2022 (6) TMI 1281 - HC - Income Tax

Court dismisses writ petition challenging Income Tax Act notice; emphasizes statutory remedies over writ jurisdiction.

The court dismissed the writ petition challenging the notice issued under Section 148-A(b) of the Income Tax Act, 1961. It held that there was a lack of ... Reopening of assessment u/s 147 - scope of new section u/s 148A - principles governing exercise of writ jurisdiction by the High Court - Surprisingly the petitioner has challenged the assessment on the ground that no documents have been provided to him before passing the impugned order but there is no prayer in the present petition seeking those documents - HELD THAT:- Admittedly, in the present case the petitioner was provided with reasons for issuing notice to which the petitioner failed to respond. Request was made for providing information qua certified copies of the documents w.r.t. notice under Section 148-A(b) of the Act even though the information already stands furnished as Annexure to notice under Section 148-A(b) of the Act. Once, the petitioner has opted not to respond to the reasons accompanying notice under Section 148-A(b) of the Act, we find that plea raised by the petitioner w.r.t. wrongful assumption of jurisdiction at the hands of the respondent, is without merit. Surprisingly the petitioner has challenged the assessment on the ground that no documents have been provided to him before passing the impugned order but there is no prayer in the present petition seeking those documents. Faced with the situation, Senior Counsel submits that Communication dated 28th March, 2022 though titled as request letter are indeed objections and be treated so. Bare perusal thereof shall reveal that the objections sought to be raised in present petition have not been raised in the said communication. In the facts of this case we need to observe that the petitioner has been served with notice under Section 148 of the Act. In case the present proceedings culminate in the order of assessment under Section 147 of the Act, the same will be appealable. Statutory appeal is provided under the Act. All pleas raised herein can well be raised in the appeaL As relying on Apex Court summarized the principles governing exercise of writ jurisdiction by the High Court in the presence of alternate remedy in case of 'Radha Krishan Industries vs. State of Himachal Pradesh [2021 (4) TMI 837 - SUPREME COURT] we do not find that this is a case wherein writ jurisdiction under Article 226 of the Constitution of India should be exercised even though statutory remedy shall be available to the appellant against the final order of assessment. Issues Involved:1. Legality of notice issued under Section 148-A(b) of the Income Tax Act, 1961.2. Provision of information and documents to the petitioner.3. Jurisdiction of the Assessing Officer.4. Exercise of writ jurisdiction under Article 226 of the Constitution of India.Detailed Analysis:1. Legality of Notice Issued Under Section 148-A(b) of the Income Tax Act, 1961:The petitioner challenged the notice dated 23rd March 2022, issued under Clause (b) of Section 148-A of the Income Tax Act, 1961, on the grounds that there was no tangible material linking the purchase of property by M/s RKS Builders to the petitioner. The petitioner argued that there was an absence of a live-link between the statement of income of RKS Builders and the petitioner, making the assumption of jurisdiction by the Assessing Officer bad in law.2. Provision of Information and Documents to the Petitioner:The petitioner contended that the authorities failed to supply the requisite documents before passing the impugned order dated 7th April 2022, thus violating the law laid down by the Supreme Court in 'GKN Driveshafts (India) Ltd. vs. Income Tax Officer and others' and reiterated by the Bombay High Court and Delhi High Court in relevant cases. However, the court noted that the petitioner was provided with reasons for issuing the notice, to which the petitioner failed to respond. The court found that the plea raised by the petitioner regarding the wrongful assumption of jurisdiction was without merit, as the petitioner did not seek the documents in the present petition.3. Jurisdiction of the Assessing Officer:The petitioner argued that the firm M/s RKS Builders and the petitioner are different individuals and different assessees for the purpose of the Income Tax Act. Therefore, any escapement of income at the hands of the firm should not result in reassessment proceedings against the petitioner. The court observed that the petitioner had been served with a notice under Section 148 of the Act, and any issues regarding the assessment could be raised in an appeal if the proceedings culminated in an order of assessment under Section 147 of the Act.4. Exercise of Writ Jurisdiction Under Article 226 of the Constitution of India:The court discussed whether it should exercise its writ jurisdiction under Article 226 of the Constitution if an effective and efficacious alternate remedy is available. Citing various precedents, including 'C.A. Abraham vs. Income Tax Officer, Kottayam and another', 'Commissioner of Income Tax, Gujarat vs. VijayBhai N. Chandrani', and 'Radha Krishan Industries vs. State of Himachal Pradesh', the court emphasized that when an alternate remedy is available, it must be exhausted before approaching the writ court. The court concluded that in the present case, writ jurisdiction should not be exercised as the petitioner had an adequate statutory remedy available.Conclusion:The court dismissed the writ petition, stating that the petitioner should avail the statutory remedy provided under the Income Tax Act. The petitioner was granted the liberty to raise all available pleas, including those raised in the present petition, before the statutory authority in an appeal.