Await Outcome of Statutory Appeal Before Approaching Writ Court: Madras HC dismisses Writ Petition against Income Tax Proceedings [Read Order]

In a recent ruling, the Madras High Court dismissed the writ petition against income tax proceeding directing the petitioner to wait for the outcome of the statutory appeal filed before approaching the high court.

In this matter, the petitioner Senthilkumar filed a writ petition before this high court with regards to the reassessment under the Income Tax Act, 1961, which resulted in total liability of Rs.2,13,88,002/- being recovered from the petitioner.

The counsel of the petitioner, Mr. V. Arun Pandian submitted that the petitioner was selected for re-assessment based on the risk management strategy, and the assessment process was initiated by issuance of a notice under Section 148 of the Income Tax Act for the financial year 2017-2018 [Assessment year 2018-19].

Understanding Income Tax Bill, 2025 Click here

It was argued that the inability to set the taxable amount for assessment, which makes the order of assessment incomplete and legally invalid. Additionally, it also argued that the jurisdictional officer who made the notice under Section 148 of the Income Tax Act is not competent to cause reassessment under Section 147 of the Income Tax Act, as all re-assessments are required to be carried out by the faceless authority under the provisions of Section 151A of the Income Tax Act and the Scheme for National Faceless Assessment that came into effect from 01.04.2021.

The petitioner's counsel vehemently contended that the procedural requirement of reassessment under a faceless system was obligatory, and any deviation from it made the entire proceeding defective. On these premises, the petitioner prayed for the quashing of the impugned assessment order as well as all connected proceedings on the grounds of jurisdictional error and failure to comply with statutory provisions.

Responding to the same, the Senior Standing Counsel for the income tax department mentioned that the petitioner had already made an appeal against the challenged assessment order and that the appeal was pending before the competent appellate authority. The petitioner was hence under an obligation to follow the appeal avenue and to exhaust the available statutory remedy before approaching the writ jurisdiction of the High Court.

Tax Planning – Practical Aspects Click here

Having heard both sides, the bench of Justice Vivek Kumar Singh restated the established legal principle that where an appeal is pending before the competent authority, the writ petition is not sustainable except in the presence of exceptional circumstances, which were not present here.

The Court asserted the doctrine of judicial discipline and non-admissibility of concurrent proceedings where a co-terminus statutory remedy has been invoked. It further explained that the petitioner's objections on issues of jurisdiction and procedural infirmity could also effectively be disposed of within the appeals process.

The bench held no grounds to interfere at this juncture with the assessment and rejected the writ petition. The petitioner was instructed to proceed with the appeal proceedings before the first respondent in accordance with law. The Court also directed closure of all related miscellaneous petitions, without any order as to costs.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscanpremium. Follow us on Telegram for quick updates