2015 (1) TMI 1397 - HC - Income Tax

Reassessment u/s 147 - stay petition - recovery proceedings - Held that - As the appeal preferred by this petitioner is pending before Commissioner (Appeals) we are not inclined to decide the issue raised by this petitioner in the petition because the petitioner has already availed the efficacious alternative remedy. Thus the petitioner is not remediless against the actions of the respondents. So far as the stay against the recovery procedure initiated by the respondents is concerned as the petitioner has not preferred any stay application before the appellate authority it is but obvious that the respondent will start the recovery procedure initially by issuing letters and thereafter by coercive methods. Nothing is unusual or illegal in this unless the stay application is preferred and stay is obtained by this petitioner in its appeal which is pending before the appellate authority. As no stay application has been preferred by this petitioner before the Commissioner (Appeals) no illegality has been committed by the respondents in starting different procedures for recovery of income tax which is to be legally payable by the petitioner because of reassessment order passed by the respondents on 25th March 2014.

Summary

Issues:
Challenge to order of reassessment and consequential demands for assessment years 2010-11 and 2011-12, challenge to the process of reassessment under Section 147, seeking prohibitory order against the impugned order and demand notices.

Analysis:
The petitioner challenged the order of reassessment dated 25.03.2014 for the assessment years 2010-11 and 2011-12, along with consequential demands. The petitioner contested the entire process of reassessment under Section 147 and sought a prohibitory order against the impugned order and demand notices. The petitioner had filed income tax returns, and an assessment order was passed on 18.09.2010. Subsequently, reassessment notices were issued under Section 148, leading to a reassessment order on 25.03.2014. An appeal against this reassessment order was pending before the Commissioner of Income Tax (Appeals). The respondents initiated recovery of the income tax amount based on the reassessment order, which was the primary grievance of the petitioner.

The court noted that since the appeal filed by the petitioner was pending before the Commissioner (Appeals), it was not inclined to decide the issues raised in the petition as the petitioner had an alternative remedy available. Therefore, the petitioner was not without a legal remedy against the actions of the respondents. The court highlighted that as no stay application had been submitted by the petitioner before the appellate authority, the respondents were within their rights to begin the recovery process through standard procedures unless a stay was obtained through a proper application during the appeal process.

In the absence of a stay application before the Commissioner (Appeals), the court concluded that the respondents had not acted unlawfully by initiating various recovery procedures for the income tax amount due as per the reassessment order. The court found no merit in the writ petition and subsequently dismissed it, emphasizing that the petitioner had legal avenues available to address their concerns through the ongoing appeal process.