitioner had been given several opportunities to furnish the required information but failed to do so. The court noted that the petitioner had more than a year to compile the information since the last adjournment on January 10, 1972. The court concluded that the notices served were adequate and the petitioner had reasonable opportunity to comply.3. Maintainability of the Writ Petitions in Light of Alternative Statutory Remedies:The court discussed the doctrine of exhaustion of statutory remedies, emphasizing that the Income-tax Act provides a complete machinery for assessment and relief against improper orders. The court referred to several Supreme Court judgments, including Shivram Poddar v. Income-tax Officer and Champalal Binani v. Commissioner of Income-tax, to support the view that writ petitions should not be entertained when adequate alternative remedies are available. The court noted that the petitioner had already filed appeals under section 246, which were pending before the Appellate Assistant Commissioner. The court held that the petitioner had an adequate alternative remedy and that the writ petitions were not maintainable on this ground.4. Alleged Breach of Principles of Natural Justice:The central argument of the petitioner was that the assessment orders under section 144 were passed in violation of the principles of natural justice. The court examined whether the petitioner was given a reasonable opportunity to present his case. It was found that the petitioner had been given multiple opportunities to furnish the necessary information but had failed to do so. The court referred to the Supreme Court's ruling in Fedco (P.) Ltd. v. S. N. Bilgrami, emphasizing that the court is the final authority to determine the reasonableness of the opportunity provided. The court concluded that there was no breach of natural justice in this case.Conclusion:The court dismissed the writ petitions, holding that the petitioner had reasonable opportunities to present his case and that the assessment orders were valid. The court also emphasized the adequacy of alternative statutory remedies available to the petitioner, making the writ petitions untenable. The petitions were dismissed with costs, and the court awarded advocate's fees of Rs. 100 in each case.