TaxTMI 
TaxTMI 
2023 (8) TMI 522
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....ncipally on the grounds that the said notice has been issued on incorrect facts, no reasons have been given while deciding the objections raised by the petitioner to the re-opening of the proceedings and the same have been decided without passing any speaking order. In addition, it is urged that the re-opening of the proceedings is without there being any independent application of mind and no reasons to believe have been indicated by the Income Tax Officer (for short "ITO") in that regard. 4] The facts relevant for considering the challenge are that on 24/3/2020, the ITO issued notice under Section 148 of the Act of 1961 stating therein that he had reasons to believe that the income chargeable to tax for the Assessment Year 2013-14 had escaped assessment within the meaning of Section 147 of the Act of 1961. The petitioner was accordingly called upon to deliver a return in the prescribed form for the said Assessment Year within a period of thirty days from service of the notice. The reasons for re-opening of the proceedings under Section 147 of the Act of 1961 as indicated were that from the information received and enquiry as made, it was clear that the assessee - petitioner had ....
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.... in the accounts for the Assessment Year 2012-13. On 17/9/2021, the objections raised by the petitioner on 13/9/2021 came to be disposed of by holding the said objections to be not acceptable/tenable. It is thereafter that the assessment order dated 29/9/2021 came to be passed and the income of the petitioner was assessed at Rs. 1,55,30,950/-. 5] Shri Kapil Hirani, learned Counsel for the petitioner in support of the challenge to the notice issued under Section 148 of the Act of 1961 submitted that : a] the re-opening of the assessment was based on incorrect facts and therefore the aforesaid notice was not sustainable. According to him, the reason for re-opening of the proceedings as indicated on 24/3/2020 was that according to the ITO, the petitioner had earned profit from the sale of shares. It was submitted that the petitioner had suffered loss of Rs. 9,90,314/- and that amount had been debited in the petitioner's profit and loss account. Same was also included in the petitioner's return by showing it as a loss. The ITO on the incorrect fact that the said amount was towards profit from the sale of shares proceeded to seek re-opening of the proceedings. Referring to the decisi....
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....) Mumbai & Anr. [(2019) 411 ITR 602]; and iii) Nivi Trading Limited Vs. Union of India & Anr. [(2015) 375 ITR 308]. On this basis, it was urged that the notice issued under Section 148 of the Act of 1961 on 24/3/2020 was liable to be set aside. Though the assessment had been completed by passing order dated 29/9/2021 and the petitioner had filed an appeal by way of abundant precaution, the challenge in the present proceedings was restricted to the legality of the notice issued under Section 148 of the Act of 1961. 6] Shri Anand Parchure, learned Counsel for the respondents at the outset raised an objection to the tenability of the Writ Petition on the ground that the assessment having been completed, all grounds of challenge including the challenge to the notice dated 24/3/2020 could be raised in a statutory appeal preferred by the petitioner. Referring to the decisions in i) Anshul Jain Vs. Principal Commissioner of Income-tax [(2022) 449 ITR 256]; ii) Commissioner of Income Tax & Ors. Vs. Chhabil Dass Agarwal [(2014) 1 SCC 603]; iii) Gian Castings (P.) Ltd. Vs. Central Board of Direct Taxes [(2022) 140 taxmann.com 319]; and iv) The State of Maharashtra & Ors. Vs. Greatshi....
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....a). While the objection to "maintainability" goes to the root of the matter and if such objection is found to be of substance, the Court would be rendered incapable of receiving the lis for adjudication. On the other hand, the question of "maintainability" is within the realm of discretion of the High Court since writ remedy is discretionary in nature. It has been further observed that dismissal of Writ Petition on the ground that the petitioner has not availed the alternate remedy without examining as to whether an exceptional case has been made out for such entertainment would not be proper. After referring to various earlier decisions, the exceptions on the basis of which a writ Court would be justified in entertaining a Writ Petition notwithstanding the availability of an alternate remedy were indicated which includes the aspect where the proceedings are without jurisdiction or the order in that regard is without jurisdiction. If a jurisdictional issue is raised and the controversy is purely a legal one that does not involve any disputed question of fact, then the Writ Petition does not deserve to be thrown out at the threshold. The decision in M/s Magadh Sugar & Energy Ltd. (s....
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....risdictional error and error of law/fact within jurisdiction has been referred to by the Hon'ble Supreme Court in Anshul Jain (supra). The decision in Chhabil Dass Agarwal (supra) has been considered by the Division Bench in Ajay Ajit Tanna Vs. Union of India & Ors. [Writ Petition No. 5098/2022 decided on 8/3/2023] and by referring to the exception to rule of alternate remedy, it has been held that if the Statutory Authority has not acted in accordance with the provisions of the enactment in question, extraordinary jurisdiction could be exercised. In the said decision, failure on the part of the Assessing Officer to comply with the directions of the Hon'ble Supreme Court was one of the reasons for entertaining challenge to the notice issued under Section 148 of the Act of 1961 in writ jurisdiction. In Greatship (India) Limited (supra), the Hon'ble Supreme Court held that challenge to an assessment order could not have been entertained in exercise of writ jurisdiction. Ratio of this decision therefore would not apply to the facts of the present case. 11] Coming to the challenge as raised to the notice issued under Section 148 of the Act of 1961, it is seen that pursuant to the not....
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....could be no reason for the Assessing Officer to believe that income chargeable to tax has escaped assessment. 13] In the aforesaid context, if the order deciding the objections is perused, the same does not state that the facts mentioned by the petitioner were incorrect. In fact, no reasons whatsoever have been assigned and it is reiterated that the petitioner failed to declare any profit/ loss in the income tax return and hence the amount of Rs. 9,90,314/- was treated as profit on the sale of shares. As stated above, despite specific objection that the said amount had been debited in the bank account of the petitioner and it pertained to the losses sustained in commodity trading having been shown in the accounts for the Financial Year 2011-12, Assessment Year 2012-13, it becomes clear that the objections have been decided without due application of mind. As held by the Hon'ble Supreme Court in GKN Driveshafts (India) Ltd. (supra), the objections as raised have to be disposed of by a speaking order that could indicate due application of mind. As stated above, there are no reasons whatsoever assigned for turning down the objections and the facts stated in the notice dated 24/3/2020....