2016 (5) TMI 948 - HC - Income Tax

NRI challenging the assessment order u/s 144 - Held that - The Assessing Officer has recorded a categorical finding of fact that the return was filed by the petitioner as a resident on 31 March 2014 and the claim of the petitioner that he was a Non Resident Indian on the basis of a passport could not be substantiated by him. In this regard information was sought from the Foreigners Regional Registration Office and the department informed that the records maintained at the Indra Gandhi Airport, New Delhi, were got checked but they do not substantiate the claim of the petitioner. The Income Tax Officer, therefore, concluded that the claim of the petitioner of being a Non Resident Indian remains unsubstantiated and the status of the petitioner would be that of a resident . Be that as it may, we are not inclined to entertain this petition as the petitioner has an alternative remedy of filing an appeal under Section 246 (1) (a) of the Act. Section 246 (1) provides that subject to the provisions of sub- section (2), any assessee aggrieved by any of the orders mentioned therein the Assessing Officer may appeal to the Deputy Commissioner (Appeals). The orders include an order where the assessee denies his status as that of a resident and claims to be Non Resident . The impugned order is, therefore, clearly appealable. We, therefore, as the petitioner has a statutory right of filing an appeal under Section 246 (1) (a) of the Act, decline to entertain this petition.

Summary

Issues:
Challenge to assessment order jurisdiction under Section 144 of the Income Tax Act, 1961 by a Non Resident Indian.

Analysis:
The petitioner, claiming to be a Non Resident Indian, contested the assessment order dated 21 March, 2016, issued by the Income Tax Officer Ward-3 (1), Bulandshahar, under Section 144 of the Income Tax Act, 1961 for the assessment year 2013-14. The petitioner argued that the assessing officer did not have jurisdiction as it solely vested with the Commissioner of Income Tax (International Taxation)-3, Delhi, or an authorized person as per circulars issued. The assessing officer found that the petitioner filed as a "resident" on 31 March 2014, and the claim of being a Non Resident Indian based on a passport was unsubstantiated. Despite seeking information from relevant authorities, the claim remained unverified, leading to the conclusion that the petitioner's status was that of a "resident."

A preliminary objection was raised regarding the petitioner's right to challenge the jurisdiction issue through a writ petition, contending that the matter could be addressed in an appeal under Section 246 (1) (a) of the Act. The petitioner's counsel cited a Supreme Court decision to support the argument that a writ petition could be filed when the question of jurisdiction was at stake. However, the court noted that the impugned order was appealable under Section 246 (1) (a), which allows an assessee aggrieved by certain orders, including those related to residency status, to appeal to the Deputy Commissioner (Appeals).

The court emphasized that the statutory right of appeal provided under Section 246 (1) (a) must be availed of, as the Act offers a complete mechanism to challenge assessment orders. Referring to a Supreme Court judgment, the court highlighted that orders of assessment should be challenged through the prescribed statutory route and not via a petition under Article 226 of the Constitution. Consequently, the court declined to entertain the petition, stating that the petitioner had the statutory remedy of filing an appeal under Section 246 (1) (a). The petition was dismissed accordingly.