2024 (11) TMI 1105 - HC - Income Tax

Reopening of assessment u/s 147 - deemed show cause notice under section 148A(b) - 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 - 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 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. 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 by Mr. Mohanty to entertain writ petitions in such circumstances, 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 the pending proceedings as filed before the appropriate Appellate Authority. Accordingly, we are not persuaded to entertain the present proceedings which assail the assessment order when appeal is already filed by the petitioner, which is pending.

Summary

Issues:
1. Petition seeking writs of Certiorari, Mandamus, and Prohibition under Article 226 of the Constitution of India.
2. Applicability of Section 151 of the Income Tax Act.
3. Invocation of extraordinary jurisdiction of the High Court under Article 226.
4. Availability of alternative statutory remedy.
5. Validity of notice issued to a non-existing entity.
6. Jurisdiction of the Appellate and Revisionary Authorities.
7. Legality of impugned assessment order and notice under Section 148.

Analysis:

The petitioner filed a petition under Article 226 seeking various reliefs, including writs of Certiorari, Mandamus, and Prohibition. The petitioner challenged the legality of the notice dated 19.04.2021, order dated 30.07.2022, and subsequent notices issued under the Income Tax Act. The petitioner argued that the impugned order and notices were contrary to Section 151 of the Act, citing precedents like Hexaware Technologies Limited and Siemens Financial Services Pvt. Ltd. The petitioner had also filed an appeal and a Review Application, but proceeded with the petition due to the decisions of the High Court. The respondent contended that the petitioner should pursue the statutory remedy already availed, rather than invoking the High Court's jurisdiction under Article 226.

The High Court acknowledged the petitioner's reliance on the decisions in Hexaware and Siemens but emphasized that the Appellate and Revisionary Authorities should consider the legal position established by those judgments. The Court noted that the petitioner had alternative remedies available and should raise contentions before the statutory authorities. It was deemed inappropriate to entertain the petition challenging the assessment order while the appeal was pending. However, the Court agreed that if the impugned order and notice were prima facie illegal, they should not take effect until the appellate and revisionary proceedings concluded.

Ultimately, the Court directed the petitioner to pursue proceedings before the CIT(A) and the Revisionary Authority, allowing contentions on the notice's illegality under Section 148 in light of the High Court decisions. The impugned assessment order was stayed until the conclusion of the appellate and revisionary proceedings, with all petitioner's contentions expressly kept open. The petition was disposed of with no costs incurred.