Petitioner loses challenge to reassessment proceedings under section 147 due to delayed compliance and failure to exhaust statutory remedies

The Jharkhand HC dismissed writ petitions challenging reassessment proceedings under section 147. The petitioner argued reassessment was time-barred under the first proviso to unamended section 147, claiming no reassessment could be initiated after four years without assessee's omission or failure to disclose. The HC held that the petitioner's conduct disentitled him from invoking extraordinary writ jurisdiction due to delayed filing of return in response to section 148 notice and non-compliance with section 142(1) notice and show-cause notice. The court noted the petitioner never challenged the reassessment notice, reasons to believe, or section 151 sanction, and only approached the court after reassessment concluded without preferring statutory appeal. The HC found the matter required factual adjudication beyond Article 226 scope and dismissed all writ applications, directing the petitioner to pursue statutory appellate remedy.

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Issues Involved:
1. Legality of reassessment proceedings u/s 147.
2. Validity of penalty proceedings u/s 271 (1) (c).
3. Availability and exhaustion of alternative statutory remedies.

Summary:

1. Legality of reassessment proceedings u/s 147:
The Petitioner-Assessee challenged the notices issued u/s 148, the assessment orders passed u/s 147 read with section 144B, and the consequent demand and penalty notices for A.Y. 2013-2014 and 2014-2015. The petitioner argued that the reassessment proceedings were time-barred as per the first proviso to the un-amended section 147 of the Act, asserting that no reassessment can be initiated after four years from the end of the relevant assessment year without any omission or failure on the part of the Assessee to make a disclosure. The petitioner also contended that the reassessment was based on a change of opinion and a mechanical grant of sanction by the superior authority, making the proceedings illegal and without jurisdiction. The Court found that the petitioner did not challenge the reassessment notice, reasons to believe, or the sanction granted u/s 151 during the reassessment proceedings. The Court held that the petitioner's conduct, including delayed filing of returns and non-compliance with notices, disentitled him from invoking the writ jurisdiction, emphasizing the need for factual adjudication beyond the scope of Article 226.

2. Validity of penalty proceedings u/s 271 (1) (c):
The petitioner argued that the penalty proceedings u/s 271 (1) (c) were solely based on the findings in the assessment order without fresh consideration in the penalty proceedings, making the imposition of penalty bad in law. The petitioner reiterated that the Revenue cannot disallow a statutory claim of deduction u/s 80-P in the absence of a stipulation for obtaining a statutory audit under the Jharkhand Co-operative Societies Act. The Court did not specifically address the merits of the penalty proceedings but highlighted the petitioner's failure to exhaust statutory remedies.

3. Availability and exhaustion of alternative statutory remedies:
The Respondent argued that the petitioner had not availed the statutory remedy of appeal under the Act and invoked the writ jurisdiction only after the expiry of the period of limitation for filing an appeal. The Court emphasized that the Act provides a complete machinery for challenging assessment and penalty orders and that the petitioner could not bypass this mechanism by invoking the writ jurisdiction. Citing precedents, the Court reiterated that the existence of an alternative remedy must be considered, and the writ jurisdiction should not be invoked as a matter of course. The Court dismissed the writ applications, granting the petitioner liberty to challenge the reassessment and penalty orders before the competent appellate authority, which should decide on the application for condonation of delay in accordance with law.

Conclusion:
The writ applications were dismissed, and the petitioner was advised to pursue the statutory appellate remedies provided under the Income-tax Act, 1961.

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