2024 (10) TMI 1583 - HC - Income Tax

Validity of reassessment proceedings - applicability of Section 151 of the provisions of the Act as the sanction has not been granted by the appropriate authority as specified under the said provisions - Legality of jurisdiction and assessment orders and notices issued under the Income Tax Act - 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 under Section 148A and under Section 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. 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 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 assessee pursues such pending proceedings as already filed before the appropriate Appellate Authority or 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. We find substance in Petitioner s contention that if prima facie the petitioner is correct that the impugned assessment order as also the notice issued u/s 148 if it is illegal and contrary to the law laid down by this Court in Hexaware and Siemens (supra), the same ought not to be given effect, till the appellate proceedings and revisionary proceedings are decided.

Summary

Issues:
Petition under Article 226 seeking various reliefs including challenging the jurisdiction and legality of assessment orders and notices issued under the Income Tax Act.

Analysis:
The petitioner sought relief under Article 226 challenging the jurisdiction and legality of assessment orders and notices issued under the Income Tax Act. The petitioner argued that the impugned assessment order and notice were not sanctioned by the appropriate authority as required by Section 151 of the Act. The petitioner had already filed an appeal and a Review Application, which were pending. The petitioner acknowledged the jurisdictional High Court's decisions in similar cases but proceeded with the petition due to the pending appeal and revision. The Revenue contended that the statutory remedy had been availed by the petitioner, and the appellate and revisional authorities should consider the court's decisions. The Court agreed with the Revenue, emphasizing that the appellate and revisionary authorities must consider the legal position established by the High Court's decisions. The Court held that the petitioner should pursue the pending proceedings before the appellate and revisionary authorities, as they are best suited to adjudicate on the issues raised. The Court refused to entertain the petition challenging the assessment order while the appeal and revision were pending, as it could create unnecessary duplication of proceedings. However, the Court acknowledged the petitioner's concerns and ordered that the assessment order would remain stayed until the appellate and revisionary proceedings were concluded. The petitioner was allowed to raise contentions regarding the illegality of the notice issued under Section 148 based on the High Court's decisions in similar cases. All contentions of the petitioner in the pending proceedings were expressly kept open, and the petition was disposed of with no costs.