2021 (5) TMI 1060 - HC - Income Tax

Black Money - show-cause notice issued u/s 10(1) of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act - as argued since the petitioner has already taken recourse to the statutory remedy the present writ petition cannot be entertained - HELD THAT - As we are prima facie of the view that merely on the ground that the petitioner has taken recourse to an alternate remedy we cannot refuse to entertain the instant writ petition. The petitioner s explanation at this stage seems to be a plausible one; which is that since limitation was running against him he had to file the appeal. That being said there are issues raised by the petitioner which impinge upon the jurisdiction of the respondents/revenue with regard to the triggering of the provisions of the 2015 Act. These are aspects that we are considering as pointed out hereinabove in other matters as well. Accordingly issue notice.

Summary

Issues: Challenge to show-cause notice and assessment order under Black Money Act; Jurisdiction of respondents under 2015 Act; Alternate remedy taken by petitioner.

Analysis:
1. The writ petition challenges a show-cause notice and assessment order issued under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (2015 Act) for the assessment year 2017-2018. The petitioner also raises other prayers in the petition. The petitioner contends that a substantial part of the foreign income was already assessed and taxed under the Income Tax Act, 1961 in a previous assessment year. Additionally, the petitioner argues that the show-cause notice was issued beyond the stipulated timeline as per CBDT guidelines. The petitioner also highlights that the company in which they held beneficiary interest has been struck off from the register of companies, and its bank account has been closed. These grounds challenge the applicability of the 2015 Act to the petitioner's case.

2. The petitioner's counsel acknowledges filing an appeal against the impugned assessment order before the Commissioner of Income Tax (Appeals) due to running limitation. The petitioner's submission raises issues regarding the jurisdiction of the respondents/revenue in applying the provisions of the 2015 Act to the petitioner. The petitioner's explanation for taking the statutory remedy due to limitation is deemed plausible by the court. The court notes that the issues raised by the petitioner regarding the jurisdiction of the respondents/revenue under the 2015 Act are under consideration in other pending matters before the court.

3. The respondents argue that since the petitioner has already pursued an alternate remedy by filing an appeal, the writ petition should not be entertained. However, the court opines that the mere existence of an alternate remedy does not preclude the court from considering the writ petition. The court finds the petitioner's explanation for availing the statutory remedy due to limitation reasonable. The court acknowledges that the issues raised by the petitioner concerning the jurisdiction of the respondents under the 2015 Act require thorough examination, especially in light of similar matters pending before the court.

4. Consequently, the court issues notice in the matter and directs the filing of counter-affidavits within five weeks. The court schedules the next hearing for a specified date and restrains respondent no. 3 from taking any coercive measures against the petitioner until then. The detailed analysis of the issues raised by the petitioner and the jurisdiction of the respondents under the 2015 Act will be crucial in determining the outcome of the writ petition.