2022 (5) TMI 969 - HC - Income Tax

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

The court dismissed the writ petition challenging the show cause notice and final assessment order under the Income Tax Act, emphasizing the availability ... Order passed following due procedure of law - argument of violation of principles of natural justice - availability of the alternative remedy - petitioner has challenged the impugned show cause notice giving opportunity to the petitioner to file any objection to the draft assessment order before passing final assessment order under Section 143(3) in order to give effect to the order passed by the Commissioner u/s 263 and the petitioner did not avail the said opportunity - also filed a supplementary affidavit challenging the impugned final assessment order under Section 143(3) dated 30th March, 2022 which has been passed during the pendency of the writ petition - HELD THAT:- The impugned assessment order which has been challenged by way of supplementary affidavit is an appealable order before the Commissioner of Income Tax (Appeal). It also appears that the aforesaid impugned order was passed after following due procedure of law by issuance of notice and giving opportunity of hearing from time to time to the petitioner and it has been recorded in the assessment order that petitioner’s reply was also taken into consideration. It has been specifically recorded in the assessment order that a letter was issued on the petitioner on 19th January, 2022 but no reply was filed by the petitioner and further a notice under Section 142(1) of the Act was issued to the petitioner on 15th February, 2022 requiring it reply on or before 20th February, 2022. So, this cannot be a case of violation of principles of natural justice and petitioner has participated in the assessment proceeding and now when it has gone against him he wants to challenge the assessment order before this Writ Court and want this Court to act as an appellate authority by going into the merit of the assessment which is the job of the CIT (Appeal). This is not that categories of cases where the proceeding has been initiated by an officer having inherent lack of jurisdiction since in this case assessing officer being subordinate to the Commissioner is bound to give effect to the order by his higher authority which is the Commissioner of Income Tax who had passed order under Section 263 of the Act which is not even subject matter of challenge before this Court. We are not inclined to entertain this writ petition and the same is accordingly dismissed without going into the merit of the assessment only on the ground of availability of the alternative remedy. 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.