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2025 (4) TMI 999 - HC - Income TaxAssessment order u/s 143 (3) read with Section 144B - HELD THAT - In the present case personal hearing was offered to the petitioner but the petitioner s representatives could not avail of the same. In the case of Oberoi Constructions Ltd. Vs. Union of India Ors. 2024 (11) TMI 588 - BOMBAY HIGH COURT we discussed several precedents regarding the exhaustion of alternate remedies. They apply to the facts of the present case. This is not a fit case to deviate from the standard rule of exhaustion alternate remedies. All contentions now raised by the petitioner can be better adjudicated before the Appellate Authority and no extraordinary circumstances have been made out to bypass statutory remedies and entertain this petition. Accordingly by adopting the reasoning in the above case we decline to entertain this petition and dismiss the same. The petitioner will have the liberty to avail of the alternate remedy before the Appellate Authority. Besides if the petitioner seeks any interim reliefs we are sure that the appropriate authority will consider such an application in accordance with the law and dispose of such application as expeditiously as possible. The observations in this order are only in the context of the non-exhaustion of alternate remedies. Therefore the Appellate Authority or the Authority entertaining the application for interim relief need not be influenced by such observations. The appellate Authority and other authorities taking up the application for interim relief are left free to decide all parties contentions on merits.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Court in this petition include:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Maintainability of the Petition Without Exhaustion of Alternate Remedies Relevant Legal Framework and Precedents: The Income-tax Act, 1961, provides for a statutory appellate mechanism to challenge assessment orders, including appeals to the Commissioner (Appeals) and further to the Tribunal. The principle of exhaustion of alternate remedies is well-established, requiring a party to utilize the prescribed statutory remedies before approaching the High Court by way of writ petition or other extraordinary reliefs. The Court relied on the precedent set in Oberoi Constructions Ltd. Vs. Union of India & Ors., which emphasized adherence to this principle. Court's Interpretation and Reasoning: The Court observed that the petitioner had not exhausted available alternate remedies before approaching the High Court. It was held that all contentions raised by the petitioner could be more appropriately adjudicated by the Appellate Authority. No exceptional circumstances were demonstrated that would justify bypassing the statutory appellate process. Application of Law to Facts: The petitioner's reliance on the High Court's intervention was found premature. The Court held that the statutory appellate process should be followed, and the petition was dismissed on this ground. Treatment of Competing Arguments: The petitioner argued for direct judicial intervention, but the Court reaffirmed the need to respect the statutory framework and the principle of exhaustion of alternate remedies. Conclusion: The petition was dismissed for non-exhaustion of alternate remedies, with liberty granted to the petitioner to pursue the appellate process. Issue 2: Alleged Breach of Principles of Natural Justice Relevant Legal Framework and Precedents: The principles of natural justice require that a person affected by an administrative or quasi-judicial order be given a fair opportunity to be heard. The Court referred to the decision in Bhogin Danabhai Patel Vs. The National Faceless Assessment Centre & Ors., where the absence of personal hearing led to the writ petition being entertained. Court's Interpretation and Reasoning: The Court examined the facts surrounding the petitioner's request for a hearing through videoconferencing and an adjournment application. The impugned order explicitly recorded that videoconferencing was offered. Although the petitioner's representative could not attend due to other commitments, and the adjournment application was uploaded, it was not clear if the request was adequately pressed. The Court held that a prima facie case of blatant breach of natural justice was not established. Key Evidence and Findings: The assessment order's record of offering videoconferencing and the absence of clear evidence of denial of opportunity were crucial. The Court noted that an investigation into the factual circumstances would be necessary to determine any breach. Application of Law to Facts: Since the petitioner had an opportunity for hearing, and videoconferencing was offered, the Court found no outright violation of natural justice principles at this stage. Treatment of Competing Arguments: The petitioner's counsel contended that the order was passed without considering the adjournment request, amounting to breach of natural justice. The Court, however, indicated that such contentions could be better examined by the Appellate Authority with the benefit of investigation. Conclusion: No conclusive breach of natural justice was found; the issue was left open for adjudication by the Appellate Authority. Issue 3: Effect of Prior Tribunal Rulings in Favor of the Petitioner Relevant Legal Framework and Precedents: The principle of res judicata or the binding effect of prior judicial or quasi-judicial decisions may be relevant. However, each assessment year is treated independently under the Income-tax Act. Court's Interpretation and Reasoning: The Court acknowledged that the Tribunal had ruled in favor of the petitioner for the previous assessment year. However, it noted that this matter was already under appeal before the Court and that the present assessment order considered this aspect. Application of Law to Facts: The Court held that prior favorable rulings for a different assessment year do not automatically invalidate the present assessment order. Treatment of Competing Arguments: The petitioner relied on the prior Tribunal ruling to challenge the current order. The Court found that this contention required further investigation and was not a ground for immediate relief. Conclusion: The prior Tribunal ruling did not conclusively affect the present assessment order; the issue was to be examined in the appellate process. Issue 4: Provision of Personal Hearing and Videoconferencing Facility Relevant Legal Framework and Precedents: The Income-tax Act and procedural rules mandate that an assessee be given an opportunity for personal hearing. The Court referred to the Bhogin Danabhai Patel case where denial of personal hearing was a ground for judicial intervention. Court's Interpretation and Reasoning: The Court found that videoconferencing was offered to the petitioner, and the petitioner's representative's inability to attend was due to other commitments. The adjournment application was uploaded but not clearly pressed. Thus, the Court did not find a denial of personal hearing. Application of Law to Facts: The petitioner was not denied the opportunity for hearing; rather, the petitioner's representatives failed to avail themselves of the offered facility. Treatment of Competing Arguments: The petitioner argued that the failure to consider the adjournment request amounted to breach of natural justice. The Court held that this required investigation and could be addressed in appeal. Conclusion: The Court did not find a violation of the right to personal hearing or videoconferencing facility. Issue 5: Grant of Interim Relief and Directions Regarding Hearing Facilities Relevant Legal Framework: The Court has the power to grant interim reliefs and issue directions to ensure fair hearing. Court's Interpretation and Reasoning: The Court clarified that if the petitioner seeks interim relief or a hearing through videoconferencing before the Appellate Authority or other appropriate authorities, such requests shall be granted. Application of Law to Facts: The Court left open the possibility of interim relief and directed authorities to consider such applications expeditiously and in accordance with law. Conclusion: The petitioner is entitled to request and be granted hearing facilities including videoconferencing during appellate proceedings. 3. SIGNIFICANT HOLDINGS "
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