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2018 (2) TMI 1372 - HC - Income TaxAssessment u/s 158BD r.w.s. 158 BC(c) - availment of appeal remedy before ITAT - Held that - Complicated factual issues are to be first thrashed out before one goes into the aspect as to which of the legal principles as put forth would apply. Record of proceedings shows that there has been an order of interim stay granted by this Court in this writ petition, when the writ petition was entertained on 26.11.2002 and till date, interim order is in force and infact, it has been made absolute on 31.12.2002, much prior to the filing of the counter affidavit by the 1st respondent, dated 22.08.2003. Therefore, while relegating the assessee to avail the appellate remedy before the ITAT, this Court is inclined to direct that the impugned assessment proceedings shall continue to remain stayed till the disposal of the appeal by the Tribunal. Writ petition is held to be not maintainable and accordingly dismissed and the petitioner is granted liberty to file an appeal before the ITAT as against the impugned assessment order.
Issues:
Challenging assessment order under Income Tax Act for block period, Validity of notice issued under Section 158 BC, Jurisdiction of the assessing authority, Compliance with satisfaction note requirement under Section 158BD/158BC, Alternative remedy before Income Tax Appellate Tribunal (ITAT). Analysis: 1. Validity of Notice under Section 158 BC: The petitioner challenged the assessment order dated 31.10.2002, arguing that it was barred by limitation as the notice issued on 11.10.2000 under Section 158 BC required the petitioner to file a return of income. The petitioner contended that the limitation period ended on 31.07.2002, making the assessment order beyond the prescribed time limit. The petitioner also raised concerns regarding the defect in the notice issued under Section 158 BC, emphasizing that the respondents could not amend or cure the defect as per Section 292(B) of the Income Tax Act. 2. Jurisdiction of Assessing Authority: The petitioner disputed the jurisdiction of the assessing authority, claiming that the notice dated 11.10.2000 mentioned Section 158 BC, and the petitioner only became aware of the assessment under Section 158 BD when the order was passed. The petitioner relied on a decision by the Division Bench in a similar case to argue that Section 158 BD would apply to a person other than the one searched, and Section 158 BC would not be applicable in such cases. 3. Compliance with Satisfaction Note Requirement: The petitioner contested the absence of a satisfaction note in the assessment proceedings, referencing a circular issued by the Central Board of Direct Taxes regarding the recording of satisfaction notes under Section 158BD/158BC. The petitioner argued that no satisfaction note was prepared in the instant case, which was disputed by the petitioner. 4. Alternative Remedy before ITAT: The Revenue contended that the legal issues raised in the writ petition were addressed in a previous decision by a Division Bench. The court acknowledged the existence of an alternative remedy before the ITAT and emphasized the importance of pursuing such remedies. The court held that the petitioner should avail the appeal remedy before the ITAT, considering the conflicting contentions raised by the petitioner and the factual complexities involved. 5. Final Decision: The court dismissed the writ petition as not maintainable, granting the petitioner liberty to file an appeal before the ITAT against the assessment order. The court directed that the assessment proceedings remain stayed until the appeal is disposed of by the Tribunal. Both parties were permitted to present their contentions and factual material before the ITAT, independent of any observations made in the court's order. This detailed analysis of the judgment addresses the key issues involved in the legal dispute concerning the assessment order under the Income Tax Act and the challenges raised by the petitioner regarding the validity of the notice, jurisdiction of the assessing authority, compliance with statutory requirements, and the availability of an alternative remedy before the ITAT.
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