2004 (1) TMI 35 - HC - Income Tax

Maintainability of petition - validity of the reassessment notice - It is appropriate in the matter that the appellant should avail of alternative remedy and show-cause against the same before the authority concerned and that has been done. It is also open to the appellant to take up the objection regarding jurisdiction in the reply to the show cause notice - Leaving that apart, it is a case where the alternative remedy of filing of the objections against show-cause notice available to the appellant has been availed of. The appellant, as said earlier, has filed the reply/objection to the show-cause notice. The writ petitions, thus, otherwise also, are not maintainable

Summary

Issues:
Challenge to notice under section 148 of the Income-tax Act, 1961 for reassessment.
Jurisdictional validity of the notice.
Availability of statutory remedies against reassessment proceedings.
Maintainability of writ petitions against show-cause notice.
Applicability of alternative remedy and grounds for interference in writ petitions.

Analysis:
The judgment delivered by the High Court of Rajasthan pertains to the challenge raised by a private limited company against a notice issued under section 148 of the Income-tax Act, 1961 for reassessment. The appellant contested the validity of the notice on grounds of jurisdictional incompetence and lack of necessary sanction under section 151 of the Act. The court noted that the appellant had statutory remedies available, including filing objections and subsequent appeals before higher authorities. The court observed that the appellant's actions seemed aimed at delaying the assessment process by resorting to writ petitions.

The court considered the precedents cited by the Revenue's counsel, emphasizing that the Assessing Officer had the jurisdiction to issue the notice, and the superior officer's sanction was valid. The grounds raised by the appellant did not warrant interference under Article 226 of the Constitution of India, as the statutory appeal mechanism was in place. The court highlighted that the writ petitions were against a show-cause notice issued by a competent authority, and there was no infringement of fundamental rights. Referring to Supreme Court rulings, the court stressed the importance of establishing lack of power or jurisdiction to challenge such notices under Article 226.

The judgment emphasized the need for the appellant to exhaust alternative remedies and raise objections before the relevant authority. As the appellant had already filed objections to the show-cause notice, the court deemed the writ petitions not maintainable. Citing a Supreme Court decision, the court dismissed the special appeals, stating that the appellant had availed of the available remedy and could challenge any adverse decision through appeals. Consequently, the special appeals were dismissed, and the stay applications were also rejected since the appeals failed. The court did not award any costs in this matter.