2022 (6) TMI 458 - HC - Income Tax

Validity of reopening of assessment - notice under Section 148A (b) - as contented that the stand of the petitioner has not been taken into consideration resulting in miscarriage of justice - HELD THAT - The debate is not new. While dealing with the similar situation under the old Act i.e. Indian Income Tax Act 1922 Division Bench of this Court in Lachhman Das Nayar and others vs. Hans Raj Puri Income-Tax Officer Amritsar and others 1952 (9) TMI 45 - HIGH COURT OF PUNJAB AND HARYANA The consistent view is that at the stage where the proceedings have not even been concluded by the statutory authority the writ Court should not interfere at such pre-mature stage. Moreover it is not a case where from bare reading of notice it can be axiomatically held that the authority has clutched upon the jurisdiction not vested in it. The correctness of order under Section 148A(d) is being challenged on the factual premise contending that jurisdiction though vested has been wrongly exercised. By now it is well settled that there is vexed distinction between jurisdictional error and error of law/fact within jurisdiction. For rectification of errors statutory remedy has been provided. We find that there is no reason to warrant interference by this Court in exercise of the jurisdiction under Article 226/227 of the Constitution of India at this intermediate stage when the proceedings initiated are yet to be concluded by a statutory authority. Hence the writ petition stands dismissed.

Summary

Issues:
1. Whether the writ Court should venture into the merits of the controversy at the stage of notice under Section 148 when the assessing officer is yet to frame assessment/re-assessment?

Analysis:

The petitioner, a partnership firm, filed a writ petition seeking to quash a notice issued under Section 148A(b) of the Income Tax Act, 1961, and an order passed under Section 148A(d) for the assessment year 2018-19. The petitioner contended that their objections were not considered, resulting in a miscarriage of justice. The primary issue raised was whether the Court should intervene in the controversy at the notice stage before the assessing officer completes the assessment/re-assessment process as required under Section 147 of the Act.

The Court referred to previous judgments and observed that the legislature has entrusted the determination of facts and law to the Income-tax Officers. It was held that challenging the assessing officer's action through a writ of prohibition or mandamus is not permissible as the Act provides a complete machinery for assessment/reassessment, penalty imposition, and obtaining relief from improper orders. The Court emphasized that the petitioner has adequate remedies available under the Act and should not bypass the statutory procedures to invoke the High Court's jurisdiction prematurely.

Furthermore, the Court cited a Delhi High Court case where it was noted that the petitioner would have ample opportunity during statutory proceedings to challenge any erroneous findings. The Supreme Court's decision in a similar context highlighted that the sufficiency or correctness of material is not to be considered at the notice stage, leaving questions of fact and law to be decided by the assessing authority. The consistent view from various judgments was that the Court should not interfere at a premature stage when proceedings are ongoing and statutory remedies are available.

Based on the settled legal propositions, the Court dismissed the writ petition, stating that there was no justification for interference at an intermediate stage when proceedings initiated by the statutory authority were yet to be concluded. The Court clarified that its decision should not be construed as an opinion on the case's merits, maintaining the distinction between jurisdictional errors and errors of law/fact within jurisdiction.

In conclusion, the Court held that the writ petition was dismissed, emphasizing the importance of allowing the statutory authority to complete the assessment/re-assessment process before seeking judicial intervention.