In Siddhant Rastogi v. Union of India through Ministry of Finance, Department of Revenue & Ors., the Allahabad High Court, Lucknow Bench, considered a challenge to an assessment order passed under Section 144C(3) read with Section 143(3) of the Income-tax Act, 1961, along with the consequential demand notice issued under Section 156. The dispute concerned Assessment Year 2024-25 and centred on compliance with the statutory procedure governing objections to a draft assessment order.
The petitioner, a professional seafarer employed outside India, claimed non-resident status and exemption in respect of remuneration received for services rendered abroad. According to him, earlier notices issued during the faceless assessment proceedings were not received because an incorrect email address had inadvertently been updated on the Income Tax portal. He stated that he became aware of the proceedings only upon receipt of the draft assessment order dated 14 March 2026, which proposed total income of ₹79,63,350.
The petitioner thereafter submitted detailed objections to the draft assessment order through the Income Tax e-filing portal on 27 March 2026. His principal grievance before the High Court was that the Assessing Officer did not consider those objections and incorrectly recorded that no response to the draft order had been filed before passing the final assessment order dated 21 May 2026. He also contended that no opportunity of hearing had been granted.
The Income Tax Department, however, pointed out that Section 144C(2)(b) requires an eligible assessee to file objections against a draft assessment order before both the Dispute Resolution Panel and the Assessing Officer. Although the petitioner had filed his objections before the Assessing Officer, he admittedly did not file them before the DRP. The Department therefore argued that the Assessing Officer was entitled to complete the assessment under Section 144C(3).
The High Court accepted the statutory position that Section 144C prescribes a complete procedure once a draft assessment order is issued. It specifically observed that the use of the word “and” in Section 144C(2)(b) makes filing of objections before both authorities mandatory. Once objections are filed before the DRP, the Panel is required to examine them and may call for reports or further material before issuing directions binding on the Assessing Officer. Where no objections are filed before the DRP, Section 144C(3) permits completion of the assessment on the basis of the draft order.
The Court therefore found, prima facie, no procedural infirmity in the assessment order merely because the petitioner had filed objections only before the Assessing Officer. It further noted that the petitioner had an efficacious statutory appellate remedy under Section 246A of the Income-tax Act. Referring to the Supreme Court’s decision in Commissioner of Income Tax v. Chhabil Dass Agarwal, the Court reiterated that where a taxing statute provides a complete statutory remedy, an assessee should ordinarily pursue that remedy instead of invoking writ jurisdiction under Article 226.
Accordingly, the writ petition was dismissed on the ground of availability of an effective alternative remedy. Importantly, the High Court clarified that it had not examined the merits of the petitioner’s substantive tax claims, and the petitioner remained free to raise all available grounds before the appropriate appellate authority. The judgment was delivered on 22 July 2026.