2024 (4) TMI 54 - HC - Income Tax

Maintainability of the writ petition in HC - subject Matter of challenge before the writ Court - Validity of reassessment order passed - petitioner has also challenged the very basis for issuing notices under sections 148 and 148-A of Income Tax Act 1961 - case set-up by the petitioner is that there can be no second proceeding for the same period and on the same issue which was the basis for the previous proceeding in which a final order passed and the said order is a subject matter of challenge in Appeal HELD THAT - The powers exercised by the writ Court under Article 226 of the Constitution of India are plenary in nature. It is now well-settled that a technical objection or technicality of any nature shall not be an obstruction in exercise of such powers by the writ Court except the self-imposed restriction by the writ Court. However this is also too well-settled that it shall be a sound exercise of judicial discretion if the writ Court keeps in mind the statutory remedy to the aggrieved person and declines to entertain the petition. This restriction is followed by the writ Courts with more rigors in the matters relating to fiscal matters. Furthermore in a catena of judgments the Hon ble Supreme Court has indicated that without a pre-deposit as provided under the statute for preferring an appeal or for seeking an order of stay the writ petition shall not be entertained. Recently in the context of Micro Small and Medium Enterprises Development Act 2006 the Hon ble Supreme Court has held that without pre-deposit of 75% of the awarded amount as provided under section 19 of Micro Small and Medium Enterprises Development Act 2006 the writ petition was not maintainable refer M/s India Glycols Limited Vs. Micro and Small Enterprises Facilitation Respondents Council Medchal Malkajgiri 2023 (11) TMI 1240 - SUPREME COURT Under the Income Tax Act there is a similar provision for deposit in cases where the assessee seeks an order of stay. Secondly this is also no longer in the realm of doubt that a notice issued by a statutory authority cannot be made the subject matter of challenge before the writ Court. The assessing officer who issued the notice u/s 148 and 148-A of Income Tax Act 1961 is the authority vested with the power to issue a notice under these provisions. However the plea put forth by the petitioner is that the notice under section 148-A has been issued in breach of natural justice inasmuch as no opportunity of hearing was provided to the assessee. On this issue all that we intend to indicate is that the requirements of natural justice are not inflexible and its applicability shall be determined on the basis of the facts in each case. Thus present writ petition has been dismissed on the ground that the petitioner has efficacious remedy under the Income Tax Act 1961.

Summary

Issues Involved:
Challenging final order of assessment and demand notice under Income Tax Act, 1961.

Summary:
The petitioner challenged the assessment order and demand notice dated 28th March 2023, along with penalty notices under sections 270A, 271A, and 271B. The petitioner also disputed the basis for issuing notices under sections 148 and 148-A of the Income Tax Act, 1961. The Revenue objected to the maintainability of the writ petition, stating that statutory notices can only be challenged if illegal or without jurisdiction, and that the petitioner has an appeal remedy under section 246 of the Act.

The petitioner, running a proprietary concern, received multiple notices under different sections of the Income Tax Act for the assessment year 2018-19. The petitioner argued against multiple proceedings for the same period and issue, highlighting previous legal challenges and objections raised during the process. The Assessing Officer added a significant amount to the total income in the assessment order dated 28th March 2023, leading to further challenges by the petitioner.

The petitioner's main grounds for challenge were detailed in the writ petition, emphasizing previous proceedings, appeals, and penalty actions. The legal framework of the Income Tax Act entrusts the determination of facts and law to Income Tax Officers, with provisions for assessment, reassessment, and relief against improper orders. The court referred to relevant legal precedents to support the arguments presented by both parties.

The Revenue contended that the notices were issued based on information from the Commercial Taxes Department, alleging bogus transactions to suppress gross profit. The court refrained from making judgments on the merits, emphasizing the petitioner's right to appeal the assessment order. Ultimately, the writ petition was dismissed, citing the petitioner's available remedies under the Income Tax Act, 1961.

The judgment was delivered by Hon'ble the Acting Chief Justice Shree Chandrashekhar and Hon'ble Mrs. Justice Anubha Rawat Choudhary of the Jharkhand High Court.