The Bombay High Court has held that writ jurisdiction can’t be exercised when an alternate remedy of appeal is available u/s 246 of the Income Tax Act, 1961.
Falcon Retreat Private Limited, the petitioner challenged the four assessment orders dated 23 March 2022, passed by Respondent no.1 being assessment orders under Section 147 read with Sections 144 and 144-B of the Income Tax Act, 1961.
Consequent to the said assessment orders, notices are issued to the petitioners dated 11 August, 2022 to initiate penalty/recovery proceedings. Such notices are issued under Section 274 read with Section 271F of the Income Tax Act.
The petitioner is a private limited Company, that was directed to be wound up by an order passed by this Court dated 26 June 2009, in the proceedings of Company Petition No.19 of 2006, instituted by one “Shekhar Electricals”, one of the creditors of the petitioner. The case of the petitioner is that there were borrowings by the petitioner from the Economic Development Corporation and the State Bank of India.
It was contended that in the further proceedings almost after a period of nine years, the winding up order came to be recalled by an order dated 3 May 2018, passed by this Court. The case of the petitioner is that the assessment in question pertains to the period, during which the winding up proceedings against the petitioner was at large and subsisting when the petitioner was under the control of the Official Liquidator-respondent no.4.
The petitioner has contended that the business of the petitioner was admittedly at a stand still and the only relevant amounts which the Revenue has taken to be relevant were the amounts which were either lying in the escrow account and certain amounts which were deposited with the State Bank of India. The Revenue has inter alia added the income at the hands of the petitioners stating that the State Bank of India had deducted tax at source on the interest.
The Court observed that an alternative remedy of appeal is available to the petitioner which needs to be filed before the Commissioner of Income Tax (Appeals) as per the provisions of Section 246 of the Income Tax Act.
The Coram comprising Justice G. S. Kulkarni & Justice Bharat P Deshpande held that the petitioner needs to avail of the alternate remedy as available to the petitioner in law i.e. by filing an appeal before the Commissioner of Income Tax (Appeals).
While disposing of the petition, the petitioner was permitted to file an appeal assailing the impugned re-assessment orders before the Appellate Authority (Commissioner of Income Tax (Appeals)).
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
