2024 (2) TMI 547 - HC - Income Tax

Challenge to s.148 show-cause notice rejected as premature; petitioner must first reply and exhaust statutory remedies

HC dismissed the writ petition challenging issuance of a s.148 show-cause notice as premature, holding the petitioner must first reply and raise ... Validity of reassessment order u/s 148 - petitioner submits that the respondents have no jurisdiction to issue the notice u/s 148 as the same has been issued without following the notification dated 29.03.2022 issued by the CBDT - as argued by respondent writ petition has been filed by the petitioner at the premature stage against the show-cause notice only as the proceedings are still pending before the authority before whom the petitioner can submit reply and raise all his objections available under the law. HELD THAT:- Apparently, the notice issued to the petitioner u/s 148 is only a show cause notice for which undoubtedly the petitioner is having remedy to file reply & raise all objections before the Assessing Authority where the proceedings are going on. Thus, considering the judgments passed by the Hon'ble Supreme Court Vicco Laboratories [2007 (11) TMI 21 - SUPREME COURT], State of Assam Vs. Barak Upatyaka D.U. Karmachari Sanstha [2009 (3) TMI 992 - SUPREME COURT] and State of Madhya Pradesh & Ors. Vs. Commercial Engineers and Body Building Company Limited. [2022 (10) TMI 576 - SUPREME COURT] as referred above, we see no reason to interfere in this matter as the proceedings are still pending before the concerned Assessing Authority where the petitioner is certainly having liberty to file the available under the law. raise all his objections as So far as the interim passed by the Coordinate Bench at Principal Seat, Jodhpur in the matter of Krishna Kumar [2023 (7) TMI 1360 - RAJASTHAN HIGH COURT] relied upon by counsel for the petitioner is concerned, the said order was passed as an interim measure, which has not decided the issue finally. In our considered view, since we are deciding the matter finally at the request of counsel for the petitioner himself, the said interim order passed by the Coordinate Bench does not help to the petitioner in view of the judgment passed by the Hon’ble Supreme Court in the matter of State of Assam [2009 (3) TMI 992 - SUPREME COURT]. We are also of the view that in number of petitions filed under Article 226 of the Constitution of India challenge is made to mere issuance of the show cause notice and for seeking interim orders therein, which prolong the proceedings pending before the concerned authority and therefore in our considered view interference with regard to mere issuance of show cause notice should be rare and not in a routine manner. This writ petition is dismissed. Issues Involved:1. Jurisdiction to issue notice under Section 148 of the Income Tax Act, 1961.2. Premature filing of writ petition against show-cause notice.3. Applicability of precedents set by the Hon'ble Supreme Court regarding interference at the stage of show-cause notices.Summary:Issue 1: Jurisdiction to Issue Notice under Section 148 of the Income Tax Act, 1961This writ petition was filed challenging the order dated 30.03.2023 passed by the respondent under Section 148 of the Income Tax Act, 1961. Counsel for the petitioner argued that the respondents lacked jurisdiction to issue the notice under Section 148 as it was issued without adhering to the notification dated 29.03.2022 issued by the CBDT. The petitioner relied on a decision by a Coordinate Bench at Principal Seat, Jodhpur, which directed that proceedings may continue but the final order of assessment should not be passed.Issue 2: Premature Filing of Writ Petition Against Show-Cause NoticeCounsel for the respondent opposed the writ petition, stating that it was filed prematurely against a show-cause notice while proceedings were still pending before the authority. The petitioner had the opportunity to submit a reply and raise all objections available under the law before the Assessing Authority.Issue 3: Applicability of Precedents Set by the Hon'ble Supreme CourtThe Court referred to several judgments by the Hon'ble Supreme Court, emphasizing that writ petitions should normally not be entertained against mere issuance of show-cause notices. The Supreme Court in Union of India (UOI) and Ors. Vs. Coastal Container Transporters Association & Ors., (2019) 20 SCC 446, held that the High Court should not entertain writ petitions at the show-cause notice stage unless there is a lack of jurisdiction or violation of principles of natural justice. Similar views were echoed in Commissioner of Central Excise, Haldia Vs. Krishna Wax (P) Ltd., (2020) 12 SCC 572, and other cited cases, where the Court highlighted that the concerned person must first raise all objections before the authority issuing the show-cause notice.The Court also noted that the interim order passed by the Coordinate Bench at Principal Seat, Jodhpur in the matter of Krishna Kumar was an interim measure and did not decide the issue finally. Hence, it did not help the petitioner in the present case.Considering the judgments passed by the Hon'ble Supreme Court, the Court saw no reason to interfere in the matter as the proceedings were still pending before the Assessing Authority. The petitioner was at liberty to raise all objections available under the law before the Assessing Authority.In conclusion, the writ petition was dismissed, and the petitioner was advised to raise all objections before the Assessing Authority. Pending applications, if any, were also disposed of.