2022 (6) TMI 1500 - HC - Income Tax

Reopening of assessment - Legality of the order passed u/s 148A(d) and notice u/s 148 - Writ Court interference at the stage of notice u/s 148 when the assessment/reassessment is pending u/s 147 of the Act - HELD THAT - Where the proceedings have not even been concluded by the statutory authority, the writ Court should not interfere at such a 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 u/s 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. In the light of aforesaid settled proposition of law, 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. Challenge to notice issued under Section 148A(b) of the Income Tax Act, 1961.
2. Legality of the order passed under Section 148A(d) and notice under Section 148 dated 04.04.2022.
3. Whether the writ Court should interfere at the stage of notice under Section 148 when the assessment/reassessment is pending under Section 147 of the Act.

Analysis:
The petitioner challenged a notice issued under Section 148A(b) of the Income Tax Act, 1961, along with an order passed under Section 148A(d) and a notice under Section 148 dated 04.04.2022. The petitioner, an assessee under the Act, was asked to show cause for escapement assessment of income for the assessment year 2015-2016. The petitioner sought more time to respond, but the respondent proceeded to pass the order under Section 148A(d) and issued a notice under Section 148 on the same date. The petitioner did not disclose the merits of the case in the writ petition, and no assessment order had been passed under Section 147 of the Act yet.

The primary issue in the present writ petition was whether the writ Court should intervene at the stage of notice under Section 148 when the assessment/reassessment was pending under Section 147 of the Act. The Court referred to past judgments and held that the statutory authority should conclude the proceedings before interference by the writ Court. The Court emphasized that the distinction between jurisdictional error and error of law/fact within jurisdiction is crucial, and statutory remedies are available for rectification of errors. The consistent view was that interference at a premature stage is unwarranted, especially when the statutory proceedings are ongoing.

The Court cited various judgments to support its decision, emphasizing that the correctness of the order under Section 148A(d) should be challenged based on factual premises, and statutory remedies should be pursued for rectification. The Court concluded that there was no reason to interfere at the intermediate stage when the proceedings were yet to be concluded by the statutory authority. Therefore, the writ petition was dismissed, clarifying that the decision should not be construed as an opinion on the merits of the case.