M/S.saravana Stocks Investments Pvt. Ltd.,New v. Assistant Commissioner Of Income Taxcompany Circle – Vi (1)

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 12.07.2021 M/s.Saravana Stocks Investments Pvt. Ltd.,New No.6, Old No.29, Second Main Road,CIT Nagar, Mylapore,Chennai 600 004.Rep. By its Director,Mr.D.Sathyamoorthi,Son or Mr.Devarajulu..Petitioner Vs. Assistant Commissioner of Income TaxCompany Circle – VI (1),121, Nungambakkam High Road,Chennai 600 034...Respondent Prayer: Writ Petition filed under Article 226 of theConstitution of India, to issue a Writ of Certiorari, callingfor the records in P.A.No.AAAICS7328C dated 13.11.2014, relatingto the Assessment Year 2006-07, on the file of the respondent,quash the same. The order of assessment dated 13.11.2014, passed underSection 143 (3) read with Section 147 of the Income Tax Act,1961 (hereinafter referred to as, 'the Act'), is under challengein this Writ Petition. The assessment order was passed withreference to the Assessment Year 2006-07. The petitioneris a regular assessee and filed Return of Income. The learnedcounsel for the petitioner made a submission that the regularassessment was made based on the materials, books of accountsand informations provided by the assessee and was concluded.However, the reopening of assessment proceedings were initiatedon change of opinion and therefore, the petitioner has chosen toapproach this Court. The learned counsel for the petitioner https://hcservices.ecourts.gov.in/hcservices/ reiterated that the Hon'ble Supreme Court of India granted stayon 14.11.2014, stating that stay will be in force if theassessment orders are not passed. However, the assessment orderwas passed on 13.11.2014 and the learned counsel for thepetitioner states that it was antedated, in view of the factthat the assessment order was despatched on 15.11.2014. However,this Court cannot go into those facts with reference to theinterim order passed by the Hon'ble Supreme Court of India. 2.The fact remains that the assessment order is underchallenge in the present Writ Petition. Admittedly, it is anappealable order. The learned counsel for the petitioner made asubmission that reopening of assessment is made based on changeof opinion and not on any tangible materials. Thus, theassessment order itself is perverse and not in consonance withthe conditions stipulated under Sections 147 and 148 of the Act. 3.This Court is of the considered opinion that the meritspart of the assessment order need not be gone into by the HighCourt at this point of time, as the appeal remedy provided underthe Act is efficacious. The appellate authority is the finalfact finding authority. The High Court cannot adjudicatedisputed facts with reference to certain transactions. If at allthe initiation of 147 proceedings are initiated on change ofopinion and an assessment order is passed, then also, theassessee is at liberty to raise all such grounds, including theground of change of opinion and not based on reason to believe. 3.This Court is of the considered opinion that the meritspart of the assessment order need not be gone into by the HighCourt at this point of time, as the appeal remedy provided underthe Act is efficacious. The appellate authority is the finalfact finding authority. The High Court cannot adjudicatedisputed facts with reference to certain transactions. If at allthe initiation of 147 proceedings are initiated on change ofopinion and an assessment order is passed, then also, theassessee is at liberty to raise all such grounds, including theground of change of opinion and not based on reason to believe. 4.The order of assessment would reveal that certainmaterials, informations, based on the reopening of assessmentwas considered and order was passed. Thus, finding in theassessment order impugned require an adjudication with referenceto the original records available. Such an adjudication cannotbe done by the High Court in a writ proceedings under Article226 of the Constitution of India. Certain intricacies andexpertise in the matter of accountancy are to be considered bythe appellate authorities and it may not be appropriate on thepart of the High Court at this juncture to venture into thedisputed transactions as well as the other materials availableon record. Thus, the final fact finding by the appellateauthority would be of assistance for the purpose of exercise ofthe power of judicial review by the High Court under Article 226of the Constitution of India. Thus, exhausting the appellateremedy is of paramount importance and at no circumstances, beundermined. In the event of adjudication of the facts andcircumstances, which all are disputed in a writ proceedings, theaggrieved