2026 (3) TMI 820 - HC - Income Tax

Writ Jurisdiction: not maintainable where an efficacious statutory appeal exists; no exceptional natural justice breach found.

The HC considered whether Article 226 writ relief is maintainable despite an efficacious statutory appeal under the Income tax Act and whether the ... Order passed u/s 143(3) r/w Section 144B - Availability of efficacious alternative remedy under the Income-tax Act - unsuitability of writ jurisdiction to adjudicate disputed questions of fact in assessment proceedings HELD THAT: - The Court held that the Income-tax Act constitutes a self-contained code providing machinery for assessment, reassessment and remedies, and that the existence of an adequate and efficacious statutory appeal procedure ordinarily precludes interference under Article 226. Reliance was placed on the principle in CIT v. Chhabil Dass Agarwal [2013 (8) TMI 458 - SUPREME COURT] that the High Court must not entertain a writ petition when an effective alternative remedy exists unless exceptional circumstances or violation of fundamental judicial procedure are shown. The learned Single Judge correctly declined to entertain the petition because the appellant had not availed the statutory remedy and no exceptional circumstance warranting departure from the rule was made out. [Paras 5, 9, 10, 11] The writ petition was declined for want of necessity to invoke Article 226 in presence of an available appeal remedy under the Act. Suitability of writ jurisdiction to adjudicate disputed questions of fact in assessment proceedings - Disputed factual issues arising from an assessment under Section 143(3) read with Section 144B are not amenable to resolution in writ proceedings - HELD THAT: - The Court observed that the impugned order was an assessment order under Section 143(3) read with Section 144B and that the core controversy concerned factual disputes-whether invoices were furnished and whether transactions were with a proprietary concern (HUF) or an individual. Such fact-sensitive questions cannot be gone into in exercise of writ jurisdiction and are more appropriately resolved in the statutory appellate forum. [Paras 7, 8, 9, 11] The writ forum will not delve into disputed factual issues arising from the assessment order; the statutory appellate remedy is the appropriate forum. Final Conclusion: The High Court affirmed refusal to interfere with the assessment order: the appellant had an efficacious statutory remedy which was not availed and the matters raised involved disputed questions of fact unsuitable for adjudication in writ jurisdiction; the writ appeal is dismissed. Issues: (i) Whether a writ petition under Article 226 is maintainable when an efficacious alternative remedy of appeal exists under the Income-tax Act, 1961; (ii) Whether the assessment order dated 19.03.2024 suffered such violation of principles of natural justice as to warrant exercise of writ jurisdiction.Issue (i): Whether a writ petition under Article 226 is maintainable when an efficacious alternative remedy of appeal exists under the Income-tax Act, 1961.Analysis: The Income-tax Act, 1961 provides a statutory appellate mechanism including an appeal under Section 250. The assessment was passed under Section 143(3) read with Section 144B. The matters in dispute relate to factual questions concerning production of invoices and the character of the transactions. Established precedent recognises that writ jurisdiction is a discretionary, extraordinary remedy and ordinarily ought not to be invoked where an adequate and efficacious alternative statutory remedy exists, absent exceptional circumstances.Conclusion: The writ petition is not maintainable in the presence of an efficacious alternative remedy under the Income-tax Act, 1961.Issue (ii): Whether the assessment order dated 19.03.2024 suffered such violation of principles of natural justice as to warrant exercise of writ jurisdiction.Analysis: The assessing authority recorded that opportunity was afforded to produce invoices and that the appellant failed to do so; the respondents asserted the transactions concerned a proprietary concern (HUF) and involved disputed facts. The dispute is fact-intensive and there was no finding of total disregard of statutory procedure or a demonstrated exceptional breach of natural justice in the material on record.Conclusion: There are no exceptional circumstances or proven violation of principles of natural justice that would justify interference by writ jurisdiction in this matter.Final Conclusion: The appropriate statutory remedy under the Income-tax Act, 1961 is available and effective; disputed factual questions and the absence of exceptional circumstances preclude exercise of writ jurisdiction under Article 226.Ratio Decidendi: Where a self-contained statutory scheme provides an adequate and efficacious remedy for challenging an assessment, and no exceptional circumstances or demonstrable violation of principles of natural justice exist, writ jurisdiction under Article 226 should not be exercised in lieu of the statutory appellate remedy.