2022 (8) TMI 1313 - HC - Income Tax

Reopening of assessment u/s 147 - Validity of order passed u/s 148A (d) - HELD THAT - In the case of Calcutta Discount Company 1960 (11) TMI 8 - SUPREME COURT it was held that as well settled however that though the writ of prohibition or certiorari will not issue against an executive authority the High Courts have power to issue in a fit case an order prohibiting an executive authority from acting without jurisdiction. Where such action of an executive authority acting without jurisdiction subjects or is likely to subject a person to lengthy proceedings and unnecessary harassment the High Courts it is well settled will issue appropriate orders or directions to prevent such consequences. Admittedly in the present case the procedure as contemplated of the 1961 Act was followed and the authority acted within jurisdiction though petitioner alleges that it erred as the petitioner claims that the order passed under section 148A (d) warrants interference owing to error of fact.

Summary

Issues:
1. Challenge to notice issued under Section 148 of the Income Tax Act, 1961.

Analysis:
The petitioner, a religious society, approached the High Court seeking the quashing of a notice issued under Section 148 of the Income Tax Act, 1961. The petitioner received a notice under Section 148A (b) claiming that income for the year 2018-19 had escaped assessment. Despite responding to the notice with factual and legal submissions, the authorities rejected the explanation and issued a notice under Section 148 of the Act. The petitioner contended that their stand was not considered, and there were errors in fact and law leading to a miscarriage of justice.

The primary issue in this writ petition was whether the court should intervene at the stage of a notice under Section 148 when the assessing officer is yet to complete the assessment/reassessment under Section 147 of the Act. The court referred to a previous judgment in a similar matter and held that interference at a premature stage is not warranted. The court emphasized the distinction between jurisdictional error and errors within jurisdiction, stating that statutory remedies are available for rectification of such errors.

The court dismissed the writ petition based on the settled proposition of law and the fact that the proceedings initiated by the statutory authority were yet to be concluded. The petitioner relied on a Supreme Court order in a different case to argue the maintainability of the writ petition against the notice issued under Section 148. However, the court found that the authority had acted within its jurisdiction, even though the petitioner alleged errors of fact in the order passed under Section 148A (d).

Considering the facts and legal principles, the court found no grounds to interfere at that stage and dismissed the writ petition. The court clarified that the dismissal should not be construed as an opinion on the merits of the case, maintaining the distinction between the jurisdictional aspects and errors within jurisdiction.