A writ petition challenging an order of a statutory authority should not be entertained when an alternative remedy of appeal is available to the petitioner.

( 1 ) AN important question repeatedly raised before the Admission Benches of the High Courts is whether and if so when a writ petition challenging the validity of an order of a statutory authority should be entertained even though a statutory appeal is provided against the said order but is not availed of by the petitioner.

( 2 ) THIS and the connected writ petition (civil writ 781 of 1974) each challenges the validity of an order of the Additional Commissioner of Income-tax passed under section 263 of the Income Tax Act, 1961 cancelling the order of assessment made by the Income-Tax Officer and asking the Income Tax Officer to make a fresh assessment. These orders were appealable under section 253 of the said Act to the Income Tax Appellate Tribunal but neither have they been appealed against nor has any explanation been given in the writ petitions as to why the petitioners chose not to file appeals but to file these writ petitions.

( 3 ) THE challenge to the impugned orders is two-fold, namely, (a) that the conditions to be fulfilled before the Additional Commissioner could assume jurisdiction under section 263 to revise the orders of the Income Tax Officer were not fulfilled; and (b) that on merits the orders of the Income Tax Officers were correct and should not have been interfered with by the Additional Commissioner.

( 4 ) THE first question to which this court has to apply its mind is whether to admit such a writ petition for being considered as a whole. Once the merits of such a writ petition are considered, the Court may find either that the writ petition deserves to be allowed or that it is liable to be dismissed. In either event, the decision will be on merits. After consideration of the merits, there is little point in the Court deciding the preliminary question whether the writ petition should have been entertained even though the petitioner has not availed himself of the opportunity of filing the statutory appeal. In view of the decisions of the Supreme Court in Sheo Nath Singh v. Appellate Assistant Commissioner, (1971) 81 I. T. R. 147 (S. C.) (1), and L. Hirday Narain v. Income Tax Officer, (1970) 78 I. T. R. 26 (S. C.) (2), this Court would not be warranted in dismissing a writ petition on the preliminary ground of the failure to avail the alternative remedy of statutory appeal if the Court once considers the merits of the case. We have, therefore, decided to consider the preliminary question as to whether the writ petition should be entertained at all in view of the failure of the petitioners to avail themselves of the statutory appeal at threshold without going into the merits of the case as a whole.

( 5 ) THE facts necessary to understand the petitions are as follows. Gee Vee Construction Company Private Limited was incorporated on July 25, 1969 with the object of acquiring land and making constructions thereon. It purchased bungalow No. II, Tolstoy Marg, New Delhi, for Rs. 9,5000. 00 after borrowing loans inasmuch as the paidup capital of the company was only Rs. 65,000/. Some of the directors and the shareholders of the company along with some others also entered into a partnership called Gee Vee Enterprises and got. it registered with the Registrar of Firms in 1969. An agreement was entered into between these two sister concerns on December 23, 1969. The partenership was to build a multi-storeyed building on the plot after taking advance from the licencees to whom the flats in the building were to be allotted. The partnership was to keep 90 percent of this money and pay 10 per cent out of it to the company along with Rs. 2,000. 00 per month as consideration for this agreement. In lieu of the 10 per cent of the money so received the company was to issue shares to the licencees who would be taking up the flats. The agreement was to come to an end after the building was constructed, flats allotted and the money so distributed. The Income Tax Officer granted registration to the firm unde