2023 (6) TMI 1391 - HC - Income Tax

Maintainability of the writ petition based on the availability of an alternate statutory remedy - Validity of Reopening of assessment u/s 147 - HELD THAT - Suffice it to mention that the distinction between maintainability of the writ petition under Article 226 of the Constitution of India and the aspect of its entertainability has been considered in a recent decision M/s Godrej Sara Lee Ltd. 2023 (2) TMI 64 - SUPREME COURT - It has been held therein that an objection to maintainability of a writ petition would go to the root of the matter as the Court would be incapable of receiving the lis for adjudication. The question of entertainability is however within the realm of discretion of the Court since writ remedy is discretionary in nature. It has been further held that when a jurisdictional issue is raised in a writ petition challenging the competence of exercise of statutory power in question, the same being a pure question of law, it can be considered in exercise of writ jurisdiction. Thereafter the aspect of grant of discretionary relief could be considered while entertaining the writ petition. We find that in the present writ petition the petitioner has raised a challenge to the initiation of proceedings and exercise of power under Section 148 of the Act of 1961 by urging that the statutory requirements prescribed by Section 148 have not been satisfied. As submitted that since there is no existence of any reason to believe, reopening of the proceedings by the respondent No. 1 is without jurisdiction. Since the jurisdiction of the respondent No. 1 of initiating the proceedings itself is under challenge, the writ petition would be maintainable. In the light of the challenge as raised it cannot be said that the writ petition is not maintainable. The further question as regards the entitlement to any relief would be a matter to be considered on merits while entertaining such jurisdictional challenge is an aspect to be considered on merits. It is therefore held that the writ petition as filed is maintainable and the same is liable to be entertained on merits. The preliminary objection to maintainability of the writ petition is thus turned down. The writ petition shall accordingly be heard for admission. Place the same for admission accordingly.

Summary

Issues Involved:
1. Challenge to notices issued under Section 148 of the Income Tax Act, 1961 for re-opening assessment.
2. Preliminary objection to the maintainability of the writ petition based on the availability of an alternate statutory remedy.
3. Jurisdictional challenge to the initiation of proceedings under Section 148 of the Act of 1961.

For the first issue, the petitioner challenged the notices dated 31/03/2021 issued under Section 148 of the Income Tax Act, 1961, seeking to re-open the assessment for the year 2017-2018. Additionally, a challenge was raised against the communication dated 19/12/2021 turning down the objection to the re-opening process.

Regarding the second issue, the respondent's counsel raised a preliminary objection to the maintainability of the writ petition, arguing that the petitioner has an alternate statutory remedy through an appeal under the Act of 1961. It was contended that all grounds raised in the writ petition could be addressed in the statutory proceedings, and there was no exceptional case warranting the invocation of writ jurisdiction.

On the third issue, the petitioner's counsel argued that challenging the jurisdiction of the respondent in initiating proceedings under Section 148 of the Act of 1961 could be entertained under Article 226 of the Constitution of India. The petitioner contended that the statutory requirements for initiating the proceedings were not met, thus questioning the jurisdiction to commence such proceedings.

The High Court considered the maintainability of the writ petition in light of the jurisdictional challenge raised. It referenced a recent decision of the Supreme Court, emphasizing the distinction between maintainability and entertainability of a writ petition. The Court noted that when a jurisdictional issue is raised challenging the exercise of statutory power, it can be considered in writ jurisdiction. The Court held that since the petitioner challenged the initiation of proceedings under Section 148, the writ petition was maintainable and liable to be entertained on merits.

Ultimately, the Court rejected the preliminary objection to the maintainability of the writ petition. The case was directed to be heard for admission to further consider the challenges raised in the petition. The Court did not delve into the merits of the case at this stage, leaving them to be addressed during the subsequent hearing.