2022 (12) TMI 186 - HC - Income Tax

Court dismisses petition challenging Income Tax Act notices, emphasizes appeal remedy availability. Writ petition not maintainable.

The Court dismissed the petition challenging notices and orders under the Income Tax Act, citing the availability of an appeal remedy under Section 246 of ... Reopening of assessment u/s 147 - Scope of new provision section 148A - conducting of enquiries or issuance of show-cause notice or passing of order u/s 148A - Scope of amendment by the Finance Act, 2021 which has amended Income Tax Act by introducing new provisions i.e. sections 147 to 151 w.e.f. 1st April, 2021 - violation of the judgment passed by Hon’ble Supreme Court in the case of Union of India and others vs. Ashish Agarwal [2022 (5) TMI 240 - SUPREME COURT] - HELD THAT:- The Section 246 of the Income Tax Act, 1961 provides an appeal. Therefore, the petitioner is having a remedy to challenge the order/notice by way of filing an appeal and the ground raised by him with respect to jurisdiction of the authorities can always be considered by the authorities. Even otherwise, a writ petition against a show cause notice is not maintainable in view of the law laid in the case of Kunishetty Satyanarayan [2006 (11) TMI 543 - SUPREME COURT]The Hon’ble Supreme Court while modifying the judgment has granted two weeks time to reply to show cause notice. This Court refrains to interfere in the impugned orders/notices passed by the authorities as the same is issued in pursuance to judgments passed by the Hon’ble Supreme Court. The present petition is held to be not maintainable in view of the law laid down by the Hon’ble Supreme Court in the case of Kunishetty Satyanarayan (supra) and in view of availability of alternative efficacious remedy to the petitioner. Issues:Challenging legality, validity, and propriety of notices and orders under Income Tax Act, 1961 based on misinterpretation of Supreme Court judgment. Maintainability of writ petition against show cause notice under Article 226 of the Constitution of India. Jurisdiction of authorities to issue notices beyond limitation under Section 148 of the Act.Analysis:The petitioner challenged the notice, instructions, and orders issued under the Income Tax Act, 1961, alleging a misinterpretation of the Hon'ble Supreme Court's judgment in a specific case. The petitioner contended that the authorities illegally extended the limitation for reassessment proceedings under various sections of the Act, seeking to challenge the legality and validity of the impugned notices and orders. The respondents raised a preliminary objection regarding the maintainability of the writ petition against a show cause notice under Article 226 of the Constitution of India.The respondent argued that the Supreme Court had modified the impugned orders in a previous case, allowing the notices to be treated as show cause notices under Section 148A of the Act. The respondent contended that the petitioner could avail the remedy of appeal under Section 246 of the Income Tax Act to challenge the orders issued by the authorities. The respondent cited previous judgments to support the position that a writ petition against a show cause notice is not maintainable in the absence of an alternative efficacious remedy.In response, the petitioner vehemently opposed the contentions, asserting that the impugned notices were illegal and contrary to the provisions of limitation under Section 149(1) of the Act. The petitioner argued that the authorities lacked jurisdiction to issue notices under Section 148 of the Act beyond the prescribed limitation period, making the present petition maintainable. The petitioner highlighted that the Supreme Court did not condone delays in assessment proceedings and emphasized the illegality of the impugned notices.Upon hearing both parties and examining the record, the Court noted the controversy arising from the Supreme Court's judgment in the Ashish Agarwal case. The Court observed the modified directions issued by the Supreme Court, which led to the re-issuance of show cause notices by the authorities. The Court emphasized the availability of an appeal under Section 246 of the Income Tax Act for the petitioner to challenge the orders or notices, indicating that the petitioner's jurisdictional concerns could be addressed through the appellate process.Ultimately, the Court refrained from interfering in the impugned orders and notices, citing the law laid down by the Supreme Court regarding the maintainability of a writ petition against a show cause notice. The Court held that the present petition was not maintainable due to the availability of an alternative efficacious remedy for the petitioner. Consequently, the petition was dismissed, with the petitioner granted liberty to avail remedies as per the law.