2024 (8) TMI 1505 - HC - Income Tax

Validity of Reassessment u/s 147 - applicability of Section 151 as the sanction has not been granted by the appropriate authority as specified - HELD THAT - Once the petitioner has availed of an alternate remedy as provided under the Income Tax Act, namely of a substantive appeal being filed, and if the assessment order as also the notices issued to the petitioner prior thereto u/s 148A and u/s 148 are contrary to the substantive provisions of Section 151A and Section 151 of the Act, as interpreted by this Court in Hexaware 2024 (5) TMI 302 - BOMBAY HIGH COURT and Siemens 2023 (9) TMI 552 - BOMBAY HIGH COURT the Appellate Authority as also the Revisionary Authority being bound by the said decisions of the jurisdictional High Court, need to consider such legal position. Thus, the petitioner is not precluded from raising all such contentions, as raised before us in the present proceedings, before the said authority. Accordingly, we are of the opinion that the proceedings which are pending before the CIT(A) as also the Revisionary proceedings, be decided considering the contentions of the petitioner namely as to whether the impugned assessment order as also the notice under Section 148 of the Act is illegal when tested on the law as declared by this Court in the aforesaid decisions. ORDER - The petitioner shall pursue the proceedings before the CIT(A) against the impugned assessment order as also the proceedings before the Revisionary Authority. It is open to the petitioner to raise contentions in regard to the illegality of the notice issued to the petitioner under Section 148, in the light of the decisions of this Court in Hexaware and Siemens (supra). Till the proceeding before the Appellate Authority or Revisionary Authority are decided, the impugned assessment order shall remain stayed.

Summary

Issues:
Challenge to reassessment proceedings under Article 226 of the Constitution of India.

Analysis:
The petitioner filed a petition under Article 226 seeking various reliefs, including quashing of the show cause notice, assessment order, and other consequential notices. The petitioner argued that the assessment order and notice were invalid due to lack of sanction under Section 151 of the Income Tax Act. The petitioner had also initiated appeal and review proceedings against the impugned order. However, the respondent contended that the petitioner should pursue the statutory remedies already availed, as the appellate and revisionary authorities are bound by the decisions of the High Court. The Court noted that the petitioner's contentions could be raised before the appellate and revisionary authorities, considering the legal position established in previous judgments.

The Court emphasized that when statutory remedies are available and pending, it is not appropriate to entertain writ petitions to adjudicate on issues that can be addressed by the appellate authority. The Court highlighted that allowing such petitions would burden the court with matters that should be decided by the appropriate authorities. Therefore, the Court concluded that the petitioner should continue with the pending proceedings before the appellate and revisionary authorities rather than seeking relief through the writ petition.

The Court acknowledged the petitioner's argument that if the impugned assessment order and notice were indeed illegal as per the High Court's previous decisions, they should not be given effect until the appellate and revisionary proceedings are concluded. Consequently, the Court directed the petitioner to pursue the proceedings before the CIT(A) and the Revisionary Authority, allowing the petitioner to raise contentions regarding the legality of the notice under Section 148 based on the previous judgments. The Court ordered a stay on the assessment order until the conclusion of the appellate and revisionary proceedings, keeping all contentions of the petitioner open for consideration.

In conclusion, the Court disposed of the petition with the directive for the petitioner to continue with the pending proceedings before the appellate and revisionary authorities, while also staying the assessment order until the completion of those proceedings. The Court made it clear that all contentions raised by the petitioner in the ongoing proceedings are preserved for further consideration.