2024 (10) TMI 759 - HC - Income Tax

Validity of reopening of assessment - applicability of Section 151 of the Act as the sanction has not been granted by the appropriate authority as specified under the said provision - HELD THAT - Once the petitioner has availed of an alternate remedy as provided under the Act, namely, of a substantive appeal being filed, and if the assessment order as also the notices issued to the petitioner prior thereto under Section 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 and Siemens 2024 (5) TMI 302 - 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 u/s 148 of the Act is illegal when tested on the law as declared by this Court in the aforesaid decisions. We are of the opinion that an approach ought not to be followed that when the appellate authority is already seized with the proceedings, we entertain writ petitions to adjudicate, what can certainly be adjudicated by the appellate authority, considering the said decisions of this Court. As rightly pointed by Respondents an approach otherwise, would create a situation that all matters which are pending before the Appellate Authority and which are supposed to be decided in accordance with law involving issues on applicability of the decisions of this Court, in disposing of the proceedings would be required to be entertained by this Court. Certainly, such approach cannot be adopted by the Court. We are hence of the opinion that it would be appropriate that the petitioner-assessee pursues such pending proceedings as already filed before the appropriate Appellate Authority and Revisionary Authority. Accordingly, we are not persuaded to entertain the present proceedings which assail the assessment order when appeal is already filed by the petitioner as also the revision proceedings are pending.

Summary

Issues:
Challenge to show cause notice, order, and notices under Income Tax Act, 1961; Applicability of Section 151 of the Act; Invocation of extraordinary jurisdiction under Article 226 despite pending appeal and review proceedings.

Analysis:
The petitioner filed a petition under Article 226 challenging various notices and orders issued under the Income Tax Act, 1961, seeking relief through a writ of certiorari. The petitioner argued that the impugned actions were not valid due to non-compliance with Section 151 of the Act, citing relevant court decisions. The petitioner had also initiated appeal and review proceedings against the assessment order. The respondent contended that the petitioner had already availed of an alternate remedy by filing appeals and should not invoke the court's extraordinary jurisdiction. The court acknowledged the petitioner's pending appeal and review but emphasized that the appellate and revisionary authorities must consider the legal positions established by court decisions.

The court found merit in the respondent's argument that the appellate and revisionary authorities should address the petitioner's contentions regarding the legality of the impugned actions in light of the court decisions. It was deemed appropriate for the petitioner to pursue the pending proceedings before the authorities rather than seeking relief through a writ petition. The court highlighted that entertaining such petitions would burden the court unnecessarily when statutory remedies were available. The court directed the petitioner to continue with the proceedings before the Appellate Authority and Revisionary Authority, allowing contentions on the legality of the notices under Section 148 based on court decisions.

In conclusion, the court declined to entertain the petition challenging the assessment order while the appeal and revision proceedings were ongoing. However, the court acknowledged the petitioner's argument that if the impugned actions were prima facie illegal, they should not be enforced until the appellate and revisionary proceedings were concluded. The court ordered a stay on the assessment order until the resolution of the pending proceedings, keeping all contentions raised by the petitioner open for consideration by the authorities. The petition was disposed of with no costs awarded.