2022 (3) TMI 1413 - HC - Income Tax

Validity of reopening of assessment u/s 148 - non-issuance of sanction order under Section 151 by competent authority - HELD THAT - Perusal of sanction granted by competent authority would reflect that it bears DIN and document number. This document specifically bears name and designation of authority according sanction/approval under Section 151 of the IT Act. Hence in view of submission of respective parties and considering documents placed on record wherein DIN is specifically mentioned find no merit in submission of learned counsel for the petitioner. Submission of learned counsel for the petitioner that sanction has been accorded in a perfunctory manner is also not sustainable. Undisputedly final assessment order has already been passed on 23.09.20221 Maintainability of writ petition when alternative statutory remedy is available - As decided in case M/s Commercial Steel Limited 2021 (9) TMI 480 - SUPREME COURT held that writ petition can be entertained in exceptional circumstances which are mentioned therein. In the opinion of this Court none of above exceptions is established. Hence in view of alternative remedy available in favour of petitioner under Section 246 A of the IT Act. We are not inclined to entertain this writ petition. Case law relied upon by learned counsel for the petitioner to support his contention that writ petition is maintainable is also mentions that writ petition can be entertained only in exceptional circumstances. Hence petitioner cannot get any benefit of aforementioned judgment relied upon. WP dismissed.

Summary

Issues:
Challenge to notice under Section 148 of the Income Tax Act based on the validity of sanction under Section 151, violation of principles of natural justice, availability of alternative remedy under Section 246A of the IT Act, maintainability of the writ petition under Article 226 of the Constitution.

Analysis:
The petitioner challenged the notice under Section 148 of the Income Tax Act, contending that the sanction under Section 151 was void due to the absence of a valid digital signature and verified DIN, leading to a violation of principles of natural justice. The respondents argued that the approval was granted by a competent authority, and the objection raised by the petitioner was duly considered before the final assessment order was passed. The petitioner's counsel argued that the sanction under Section 151 was not granted by a competent authority, citing discrepancies in the DIN verification and relying on relevant judgments. The respondent's counsel maintained that the sanction bore the required DIN and digital signature, emphasizing the computer-generated nature of the DIN and the presence of necessary details in the sanction order.

The High Court noted that the challenge in the writ petition was primarily centered on the alleged lack of sanction by a competent authority under Section 151 for initiating proceedings under Section 148. Upon examining the sanction document, which included the DIN and authority details, the court found no merit in the petitioner's submissions. The court also observed that the respondents had forwarded the case record for approval under Section 151, refuting the petitioner's claim of perfunctory sanction. Additionally, the court referenced a Supreme Court judgment on the maintainability of writ petitions when alternative statutory remedies are available, highlighting exceptional circumstances where a writ petition may be entertained.

In light of the Supreme Court's guidance on the exceptional circumstances for entertaining writ petitions and the availability of an alternative remedy under Section 246A of the IT Act, the High Court declined to entertain the writ petition. The court emphasized that none of the exceptional circumstances justifying a writ petition were established in this case, leading to the dismissal of the petition. The petitioner was advised to pursue the appellate authority by filing an appeal against the assessment order, as per the legal provisions.

In conclusion, the High Court dismissed the writ petition, emphasizing the availability of the statutory remedy under Section 246A of the IT Act and the absence of exceptional circumstances warranting the entertainment of the petition under Article 226 of the Constitution. The petitioner was directed to seek recourse through the appellate process to challenge the assessment order.