2019 (4) TMI 968 - HC - Income Tax

Demand u/s 201 as barred by limitation - pre-emptive petition to restrain the respondents from passing an order of assessment - notice u/s 131 - alternative remedy - HELD THAT - Petitioner cannot be permitted to bypass the statutory provisions and preempt departmental authorities from exercising statutory powers under the Act through this misconceived writ petition. Against such an order, the aggrieved party has an adequate and efficacious departmental remedy, therefore, at this juncture, we are not inclined to put paid to the show cause notice and the proceedings initiated thereunder. The reliance placed on the decisions of Gujarat and Bombay High Court are clearly distinguishable in the facts and circumstances of the case at hand, hence, they would not come to the rescue of petitioner. We deliberately refrain ourselves from making any observation touching the merit of the case, lest it may cause prejudice to the petitioner or the revenue as the case may be, in the final outcome of the proceedings.

Summary

Issues:
1. Pre-emptive petition to restrain respondents from passing an order of assessment.
2. Validity of the show cause notice under Section 201 of the Act.
3. Petitioner's attempt to bypass statutory provisions through a writ petition.

Analysis:
1. The judgment deals with a pre-emptive petition filed by a Co-operative Bank to prevent the respondents from passing an order of assessment. The bank, as an assessee, is required to pay tax and deduct TDS for deposit to the Central Government. A survey was conducted at the bank's premises to verify TDS compliance. Subsequently, a notice under Section 131 was issued to the bank's General Manager for providing necessary details and documents. The petitioner contended that the show cause notice under Section 201 of the Act for the financial year 2011-12 was time-barred, leading to the initiation of this writ petition seeking relief from the assessment proceedings.

2. The court, after hearing the petitioner's advocate and examining the material on record, observed that the petitioner had been given an opportunity to show cause before the final order is passed. The court held that the petitioner cannot circumvent statutory provisions and prevent the departmental authorities from exercising their powers under the Act through the writ petition. The court distinguished the present case from decisions of Gujarat and Bombay High Courts, emphasizing that those decisions were not applicable in the current scenario. The court refrained from making any observations on the case's merits to avoid prejudicing either party and disposed of the petition summarily.

3. The judgment underscores the importance of allowing departmental authorities to follow statutory procedures without interference through preemptive petitions. It highlights the availability of adequate departmental remedies for aggrieved parties and cautions against bypassing established legal processes. By refusing to grant relief in this case, the court emphasizes the need to respect statutory mechanisms and avoid premature interventions that may hinder the proper adjudication of tax matters.