persons are deprived of an opportunity of gettingredressal through the appeals which is contemplated under thestatute. The appeals are provided with a legislative intentionto provide an effective adjudication by the higher authority with reference to the documents and evidences. Therefore, such avaluable opportunity is to be provided to an aggrieved assesseein all circumstances. In the event of any finding by the HighCourt in a writ proceedings based on the affidavits filed by therespective parties, there is a possibility of error orcommission or omission. Such error or commission would lead tomiscarriage of justice on some occasions. Thus, these aspectsare to be considered by the High Court, while dispensing withthe appellate remedy provided under the statute, which all arevaluable and has got a specific meaning and intention. 5.Preferring an appeal is the rule. Entertaining a WritPetition before exhausting the appellate remedy is an exception.Undoubtedly, writ proceedings may be entertained beforeexhausting the appellate remedy. However, it is to be ensuredthat there is an imminent threat or gross injustice warrantingurgent relief to be granted. Mere violation of principles ofnatural justice is insufficient to entertain a writ proceedingsunder Article 226 of the Constitution of India, as every WritPetition is filed based on one or the other ground stating thatthe principles of natural justice is violated or statutoryrequirements are not complied with or there is an illegality orotherwise. Thus, dispensing with an appellate remedy is to begranted cautiously in view of the fact that the very purpose andobject of legislation providing an appellate remedy cannot bediluted nor the benefit be denied to the aggrieved person toexhaust the same. The statutory appellate authorities are thefinal fact finding authorities. Thus, the finding to be made bysuch appellate authorities with reference to the documents andevidences are of paramount importance for the purpose ofexercise of judicial review by the High Court under Article 226of the Constitution of India. 6.The power of judicial review of the High Court underArticle 226 of the Constitution of India is to scrutinize theprocesses through which a decision is taken by the competentauthority by following the procedures as contemplated, but notthe decision itself. Therefore, the routine entertainment of aWrit Petition by dispensing with appellate remedy is notpreferable and such an exercise would cause injury to theinstitutional hierarchy and the importance attached to suchappellate institutions. The appellate institutions providedunder the statute at no circumstances be undermined by thehigher Courts. The appellate forums are the final fact findingauthorities and more so, possessing expertise in a particularfield. Thus, the finding of such appellate forums would be avaluable assistance for the purpose of exercise of judicialreview by the High Court under Article 226 of the Constitutionof India. The High Court cannot conduct a roving enquiry withreference to the facts and circumstances based on the documents and evidences. Based on the mere affidavits filed by thelitigants, the disputed facts cannot be concluded. Thus, theimportance of fact finding by the appellate forums is of morevalue for the purpose of providing complete justice to theparties approaching the Court of law. 7.The point of delay may be an acceptable ground for thepurpose of entertaining a Writ Petition. The practise of filingthe Writ Petition without exhausting the statutory remedies arein ascending mode and such Writ Petitions are filed with a viewto avoid pre-deposits to be made in statutory appeals and on theground that the appellate remedies are time consuming. 8.This being the factum established, the petitioner is atliberty to prefer an appeal before the appellate authorityhaving jurisdiction within a period of four weeks from the dateof receipt of a copy of this order. In the event of filing anysuch appeal, the appellate authority is bound to adjudicate thesame on merits and in accordance with law and by affordingopportunity to the writ petitioner and dispose of the appeal asexpeditiously as possible. With this direction, the Writ Petition stands disposed of.No costs. Consequently, connected Miscellaneous Petition isclosed. Sd/- Assistant Registrar(CS) //True Copy// gsa Sub Assistant Registrar To 1. The Assistant Commissioner of Income Tax Company Circle – VI (1), 121, Nungambakkam High Road, Chennai 600 034. 2.The Section officer,English Record section,High court, Madras. +1cc to M/s.A.P.Srinivas,Advocate, SR No.32556+1cc to M/s.G.Baskar,Advocate, SR No.32723 W.P.No.30980 of 2014 GMI(CO) B.VC (04/08/2021)