2025 (12) TMI 1806 - HC - Income Tax

Writ jurisdiction limited where detailed tax assessment raises factual disputes; pursue statutory appellate remedy for merits determination.

High Court refused to exercise writ jurisdiction to interfere with a detailed income tax assessment where contested factual questions and evidentiary ... Validity of order passed u/s 143(3) r/w Section 144B - addition of ‘unexplained expenses’ - Judicial interference under Article 226 in assessment orders involving disputed questions of fact HELD THAT: - The Court held that the impugned assessment order was a detailed order which had considered the petitioner's submissions and that the question whether the purchases were genuine raised disputed questions of fact which are to be decided by the Appellate Authority under Section 250 of the Act. In view of these factual disputes and the availability of the statutory appellate remedy, interference under Article 226 was declined. [Paras 9, 10, 11] The writ petition is not a forum for reappraisal of disputed factual issues in the assessment and the High Court declined to interfere with the assessment order. Appellate remedy under Section 250 and competence of appellate authority to decide disputed facts - Direction to entertain appeal on merits without reference to limitation - HELD THAT: - The Court granted the petitioner liberty to file an appeal against the impugned assessment order within 30 days from receipt of the order and directed that if such appeal is filed, the Appellate Authority shall dispose of it on merits without reference to limitation, thereby leaving the factual controversies to the appellate process for adjudication. [Paras 12, 13] Liberty to file an appeal within 30 days; appellate authority to decide the appeal on merits without reference to limitation. Final Conclusion: The High Court declined to interfere under Article 226 with the detailed assessment order for Assessment year 2022-2023, observed that disputed questions of fact must be decided by the Appellate Authority under Section 250, and granted liberty to file an appeal which the Appellate Authority shall decide on merits without reference to limitation. Issues: (i) Whether the High Court should interfere under Article 226 of the Constitution with the assessment order passed under Section 143(3) read with Section 144B of the Income-tax Act, 1961 for the assessment year 2022-2023; (ii) Whether the petitioner's reliance on the Return of Income filed by a related HUF (as support for the transactions) justifies interference with the impugned assessment order.Issue (i): Whether the High Court should exercise writ jurisdiction under Article 226 to interfere with a detailed assessment order passed under Section 143(3) read with Section 144B of the Income-tax Act, 1961 when contested factual questions remain and an appellate remedy exists.Analysis: The Court examined the scope of judicial review under Article 226 in tax assessment matters and noted that the impugned order is a detailed assessment order addressing submissions. The presence of several disputed questions of fact and the availability of an appellate remedy under Section 250 of the Income-tax Act, 1961 were held to be material. In such circumstances, interference by the High Court is limited where factual determinations and appreciation of evidence are involved and are better suited for consideration by the appellate authority.Conclusion: The High Court declined to interfere with the assessment order under Article 226. The petitioner was granted liberty to pursue appeal before the Appellate Authority.Issue (ii): Whether the petitioner's reliance on the Return of Income of a related HUF, and the contention that invoices were raised in a proprietary concern though supplies were by the HUF, warranted interference with the assessment order.Analysis: The Court considered the petitioner's contention that supplies were reflected in the HUF's return though invoices were in the name of the proprietary concern. The Court held that such factual contentions implicate evidentiary and factual issues which were not appropriate for resolution in writ jurisdiction; these matters require adjudication on merits by the Appellate Authority under Section 250.Conclusion: The petitioner's reliance on the HUF's return did not provide a ground to disturb the impugned assessment order; the matter was left to be decided by the Appellate Authority.Final Conclusion: The writ petition is dismissed without interference with the assessment order; the petitioner is permitted to file an appeal before the Appellate Authority under Section 250 of the Income-tax Act, 1961 within 30 days and the Appellate Authority shall decide the appeal on merits expeditiously without reference to limitation.Ratio Decidendi: Where a detailed tax assessment order raises disputed questions of fact and an effective statutory appellate remedy exists, the High Court will not ordinarily interfere under Article 226 and such factual disputes should be adjudicated by the appellate authority.