2018 (9) TMI 719 - HC - Income Tax

Order of assessment passed u/s 143(3) challenged - statutory right of appeal against the assessment order denied - inability of the petitioner to file appeal against the assessment order in view of the finding/observation made at paragraph No.5.0 - Held that - Perusal of the said observation made by the AO would only indicate that according to the Assessing Officer, the petitioner is not entitled to raise the question of jurisdiction. The order of assessment does not prevent the petitioner from filing any appeal as such before the competent Appellate Authority. Even though the AO may say so that the petitioner is not entitled to raise the question of jurisdiction, while filing the appeal, but that will not prevent the petitioner from raising such ground, if the same is available to him in accordance with law. Needless to say that if any such ground is raised, it is open to the Revenue to oppose such ground before the Appellate Authority, who in turn, will decide the question of jurisdiction as well. Therefore, we do not think that the petitioner s apprehension is well founded in respect of filing an appeal before the Appellate Authority. This Court is of the view that the petitioner is entitled to file appeal against the impugned order of assessment before the Appellate Authority. With regard to the classification of the land is concerned, needless to say, it is absolutely a factual aspect of the matter, which has to be considered and decided by the next fact finding authority viz., Appellate Authority, while considering the appeal. Therefore, the contentions raised by the petitioner on the merits of the assessment cannot be gone into by this Court, as the petitioner has an effective alternative remedy of appeal before the Appellate Authority.

Summary

Issues:
Challenging assessment order under Section 143(3) of the Income Tax Act, 1961 for the assessment year 2009-10.
1. Objection against observation preventing appeal rights.
2. Dispute regarding classification of land for tax purposes.

Analysis:

1. Objection against observation preventing appeal rights: The petitioner raised concerns over an observation in the assessment order that allegedly hindered the exercise of their statutory right to appeal. The observation stated that the petitioner cannot raise jurisdictional grounds in appeal due to the case transfer. However, the High Court clarified that this observation does not bar the petitioner from filing an appeal. The Court emphasized that the petitioner can raise jurisdictional issues in the appeal process, and the Appellate Authority would have the jurisdiction to decide on such matters. Therefore, the Court held that the petitioner is entitled to file an appeal against the assessment order before the Appellate Authority.

2. Dispute regarding classification of land for tax purposes: The petitioner contended that the lands mentioned in the assessment order should be treated as agricultural land falling under capital gains exemption. On the other hand, the respondents argued that such objections on the classification of land should be raised in an appeal before the Appellate Authority, as factual aspects need to be considered by the next fact-finding authority. The High Court agreed that the classification of land is a factual matter to be determined by the Appellate Authority during the appeal process. The Court highlighted that the petitioner has the right to present all contentions, including those raised in the writ petition, as grounds of appeal before the Appellate Authority. Therefore, the Court directed the petitioner to file an appeal before the Appellate Authority within three weeks, allowing the Appellate Authority to decide on the merits of the contentions and classification of land in accordance with the law.

In conclusion, the High Court disposed of the writ petition by directing the petitioner to appeal before the Appellate Authority to address the issues raised regarding the assessment order, including the objection against the observation and the dispute over the classification of land. The Court emphasized the importance of utilizing the statutory remedy of appeal for resolving factual matters and jurisdictional concerns effectively.