2019 (6) TMI 355 - HC - Income Tax

Appeals Over Writs: Court Emphasizes Appellate Forum for Tax Challenges

The Court directed the petitioner to seek redressal through the Appellate Forum for challenges to the provisional attachment order under Section 281B, ... Provisional attachment u/s 281B - non-speaking order - demand u/s 156 pursuant to assessment u/s 143(3) - attaching properties belonging to the assessee in order to protect the interest of the revenue - HELD THAT:- There is some force in the arguments advanced by the learned counsel for the revenue as the assessment order is challenged on the factual aspects in as much as the details of names and PAN numbers said to have been furnished by the assessee to whom the payments are made to establish the claim made, the same necessarily requires to be examined by the appellate authority, the machinery provided under the Act. The question of facts cannot be examined under the writ jurisdiction. The petitioner is relegated to the Appellate Forum to assail the assessment order impugned. If such an appeal is preferred within a period of three weeks from today, the same shall be considered by the Appellate Authority in accordance with law on merits without objecting to the aspect of limitation. The order passed by the AO u/s 281B has been ceased to have effect after the expiry of six months from the date of the order of the assessment. Hence, the apprehension of the petitioner regarding the enforcement of the provisional attachment further would not arise and the same can be allayed with a direction to the respondent authorities that the said order shall not be enforced until a decision is to be taken by the Appellate Authority on the stay application, if to be filed in the appeal proceedings by the assessee within a period of three weeks as aforesaid and is ordered accordingly. Issues:Challenge to provisional attachment order under Section 281B, Assessment order under Section 143(3), Consequential demand notice under Section 156 of the Income Tax Act, 1961.Provisional Attachment Order under Section 281B:The petitioner challenged the provisional attachment order dated 27.12.2018 under Section 281B, contending it was a nonspeaking order and void ab initio. The order was passed to protect the revenue's interest during assessment proceedings. The revenue argued that the order's short life span of six months meant the challenge was not sustainable post-assessment. The Court noted the petitioner's grievance but directed them to the Appellate Forum for redressal, emphasizing that factual matters need to be examined by the appellate authority, not under writ jurisdiction.Assessment Order under Section 143(3):The petitioner contested the assessment order dated 28.12.2018 under Section 143(3), claiming non-application of mind by the Assessing Officer. They argued that details provided were ignored, leading to an erroneous conclusion. The revenue countered by stating that discrepancies needed appellate scrutiny. The Court agreed, stating that factual disputes should be addressed by the Appellate Authority. The petitioner was directed to file an appeal within three weeks, ensuring the appeal would be considered on merits without limitation objections.Consequential Demand Notice under Section 156:The consequential demand notice dated 28.12.2018 under Section 156 was also challenged. However, the judgment primarily focused on the provisional attachment and assessment orders. The Court disposed of the writ petition, instructing that the provisional attachment order would not be enforced until the Appellate Authority decided on a stay application, if filed within three weeks. The judgment highlighted the importance of addressing factual disputes through the appropriate appellate channels rather than through writ jurisdiction.