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2020 (1) TMI 356 - HC - Income TaxAlternative remedy available to the writ applicant by preferring an appeal before the CIT (Appeals) - Section 44AD applicability - best judgement assessment u/s 144 - Rate of profit determination - HELD THAT:- Having regard to the basic infirmity in the impugned order passed by the Assessing Officer, we are of the view that we should not reject this writ application only the ground that the writ applicant has an alternative efficacious remedy of preferring an appeal before the CIT (Appeals). As decided in CHHABIL DASS AGARWAL [2013 (8) TMI 458 - SUPREME COURT] although the Act provides complete machinery for the assessment / reassessment of tax, imposition of penalty and for obtaining relief in respect of any improper orders passed by the Revenue Authorities, yet the remedy under the statute, however, must be effective and not a mere formality with no substantial relief. It is true that when a statutory forum is created by law for redressal of grievance, a writ petition should not be entertained ignoring the statutory dispensation. But, such principles, in a given case, may be given a go bye, if the Court is convinced that on the face of it, the impugned order is not sustainable in law. We are of the view that we should look into the matter on merits while overruling the preliminary objection raised on behalf of the Revenue. We are convinced that the impugned order passed by the Assessing Officer is not sustainable in law. We once again fall back on the directions issued by the Appellate Tribunal. The directions are plain and simple. The Tribunal takes the view that Section 44AD of the Act is not applicable. It directed the assessee to attend the assessment proceedings and justify its case on lower rate of profit in accordance with its books of account. The Assessing Officer was directed to verify the same and decide the issue a fresh (the Tribunal says that “decide the issue a fresh” means the issue with regard to the claim of lower rate of profit). If the appeal would have been dismissed without there being any direction of remitting the matter to the Assessing Officer, then the effect would have been as if the Tribunal has accepted that the case would fall within the Section 44AD of the Act thereby justifying 8% rate of profit. Here is a case where the Assessing Officer, by its impugned order, has absolutely created new liability for the writ applicant and that too, contrary to the directions issued by the Appellate Tribunal. For the foregoing reasons, we are convinced that the impugned order passed by the Assessing Officer is not sustainable in law. In the result, this writ application succeeds and is hereby allowed. The matter is remitted to the Assessing Officer for fresh consideration of the issue as specifically directed by the Appellate Tribunal. We once again clarify that the Assessing Officer now needs to reconsider the issue with regard to claim of the writ applicant for lower rate of profit and not at the rate of 8%.
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