2023 (12) TMI 1134 - HC - Income Tax

Reopening of assessment u/s 147 - constitutional validity of Section 115BBE questioned - HELD THAT - It is settled law that Statutory Acts and their provisions are not to be declared unconstitutional on the fanciful theory that power would be exercised in an unrealistic fashion or in a vacuum or on the ground that there is an apprehension of misuse of Statutory Provision or possibility of abuse of power. It must be presumed, unless the contrary is proved, that administration and application of a particular law would be done not with an evil eye and unequal hand . Consequently, at this stage, Section 115BBE of the Act cannot be held unconstitutional on the ground that there is an apprehension of misuse of the said provision. Further, it is settled law that the Act provides a complete machinery for assessment/re-assessment of tax and the assessee is not permitted to abandon that machinery to invoke jurisdiction of the High Court under Article 226 of the Constitution See Commissioner of Income Tax Ors. vs. Chhabil Dass Agarwal, 2013 (8) TMI 458 - SUPREME COURT . Consequently, the present writ petitions and pending applications are dismissed.

Summary

Issues involved: Challenge to orders under Section 148A(d) of the Income Tax Act, 1961 for Assessment Years 2015-16, 2016-17, 2017-18, challenge to notices issued under Section 148 of the Act, and challenge to the constitutional validity of Section 115BBE of the Act.

Challenge to orders and notices under Section 148: The petitioner challenged the orders and notices issued under Section 148 of the Income Tax Act, arguing that the notices were issued after the three-year limitation period without obtaining sanction from the appropriate authority. The Respondents contended that final assessment orders had been passed for the relevant years, and the issue of limitation should be raised before the Appellate Authorities as it involves a mixed question of fact and law.

Constitutional validity of Section 115BBE: The petitioner raised concerns about the constitutional validity of Section 115BBE of the Act, alleging that its application in the present case was unfair and violative of constitutional provisions. The petitioner argued that the section could lead to subjective exercise of discretion by Assessing Officers, resulting in differential treatment of assessees. However, the court cited established legal principles that statutory provisions should not be declared unconstitutional based on hypothetical misuse or abuse, emphasizing that the law provides safeguards against biased application.

Legal Precedents: The court referred to legal precedents to support its decision, highlighting that the mere possibility of abuse of a statutory provision does not render it invalid. It emphasized that the Act provides a comprehensive mechanism for tax assessment, and aggrieved parties should follow the prescribed procedures rather than directly approaching the High Court under Article 226 of the Constitution.

Conclusion: The High Court dismissed the writ petitions and pending applications while granting the petitioner the liberty to raise all contentions before the Appellate Authority in accordance with the law. The judgment underscored the importance of following the established legal procedures for tax assessment and reiterated that statutory provisions should not be invalidated based on speculative concerns of misuse.