1978 (7) TMI 43 - HC - Income Tax

Court dismisses writ challenging Income Tax Officer's rectification notice for 1969-70 assessment order

The High Court of Allahabad dismissed a writ petition challenging an Income Tax Officer's notice for rectification of mistakes in a company's assessment ... Error apparent on the face of the record - rectification of mistake under ss.154/155 of the Income-tax Act - jurisdiction to amend assessment - obligation to avail statutory hearing before the income-tax officer - exercise of discretionary jurisdiction under Article 226Error apparent on the face of the record - rectification of mistake under ss.154/155 of the Income-tax Act - jurisdiction to amend assessment - Validity of the notice issued under ss.154/155 proposing rectification of the assessment for AY 1969-70 and whether the ITO had jurisdiction to seek amendment on the stated points - HELD THAT: - The Court examined the statement annexed to the notice and found that the points raised by the ITO presented debatable questions which were not manifestly devoid of merit. It was not plain on the face of the record that none of the points amounted to an error apparent on the face of the record requiring rectification. In those circumstances the issuance of a notice proposing rectification of the assessment under the statutory procedure could not be treated as without jurisdiction; the notice served the purpose of inviting the assessee to be heard before any amendment was made.The notice under ss.154/155 was not quashed and the ITO was entitled to proceed with the statutory rectification process.Obligation to avail statutory hearing before the income-tax officer - exercise of discretionary jurisdiction under Article 226 - Whether the petitioner was justified in directly approaching the High Court instead of appearing before the ITO and whether the High Court should exercise writ jurisdiction at that stage - HELD THAT: - The Court held that the petitioner ought to have availed the opportunity to appear and be heard before the ITO on the grounds set out in the notice rather than seek immediate judicial interference. Given that the matters raised were debatable and that the petitioner had not first pursued the statutory remedy of being heard, the High Court should not, in the exercise of its discretionary power under Article 226, intervene at that interlocutory stage. The Court emphasised that summary judicial intervention is inappropriate where the statutory process of rectification and hearing has not been exhausted and the grounds for rectification are not plainly without foundation.Writ jurisdiction was declined and the petition for quashing the notice was dismissed; the petitioner was expected to be heard by the ITO.Final Conclusion: The writ petition challenging the notice under ss.154/155 for AY 1969-70 was dismissed with costs; the petitioner should first appear before the ITO and avail the statutory hearing rather than seek immediate judicial intervention under Article 226. The High Court of Allahabad dismissed a writ petition challenging a notice issued by the Income Tax Officer for rectification of mistakes in the assessment order of a company for the year 1969-70. The court found that the petitioner should have appeared before the officer to contest the proposed rectifications instead of directly approaching the court. The court concluded that the issues raised were debatable and not clear errors on the face of the record, and therefore dismissed the petition with costs.