Petition Dismissed: Court Upholds Alternative Remedy Rule in Income Tax Case; Allows Time Extension for Statutory Appeal.

The HC dismissed the petition challenging the notice under Section 148 of the Income Tax Act, 1961, due to the availability of an alternative statutory remedy under Section 246. The court emphasized the petitioner's failure to notify the department of the original assessee's death and ruled that a writ petition is inappropriate when a statutory remedy exists. The court granted the petitioner liberty to pursue the statutory appeal, ensuring that the time spent on the petition does not affect any delay in filing the appeal. The petition was disposed of with no order as to costs.

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Issues involved: Challenge to notice under Section 148 of the Income Tax Act, 1961 for re-opening assessment for the assessment year 2016-17 on grounds of being illegal, without jurisdiction, arbitrary, and in violation of principles of natural justice.

Issue 1: Validity of notice under Section 148 of the Income Tax Act, 1961

The petitioner contended that the notice under Section 148 of the Act was issued in the name of legal heirs of the deceased assessee, which was improper as the notice must be issued to a living person. Citing a previous court order, the petitioner argued that a notice cannot be issued in the name of a deceased assessee. In response, the respondents stated that the petitioner failed to inform the department about the death of the original assessee in a timely manner and did not provide the death certificate. The respondents emphasized that the petitioner continued to file returns in the name of the deceased even after her death. The respondents argued that challenging the show cause notice at this stage, after the final assessment order has been passed, was inappropriate.

Issue 2: Availability of statutory remedy

The respondents pointed out that the final assessment order was appealable under Section 246 of the Act, and the petitioner should have utilized this remedy instead of filing the present petition. Referring to a previous judgment, the respondents highlighted that once the assessment is completed, it is not suitable for the court to entertain a writ petition. Considering the facts of the case and the precedent cited, the court concluded that the petition should be dismissed as statutory alternative remedy under Section 246 of the Act was available to challenge the assessment order.

Judgment Summary:

The court noted that the show cause notice stage under Section 148 had passed, and the assessment proceedings had been completed with a final assessment order. The petitioner's failure to inform the department about the death of the original assessee was highlighted. The court emphasized that when a statutory remedy is available, a writ petition should not be entertained, except in exceptional circumstances. Given that the petitioner had an alternative statutory remedy under Section 246 of the Act to challenge the assessment order, the court dismissed the petition with liberty for the petitioner to pursue the statutory appeal. The court clarified that the time spent on the petition would not affect the calculation of any delay in filing the appeal. The petition was disposed of with no order as to costs.

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