2016 (4) TMI 1038 - HC - Income Tax

Reopening of assessment - Held that - In the present case, the Assessing Officer is bestowed with the powers to reopen an assessment subject to satisfaction of conditions laid down in Sections 147 and 148 of the Act. The petitioner has chosen to submit itself to his jurisdiction and the objections to the reasons are made in the course of reassessment proceedings. The petitioners in this case having participated in the proceedings, do not deserve our exercising extraordinary jurisdiction under Article 226 of the Constitution of India. The petitioners are not remedyless. They have an effective alternative remedy available under the Act. All contentions left open to be urged before the Authorities. In the aforesaid facts and circumstances, the petition is dismissed.

Summary

Issues:
Challenge to notice under Section 148 of the Income Tax Act, 1961 for Assessment Year 2008-09; Exercise of extraordinary writ jurisdiction by the High Court under Article 226 of the Constitution of India.

Analysis:
The petition challenges a notice issued under Section 148 of the Income Tax Act, 1961, seeking to reopen the assessment for the year 2008-09. The Assessing Officer provided reasons for the notice on 4th January, 2016, and subsequently issued notices under Sections 142(1) and 143(2) of the Act, requesting details and attendance. The petitioner sought adjournment to gather information and filed objections to the notice on 22nd January, 2016. The Assessing Officer disposed of these objections on 25th January, 2016. The petitioner then approached the High Court under Article 226 challenging the notice.

The High Court considered the preliminary objection raised by the Revenue's Counsel regarding the petitioner's participation in the assessment proceedings. The Court focused on the petitioner's involvement in the proceedings and the availability of an alternative remedy under the Act. The Court emphasized that the jurisdiction under Article 226 is discretionary and not obligatory, especially when the party has participated in the proceedings and challenges the jurisdiction during reassessment. The Court highlighted that the Assessing Officer has the power to issue reopening notices under Sections 147 and 148 of the Act, subject to specific conditions.

The petitioner argued that despite providing information to the Assessing Officer, they did not participate in the proceedings and filed objections without prejudice. The Court, however, noted that the petitioner's actions indicated participation in the assessment proceedings, disentitling them from extraordinary relief under Article 226. The Court also considered the delay in filing the Return of Income and the petitioner's conduct in potentially delaying the reassessment proceedings.

Regarding the judgments cited by the petitioner, the Court found them inapplicable to the present case based on the specific facts and circumstances. The Court highlighted that the petitioner had submitted to the Assessing Officer's jurisdiction and objected during reassessment proceedings, thus having an effective alternative remedy available under the Act.

Ultimately, the High Court dismissed the petition, stating that the petitioner, having participated in the proceedings, did not merit the Court's exercise of extraordinary jurisdiction under Article 226. The Court allowed a stay of the order for a limited period to facilitate compliance with the Act's provisions, excluding this period for limitation calculation under Section 153 of the Act.