2022 (5) TMI 969 - HC - Income Tax

Court dismisses writ challenging tax assessment, emphasizes appeal remedy. Petitioner's participation bars review.

SREI EQUIPMENT FINANCE LIMITED Versus ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX

SREI EQUIPMENT FINANCE LIMITED Versus ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX - TMI Issues:Challenge to show cause notice for draft assessment order under Section 143(3) of the Income Tax Act, 1961; Challenge to final assessment order under Section 143(3) dated 30th March, 2022; Availability of alternative remedy before the Commissioner of Income Tax (Appeal); Violation of principles of natural justice; Jurisdiction of the assessing officer; Dismissal of the writ petition with costs.Analysis:The petitioner challenged a show cause notice dated 23rd March, 2022, which provided an opportunity to file objections to the draft assessment order under Section 143(3) of the Income Tax Act, 1961. The petitioner also contested the final assessment order under Section 143(3) dated 30th March, 2022, issued during the pendency of the writ petition. The court noted that the impugned final assessment order was appealable before the Commissioner of Income Tax (Appeal). The assessment order recorded that the petitioner had been given opportunities to respond, including a notice under Section 142(1) of the Act, and had participated in the assessment proceedings. The court found that the petitioner's participation in the assessment proceedings precluded it from challenging the assessment order before the Writ Court, emphasizing that the court should not act as an appellate authority, a role designated for the CIT (Appeal).The court determined that the case did not involve a violation of principles of natural justice as the petitioner had actively participated in the assessment process. It highlighted that the assessing officer, being subordinate to the Commissioner, was obligated to implement the higher authority's order under Section 263 of the Act. The court clarified that the order by the Commissioner under Section 263 was not under challenge before the court. Consequently, the court declined to entertain the writ petition, citing the availability of an alternative remedy before the CIT (Appeal) as the grounds for dismissal without delving into the assessment's merits.In conclusion, the court dismissed the writ petition and imposed costs of Rs. 10,000 upon the petitioner's advocate due to alleged rude behavior and disrespectful conduct in court. The judgment underscored the importance of exhausting alternative remedies and refraining from seeking appellate review through writ jurisdiction when statutory appeal mechanisms exist.