2024 (12) TMI 388 - HC - Income Tax

Writ petition dismissed as statutory appeal remedy already invoked before CIT(A) remains pending

Mr. Vizovolie Nyekha Versus Union of India, The Chief Commissioner of Income Tax Assam, The Assessing Officer Income Tax Department National Faceless Assessment Centre, Income Tax Officer (ITO), Nagaland, Commissioner Of Income Tax (Appeals) Guwahati.

Mr. Vizovolie Nyekha Versus Union of India, The Chief Commissioner of Income Tax Assam, The Assessing Officer Income Tax Department National Faceless ... Issues Involved:1. Validity of the assessment order and demand notice issued against the petitioner.2. Maintainability of the writ petition in light of the pending statutory appeal.3. Applicability of tax exemption under Section 10(26) of the Income Tax Act for the petitioner.4. Availability and adequacy of alternative remedies under the Income Tax Act.Detailed Analysis:1. Validity of the Assessment Order and Demand Notice:The petitioner challenged the Assessment Order dated 31.03.2022, which was issued for the Assessment Year 2015-2016 under Section 147 of the Income Tax Act, following a notice under Section 148. The assessment resulted in a demand of Rs. 5,28,13,970/-, including tax, interest, and penalty. The petitioner argued that the assessment was incorrect, as they claimed exemption from income tax under Section 10(26) of the Income Tax Act, being a member of a Scheduled Tribe in Nagaland. The court acknowledged the petitioner's claim of exemption but did not delve into the merits of the assessment itself due to the pending appeal.2. Maintainability of the Writ Petition:The court examined whether the writ petition was maintainable given the pending statutory appeal before the Commissioner (Appeals). The Income Tax Department argued that the writ petition should not have been filed since the petitioner had already availed of the statutory remedy. The court agreed, emphasizing that the existence of an alternative remedy typically precludes the exercise of writ jurisdiction unless exceptional circumstances are demonstrated. The court cited precedents from the Apex Court, reinforcing the principle that writ jurisdiction is discretionary and should not bypass statutory mechanisms unless the alternative remedy is inadequate or ineffective.3. Applicability of Tax Exemption under Section 10(26):The petitioner contended that they were exempt from income tax under Section 10(26) of the Income Tax Act, as they belonged to a Scheduled Tribe in Nagaland. This claim was not disputed by the respondents. However, the court noted that this issue should be addressed within the framework of the statutory appeal, rather than through a writ petition, given the pending appeal process.4. Availability and Adequacy of Alternative Remedies:The court reiterated that the Income Tax Act provides a comprehensive mechanism for addressing grievances related to assessment orders, including appeals to the Commissioner (Appeals). The court highlighted that the petitioner had not demonstrated that the statutory remedy was inadequate or ineffective. The petitioner had already filed an appeal, which was pending, and the court emphasized that the petitioner should pursue this statutory route rather than seeking relief through a writ petition. The court also noted that the petitioner could seek exemption from the statutory deposit required for the appeal under Section 249(4) of the Income Tax Act.Conclusion:The court concluded that the writ petition was not maintainable due to the pending statutory appeal and the availability of an adequate alternative remedy. The petitioner was granted liberty to file necessary applications before the Commissioner (Appeals) to raise all grounds against the Assessment Order. The court disposed of the writ petition, allowing the interim order to continue for three weeks to enable the petitioner to file necessary documents before the Commissioner (Appeals).