Delhi High Court Declines Writ On Jurisdiction Issue As Statutory Appeal Against Assessment Order Is Pending

The Delhi High Court has declined to exercise its writ jurisdiction in a challenge concerning the jurisdiction of an Income Tax Officer to pass an assessment order, noting that the assessee had already availed the statutory remedy of appeal against the assessment order and the appeal had been pending before the Commissioner of Income Tax (Appeals) since January 2020.

The Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta, however, requested CIT(A) to decide the pending appeal within two months.

The Court was hearing a writ petition challenging an assessment order dated December 31, 2019, passed under Section 143(3) of the Income Tax Act, 1961.

At the outset, Revenue raised a preliminary objection that the assessment order was already under challenge in a statutory appeal before the CIT(A), which had been pending since January 24, 2020.

It was argued that Petitioner-assessee could not simultaneously pursue the statutory appeal and a writ petition before the High Court.

Petitioner on the other hand argued that it had approached the High Court specifically on the issue of jurisdiction.

It was pointed out that the High Court had already ruled in Petitioner's favour on the jurisdictional question in its judgment dated May 8, 2024 in an earlier proceeding concerning Assessment Year 2015-16. It was therefore argued that the pendency of the statutory appeal should not prevent the assessee from invoking the writ jurisdiction.

For context, in the May 8, 2024 judgment in the assessee's own case, the Delhi High Court had examined whether an assessment could be conducted by a non-jurisdictional Assessing Officer in the absence of a transfer order under Section 127 of the Income Tax Act.

The Court had held that where a case had been transferred from an Assessing Officer having jurisdiction over the assessee to another Assessing Officer who otherwise did not have jurisdiction under Sections 120 and 124, a transfer order under Section 127 was mandatory. Without such an order, jurisdiction could not be conferred on the other Assessing Officer to pass an assessment order.

In that case, the assessee's assessment had been centralised with the DCIT, Central Circle-16/20, New Delhi from Assessment Year 2008-09 onwards.

The Court found that no valid decentralisation or Section 127 transfer order had been produced to establish the subsequent transfer of the case to ITO Ward 21(1), New Delhi. It consequently set aside the assessment orders dated December 31, 2017 and September 30, 2021 on the ground of jurisdictional error.

In the present case, the High Court noted that Petitioner had already availed the statutory remedy of appeal and thus declined to exercise jurisdiction.

For Petitioner: Advocates N.P. Sahni, Ragini Handa and Sameer Chopra

For Respondent: Ruchir Bhatia, SSC with Anant Mann, JSC & Pratyuksh Gupta, JSC.