Court dismisses writ petitions by Trustees & Petitioner Trust challenging assessment, citing alternative statutory remedy

The Court dismissed the writ petitions filed by the Trustees as they had already pursued an alternative statutory remedy. The writ petitions filed by the Petitioner Trust challenging the rejection of objections to reopening assessments were also dismissed. The Court directed the Respondents to proceed with the assessment, allowing the Trust to raise objections during the process. The Court emphasized that the findings were limited to establishing the availability of an alternative efficacious remedy under the Act, leading to the closure of connected miscellaneous petitions.

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Issues Involved:
1. Legality of the writ petitions filed by the Trustees.
2. Legality of the writ petitions filed by the Petitioner Trust challenging the rejection of objections to reopening assessments for the years 2012-13 and 2013-14.
3. Whether the reassessment proceedings were based on a change of opinion.
4. The impact of an allegedly illegal survey conducted on the Petitioner Trust.
5. The issue of substantive vs. protective assessments.

Detailed Analysis:

1. Legality of the writ petitions filed by the Trustees:
The Court noted that the Trustees had already filed an appeal before the Commissioner of Income Tax - Appeals challenging the orders of assessment. The principle that "parallel remedies cannot be pursued" was emphasized, citing several precedents, including Jai Singh v. Union of India and Deeksha Suri v. Income-tax Appellate Tribunal. The Court held that the writ petitions filed by the Trustees could not be entertained as they had already availed the statutory remedy of appeal.

2. Legality of the writ petitions filed by the Petitioner Trust challenging the rejection of objections to reopening assessments for the years 2012-13 and 2013-14:
The Petitioner Trust challenged the reopening of assessments under Section 148 of the Income Tax Act, arguing that the reassessment was based on vague and factually incorrect assumptions. The Trust contended that the reasons provided for reopening were not based on new tangible material and were merely a change of opinion. The Court found that whether the reassessment was based on a change of opinion required a close scrutiny of documents and books of accounts, which is beyond the scope of judicial review under Article 226 of the Constitution. The Court held that the Trust should participate in the assessment proceedings and raise any objections before the assessing authority.

3. Whether the reassessment proceedings were based on a change of opinion:
The Court observed that the original assessment order did not reference the issues of undervaluation of land or the sources of funds for the construction of the building. The Court held that for challenging the initiation of reassessment on the ground of change of opinion, it is necessary to demonstrate that the assessing officer had applied its mind and formed an opinion during the original assessment. The Court found merit in the Respondents' submission that there was no formation of any opinion on these issues in the original assessment, and thus the reassessment could not be challenged as a change of opinion without new tangible material.

4. The impact of an allegedly illegal survey conducted on the Petitioner Trust:
The Petitioner Trust argued that the survey conducted on 23.01.2013 was illegal as Section 133A was amended to enable surveys on charitable institutions only with effect from 01.04.2017. The Court held that even if the survey was illegal, it would not bar the authorities from using the materials gathered during the survey. The Court cited several judgments, including Pooran Mal vs. The Director of Inspection (Investigation), which held that materials seized during an illegal search could still be used by the authorities.

5. The issue of substantive vs. protective assessments:
The Petitioner Trust contended that the reassessment proceedings on the Trust and the Trustees could not be sustained without indicating which of the two was substantive or protective. The Respondents clarified that both assessments were substantive. The Court held that even if one was substantive and the other protective, failure to indicate which was which would not vitiate the proceedings.

Conclusion:
The Court dismissed the writ petitions filed by the Trustees on the ground that they had already availed an alternative statutory remedy. The writ petitions filed by the Petitioner Trust were also dismissed, with the Court directing the Respondents to proceed with the assessment from the stage of disposal of the objections, allowing the Petitioners to raise any objections they may have. The Court emphasized that the findings were for the limited purpose of holding that the Petitioners had an alternative efficacious remedy available under the Act. Consequently, the connected miscellaneous petitions were closed.

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