2022 (6) TMI 1310 - HC - Income Tax

Validity of reopening of assessment u/s 147 - order issued u/s 148A(d) - Whether at this stage of notice under Section 148, writ Court should venture into the merits of the controversy when AO is yet to frame assessment/reassemment in discharge of statutory duty casted upon him under Section 147 of the Act ? - HELD THAT - The consistent view is that where the proceedings have not even been concluded by the statutory authority, the writ Court should not interfere at such a pre-mature stage. Moreover it is not a case where from bare reading of notice it can be axiomatically held that the authority has clutched upon the jurisdiction not vested in it. The correctness of order under Section 148A(d) is being challenged on the factual premise contending that jurisdiction though vested has been wrongly exercised. By now it is well settled that there is vexed distinction between jurisdictional error and error of law/fact within jurisdiction. For rectification of errors statutory remedy has been provided. We find that there is no reason to warrant interference by this Court in exercise of the jurisdiction under Article 226/227 of the Constitution of India at this intermediate stage when the proceedings initiated are yet to be concluded by a statutory authority. Hence the writ petition stands dismissed.

Summary

Issues:
Challenge to order under Section 148A(d) of the Income Tax Act and dismissal of objections raised by the petitioner to the notice issued under Section 148A(b).

Analysis:
The petitioner, an assessee under the Income Tax Act, challenged the order dated 31.03.2022 issued under Section 148A(d) and the notice dated the same day dismissing objections raised under Section 148A(b) regarding alleged income escapement for the assessment year 2018-2019. The petitioner contended that the impugned order was erroneous as it did not consider the objections raised. The primary issue in this writ petition was whether the court should intervene at the notice stage under Section 148 before the assessing officer completes the assessment/reassessment under Section 147 of the Act.

The court referred to past judgments to address this issue. It cited the decision in 'Lachhman Das Nayar and others vs. Hans Raj Puri' under the old Indian Income Tax Act, 1922, emphasizing that the legislature entrusted the determination of facts and law to the Income-tax Officers, and challenging their actions through writs was not permissible. The court also referenced 'Rasulji Buxji Kathawala vs. Income Tax Commissioner, Delhi' where it was held that intervention was not justified at the notice stage when other remedies under the Act were available.

Moreover, the court mentioned the case of 'Sumit Passi vs. Assistant Commissioner of Income-Tax' where it was established that the Income Tax Act provided a complete machinery for assessment/reassessment, and invoking the High Court's jurisdiction under Article 226 was not permitted. The Supreme Court's ruling in 'Raymond Woollen Mills Limited vs. Income Tax Officer, Centre XI, Range Bombay' was also cited, emphasizing that the court should not interfere prematurely when proceedings were ongoing, and the correctness of the order could be challenged through statutory remedies.

Based on these precedents, the court concluded that interference at the current stage was unwarranted as the proceedings initiated were yet to be concluded by the statutory authority. The distinction between jurisdictional error and errors within jurisdiction was highlighted, indicating that statutory remedies were available for rectification. Therefore, the court dismissed the writ petition, clarifying that the decision did not reflect an opinion on the case's merits.