2023 (3) TMI 286 - HC - Income Tax

Maintainability of the writ petition in view of the alternative remedy available u/s 246 of filing an appeal - Reopening of assessment u/s 147 - Validity of order passed u/s 148A(d) of the Act, as it stood amended - HELD THAT - Since the Assessing Officer while passing the order has given an interpretation and held against the petitioners, therefore, necessity arises for this Court to consider the correctness of such finding, which finding cannot be agitated before the Assessing Officer for re-assessment proceedings. The Allahbad High Court in the case of Rajeev Bansal Vs. Union of India Others 2023 (2) TMI 1081 - ALLAHABAD HIGH COURT as well as Keenara Industries Pvt. Ltd Vs. Income Tax Officer 2023 (3) TMI 104 - GUJARAT HIGH COURT have entertained the writ petitions where alternative remedy was available. The Calcutta High Court in the case of Aashiyana Housing Ltd. Vs. Union of India 2023 (3) TMI 221 - CALCUTTA HIGH COURT has held that the alternative remedy will not operate as an absolute bar for entertaining the writ petition as jurisdictional issue goes to the root of the matter. Therefore, we are of the view that appellant has made out a case for entertaining this appeal and had also stayed the further re-assessment proceedings. The Apex Court in the case of Red Chilli International Sales 2023 (1) TMI 674 - SC ORDER The provisions of reopening under the act of 1961 has undergone an amendment by the Finance Act, 2021 and consequently, the matter would require deeper and indepth consideration keeping in view the earlier case law. Accordingly, we set aside the observations made by the High Court in the impugned judgment observing that the writ petitions would not be maintainable in view of the alternative remedy. We do deem it open to examine this issue in the present case after having examined the notice u/S 148A(b), including annexure thereto, reply filed by the petitioner and the order under Section 148A(d). Accordingly, this batch of writ petitions is admitted for final hearing. In the meanwhile, there shall be interim stay of the order passed u/s 148A(d) of the Act as well as consequential notice u/s 148 of the Act, until further orders.

Summary

Issues:
1. Maintainability of writ petitions challenging orders passed under the Income Tax Act.
2. Jurisdictional issues raised by the petitioners.
3. Consideration of alternative remedy available under Section 246 of the Income Tax Act.
4. Interpretation of the law regarding assessment proceedings.
5. Applicability of previous judgments in similar cases.
6. Admission of the batch of writ petitions for final hearing and granting interim stay on the impugned orders.

Detailed Analysis:
1. The High Court considered a batch of writ petitions challenging orders passed under Section 148A(d) of the Income Tax Act and notices issued under Section 148 for reassessment proceedings for the Assessment Year 2013-14. The Revenue raised a preliminary objection regarding the maintainability of the writ petitions due to the availability of an alternative remedy under Section 246 for filing an appeal.

2. The jurisdictional issue raised by the petitioners was a key point of consideration. The Court examined the circumstances under which a challenge could be entertained to an order passed under Section 148A(d) of the Act. The Court noted that jurisdictional issues are crucial and exceptional factors for the exercise of jurisdiction under Article 226 of the Constitution.

3. Despite the availability of an alternative remedy for filing an appeal under Section 246, the Court held that jurisdictional issues are fundamental and go to the root of the matter. The Court referred to previous judgments where High Courts entertained writ petitions even when an alternative remedy was available, emphasizing that jurisdictional issues are of paramount importance.

4. The Court analyzed the interpretation of the law regarding assessment proceedings and the applicability of new laws relating to assessment. The Revenue contended that the writ petitions were not maintainable based on a judgment of the Apex Court, but the Court deemed it necessary to examine the correctness of the findings made by the Assessing Officer.

5. The Court referred to judgments from other High Courts and the Apex Court to support its decision to admit the batch of writ petitions for final hearing. The Court highlighted the need for a deeper consideration of the matter, especially in light of the amendments to the provisions of reopening under the Income Tax Act.

6. Ultimately, the Court admitted the batch of writ petitions for final hearing and granted an interim stay on the impugned orders passed under Section 148A(d) of the Act and consequential notices issued under Section 148 until further orders. The respondent Revenue was given the opportunity to file a detailed reply on merits, if not already done.