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 objections before the Assessing Authority. The court declined interference with the proceeding, noting prior SC precedents restrict routine quashing of mere show-cause notices and that an interim order from a coordinate Bench was not dispositive. The petitioner was granted liberty to avail statutory remedies before the authority; the challenge to the notice was rejected.

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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, 1961

This 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 Notice

Counsel 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 Court

The 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.

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