Income Tax Petitions Dismissed for Lack of Exhaustion of Statutory Appeal

The High Court of Jharkhand dismissed two writ petitions challenging income tax notices for the assessment year 2010-11 under Section 148 of the Income Tax Act, 1961. The Court held that since the petitioners had not exhausted the alternative remedy of appeal available under the statute, their writ petitions under Article 226 of the Constitution of India were not maintainable. The petitioners were given the liberty to pursue the statutory remedy of appeal within a specified timeframe, emphasizing that all issues could be raised before the appellate authority.

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Issues:
- Maintainability of writ petitions under Article 226 of the Constitution of India due to the availability of alternative remedy of appeal.

Analysis:
The judgment by the High Court of Jharkhand involved writ petitions under Article 226 of the Constitution of India challenging notices issued under Section 148 of the Income Tax Act, 1961 for the assessment year 2010-11. The petitioners sought to quash the notices and the assessment order, claiming that the assumption of jurisdiction under Section 147 of the Act was void. The revenue argued that the writ petitions were not maintainable as the order of assessment could be appealed, and the factual aspects were better suited for the appellate authority. The petitioners contended that the notices were not in compliance with the judgment in GKN Driveshafts (India) Ltd. vs. Income Tax Officer & Ors., (2003) 1 SCC 72.

The High Court considered the submissions and noted that the petitioners had not filed returns or objections as per the prescribed procedure outlined in the GKN Driveshafts case. The revenue emphasized that the petitioners had not followed the proper course of action as directed by the Supreme Court. The Court observed that various factual aspects were raised by the petitioners concerning the notices, reassessment orders, and demand notices issued. Referring to the decision in Commissioner of Income Tax & Ors. v. Chhabil Dass Agarwal, (2014) 1 SCC 603, the Court highlighted that the Act provided a complete machinery for assessment and relief, and the petitioners had not exhausted the alternative remedy of appeal.

Based on the Supreme Court's decision in Commissioner of Income Tax & Ors. v. Chhabil Dass Agarwal, the High Court concluded that the petitioners had not provided sufficient reasons to invoke the extraordinary jurisdiction under Article 226 of the Constitution of India. The Court held that since the alternative remedy of appeal was available under the statute, it was not appropriate for the Court to entertain the writ petitions. Consequently, both writ petitions were dismissed, with the petitioners given the liberty to avail the statutory remedy of appeal within a specified timeframe. The Court emphasized that the petitioners could raise all issues before the appellate forum as per the law.

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