WATER WORLD TOURISM COMPANY PVT. LTD. vs. THE ASST. COMMISSIONER OF INCOME TAX
What did the High Court hold?
The High Court held that the remedy for a person aggrieved by an order of assessment is to prefer an appeal in accordance with the statutory scheme. The scope of interference by the High Court under Article 226 is very limited and can only be invoked in exceptional circumstances, such as violations of natural justice, acting in excess of jurisdiction, or challenges to constitutional validity and breaches of fundamental rights. The Court found that none of these exceptional circumstances existed in the present case. The petitioner's contention that the failure to consider a binding decision is itself a ground for invoking Article 226 was rejected, as this contention can be raised before the appellate authority. The Court noted that a challenge against an assessment order requires appreciation of facts, especially when there are disputed facts, which is not suitable for writ jurisdiction. Therefore, the Court declined to exercise its extraordinary jurisdiction under Article 226.
What were the facts?
The petitioner, M/s. Water World Tourism Company Pvt. Ltd., is challenging an assessment order dated 17.09.2021 issued by the 3rd respondent, the National Faceless Assessment Centre, Delhi. The petitioner's primary argument for invoking the High Court's jurisdiction under Article 226 of the Constitution is that the assessing authority failed to consider a binding judgment of the Bombay High Court in Commissioner of Income Tax v. Smt. Godavaridevi Saraf [1978] 113 ITR 589. The petitioner contends that this failure, and the reasoning provided for ignoring the judgment, were perverse. The respondents are the Assistant Commissioner of Income Tax, the Deputy Commissioner of Income Tax, and the National Faceless Assessment Centre.
What were the issues?
1. Whether the failure of an assessing authority to consider a binding judgment of a High Court, and its reasoning for ignoring it, constitutes a sufficient cause for invoking the writ jurisdiction under Article 226 of the Constitution of India, thereby warranting interference with the assessment order. Assessee's Contention: The petitioner argued that the assessing authority's failure to consider the binding judgment of the Bombay High Court in Commissioner of Income Tax v. Smt. Godavaridevi Saraf [1978] 113 ITR 589, and its perverse reasoning for ignoring it, are grounds for invoking the extraordinary jurisdiction under Article 226 of the Constitution. Revenue's Contention: The revenue, represented by Adv. Jose Joseph, did not explicitly record arguments in the judgment regarding the merits of the petitioner's claim about the binding judgment. However, the Court's reasoning implies that the revenue's stance, as understood by the Court, is that statutory remedies should be pursued.
Which sections of the Income-tax Act were involved?
Article 226
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
JUDGMENT Petitioner is an assessee under the Income Tax Act, 1961. Petitioner challenges the assessment order dated 17.09.2021 issued by the 3rd respondent assessing authority.
The main contention raised by the petitioner for invoking the juri iction of this Court under Article 226 of the Constitution of India is that the assessing authority failed to consider the binding judgment of the Bombay High Court in Commissioner of Income Tax v. Smt.Godavaridevi Saraf [1978] 113 ITR 589. According to the petitioner, failure to consider a binding judgment is a sufficient cause for invoking the remedy under Article 226 of the Constitution of India and that the reasoning of the assessing
WP(C) NO. 22618 OF 2021 3 authority for ignoring the said judgment was itself perverse.
I have heard the arguments of Adv.Harisankar V.Menon, the learned counsel for the petitioner as well as Adv.Jose Joseph, the learned Standing Counsel for the contesting respondents.
The remedy of a person aggrieved by an order of assessment is to prefer an appeal in accordance with the statutory scheme. The scope of interference by this Court under Article 226 is very limited. The juri iction under Article 226 can invoked only in exceptional circumstances; like violation of the principles of natural justice, acting in excess of juri iction, or when there is a challenge to the constitutional validity of provisions and breach of fundamental rights (see judgment in Assistant Commissioner of State Tax and others v. Commercial Steel Limited [(2021) SCC online SC 884]. None of WP(C) NO. 22618 OF 2021 4 the circumstances mentioned above exists in the instant case.
The contention of the learned counsel for the petitioner that failure to consider the binding decision rendered by the Bombay High Court is itself is a ground that can be raised by the petitioner before the appellate authority.
Challenge against the order of assessment requires an appreciation of facts, that too, when there are disputed facts, as in the present case.
In such circumstances, there is no reason to exercise the extra ordinary juri iction under Article 226 of the Constitution of India. The writ petition is, therefore, dismissed. However, the petitioner is at liberty to pursue his statutory remedies in accordance with law. BECHU KURIAN THOMAS, JUDGE AMV/23/10//2021
WP(C) NO. 22618 OF 2021 5
Appendix — schedule of exhibits
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