2020 (5) TMI 143 - HC - Income Tax

Validity of assessment order - demand notice for lack of jurisdiction in the Assessing Officer - availability of alternative remedy - HELD THAT - A bare perusal of the response filed on behalf of the petitioner pursuant to the notice u/s 142(1) calling upon the petitioner as to why his income should not be treated as income from business would reveal that no objection worth the name in relation to the jurisdiction was raised. The response was confined only to the question raised and based on that the AO by exhaustively dealing with the material available before him and dealing with the limited issues raised in reply, passed the assessment order. The assessment order is open to appeal under Part A of Chapter XX of the Act, 1961. Various submissions sought to be made questioning the jurisdiction of the authority, in the circumstances of the case, can very well be raised before the appellate authority and apparently no case for bypassing the alternative remedy of appeal has been made out. Hon ble Supreme Court in Genpact India Private Ltd vs. Deputy Commissioner of Income Tax Ors 2019 (11) TMI 1118 - SUPREME COURT reiterating the principles laid down in Commissioner of Income Tax Ors. vs. Chhabil Dass Agarwal 2013 (8) TMI 458 - SUPREME COURT and Authorised Officer, State Bank of Travancore Anr. vs. Mathew K.C. 2018 (2) TMI 25 - SUPREME COURT upheld the dismissal of writ petition on account of availability of alternative remedy against an assessment order. Writ petition challenging the assessment order and demand notice on account of availability of alternative remedy of appeal is not entertained and the same is, therefore, dismissed.

Summary

Issues:
Challenge to assessment order and demand notice for lack of jurisdiction in the Assessing Officer.

Analysis:
The petitioner filed a writ petition against the assessment order and demand notice dated 23/12/2019. A notice under Section 143(2) of the Income Tax Act, 1961 was issued for limited scrutiny, focusing on deduction/exemption from capital gains. Subsequently, notices under Section 142(1) were sent to the petitioner for providing details. The petitioner responded to these notices, claiming that income earned should be assessed as capital gains, not business income. Despite this, the Assessing Officer passed the assessment order and demand notice. The petitioner argued lack of jurisdiction due to the inquiry scope being enlarged beyond limited scrutiny and absence of permission from the Principal Commissioner of Income Tax.

The High Court examined the submissions and material on record. It noted that the petitioner did not raise objections regarding jurisdiction in response to the notice calling for reasons why income should not be treated as business income. The assessment order could be appealed under the Income Tax Act, and challenges to jurisdiction could be raised before the appellate authority. Citing legal precedents, the court emphasized the availability of alternative remedies against assessment orders. Referring to relevant case law, the court dismissed the writ petition due to the existence of an alternative remedy of appeal, allowing the petitioner to pursue appropriate legal proceedings.

In conclusion, the High Court dismissed the writ petition challenging the assessment order and demand notice, citing the availability of an alternative remedy through the appellate process. The court highlighted the importance of exhausting alternative remedies before seeking judicial intervention.