2023 (3) TMI 1118 - HC - Income Tax

Validity of assessment order u/s 143(3) r.w.s.144B - difference between not proper dealing or sufficiently dealing with no reasoning or not dealing at all - as argued while passing the impugned assessment order, formalities under Standard Operating Procedure (SOP) concerned has not been adhered to by not dealing with the rebuttal by the petitioner point-wise - HELD THAT - It is not a case that the AO has not at all adhered to or complied with the formalities of SOP. The said impugned order has elaborate discussion on the point-wise rebuttal. It seems that petitioner is not satisfied with the reasoning and the way of dealing points of the rebuttal by the petitioner. There is a difference between not proper dealing or sufficiently dealing with no reasoning or not dealing at all. In this case it appears that petitioner is not satisfied with the reasoning and finding recorded by the AO in the impugned assessment order. This case does not fall in those categories of cases where the impugned order is either without jurisdiction or is patently in contrary to any statutory provisions or there is violation of principle of natural justice or there is any procedural irregularities in course of impugned assessment proceeding. So far as finding and the reasoning given by the AO /any adjudicating authority is concerned which is based on evidence, writ court in exercise of its constitutional writ jurisdiction under Article 226 of the Constitution of India should not act as an appellate authority over such assessment order and substitute the reasoning and finding by an Assessing Officer with its own finding and reasoning. WP dismissed.

Summary

Issues: Challenge to assessment order under Income Tax Act, adherence to Standard Operating Procedure (SOP), satisfaction with reasoning and findings, jurisdiction of writ court under Article 226.

Challenge to Assessment Order under Income Tax Act:
The petitioner challenged the assessment order dated 20th December, 2022 under Section 143(3) read with Section 144B of the Income Tax Act, 1961. The petitioner contended that the formalities under the Standard Operating Procedure (SOP) were not adhered to by the Assessing Officer, specifically by not dealing with the petitioner's rebuttal point-wise. However, upon perusal of the impugned assessment order, the court found that the Assessing Officer did adhere to the formalities of SOP and provided an elaborate discussion on the point-wise rebuttal. The court noted that the petitioner's dissatisfaction stemmed from the reasoning and the manner in which the points of rebuttal were addressed by the Assessing Officer.

Adherence to Standard Operating Procedure (SOP):
The court emphasized that there is a distinction between not properly dealing with a matter and not dealing with it at all. In this case, it was observed that the petitioner's dissatisfaction primarily arose from the reasoning and findings recorded by the Assessing Officer in the assessment order. The court highlighted that the impugned order contained a detailed discussion on the point-wise rebuttal, indicating compliance with the SOP requirements. The court clarified that the petitioner's dissatisfaction with the reasoning and findings did not amount to a failure to adhere to the SOP.

Satisfaction with Reasoning and Findings:
While acknowledging the petitioner's discontent with the reasoning and findings of the Assessing Officer, the court reiterated that it should not act as an appellate authority over the assessment order. The court emphasized that in cases where the reasoning and findings are based on evidence, the writ court, in its constitutional writ jurisdiction under Article 226 of the Constitution of India, should not substitute its own reasoning and findings for those of the Assessing Officer. The court highlighted that the dissatisfaction with the findings does not warrant interference by the writ court unless there are grave errors or violations.

Jurisdiction of Writ Court under Article 226:
The court concluded that the impugned assessment order was appealable under the statute and did not fall under the categories of orders that are without jurisdiction, contrary to statutory provisions, or in violation of natural justice principles. The court emphasized that in cases where the reasoning is evidence-based, the writ court should refrain from acting as an appellate authority. Consequently, the court dismissed the writ petition, highlighting that the writ court should not substitute its own reasoning and findings for those of the Assessing Officer unless there are substantial errors or procedural irregularities warranting intervention.