2016 (3) TMI 594 - HC - Income Tax

Revision u/s 263 to revise the reassessment order - as separate books of account were not being maintained in respect of MBF unit and therefore the said unit was not eligible for deduction under section 80IB - Held that - The petitioner has a statutory efficacious/alternative remedy of appeal before the Tribunal under section 253(1) of the Act. Thus the petitioner has a statutory efficacious/alternative remedy of appeal before the Tribunal under section 253(1) of the Act.

Summary

Issues Involved:
1. Quashing of the order under Section 263 of the Income Tax Act, 1961.
2. Validity of the reassessment order under Section 147 of the Act.
3. Jurisdiction of the Commissioner of Income Tax (CIT) under Section 263 of the Act.
4. Availability and adequacy of alternative statutory remedies.

Detailed Analysis:

1. Quashing of the Order under Section 263 of the Income Tax Act, 1961:
The petitioner sought to quash the order dated 27.3.2015, passed under Section 263 of the Income Tax Act, 1961. This order set aside the assessment order dated 4.3.2013, directing the Assessing Officer to make a fresh assessment after necessary enquiry/investigation. The petitioner argued that the reassessment order was not erroneous or prejudicial to the interests of the revenue.

2. Validity of the Reassessment Order under Section 147 of the Act:
The petitioner, a public limited company engaged in manufacturing steel and other products, filed a revised return for the assessment year 2005-06, claiming deductions under Sections 80IA and 80IB of the Act. The original assessment was completed on 31.12.2007, and deductions were varied/reduced. On appeal, the CIT(A) partly allowed the deductions, and further appeals were made to the Tribunal and High Court. Reassessment proceedings were initiated by the Assessing Officer on 23.3.2012, reducing the deduction amount for MBF units. The petitioner filed an appeal against the reassessment order, which was pending.

3. Jurisdiction of the Commissioner of Income Tax (CIT) under Section 263 of the Act:
The CIT issued a show cause notice under Section 263, proposing to revise the reassessment order, alleging it was erroneous and prejudicial to the revenue. The petitioner challenged the CIT's jurisdiction, arguing that the reassessment order was valid and the CIT should dispose of the legal objections before proceeding. The CIT continued with the revisionary proceedings without addressing the objections, leading to the impugned order under Section 263.

4. Availability and Adequacy of Alternative Statutory Remedies:
The respondents raised a preliminary objection, arguing that the petitioner had an alternative remedy of appeal before the Tribunal under Section 253(1) of the Act. The court found merit in this objection, referencing several judgments emphasizing that where a statutory remedy is available, it should be exhausted before invoking writ jurisdiction under Article 226 of the Constitution. The court cited cases such as Titaghur Paper Mills Co. Ltd. v. State of Orissa and Assistant Collector of Central Excise v. Dunlop India Ltd., which established that statutory remedies must be pursued before seeking relief through writ petitions.

The court concluded that the petitioner should avail the alternative remedy provided by the Act, rather than seeking redress through a writ petition. Consequently, the petition was dismissed, and the petitioner was directed to pursue the statutory remedy of appeal. The court clarified that its observations should not be taken as an opinion on the merits of the case.