2021 (2) TMI 491 - HC - Income Tax

Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax - a preliminary objection raised that there was no undisclosed foreign income and asset, and which objection has been dismissed by the respondent - It is contended that the said dismissal is contrary to the preponderance of probabilities and the petitioner is thus entitled to maintain the petition - HELD THAT - As remedy against the order of assessment and whether in the said remedy, it will be open to the petitioner to also assail the finding with respect to the existence of the jurisdictional fact. Though we are of the prima facie opinion that a better course, in view of the line of judgments falling from D.P. Maheshwari Vs. Delhi Administration 1983 (9) TMI 317 - SUPREME COURT would be to not entertain this writ petition at this stage and to allow the petitioner to avail of the appellate remedy and if the same is draconian, to at that stage interfere with the condition for maintaining an appeal, if found to be too harsh, but it is deemed appropriate to consider. Issue notice. Notice is accepted by the counsel for the respondent.

Summary

Issues:
1. Jurisdictional fact of undisclosed foreign income and asset under the Black Money Act.
2. Remedies available against the order of assessment.
3. Entertaining writ petitions challenging jurisdictional facts at an early stage.

Analysis:
1. The judgment revolves around the jurisdictional fact of undisclosed foreign income and asset under the Black Money Act. The petitioner contended that the assessment cannot proceed without the existence of this fact. The respondent had dismissed the petitioner's objection regarding the absence of undisclosed foreign income and asset, leading to the current petition. The court noted the importance of this jurisdictional fact and the petitioner's entitlement to challenge the dismissal, indicating a significant legal issue at hand.

2. The judgment delves into the remedies available against the order of assessment. The senior counsel for the petitioner highlighted that an appellate remedy exists, allowing the petitioner to challenge the finding of the jurisdictional fact during the appeal process. However, concerns were raised regarding the conditions, such as the deposit of tax, associated with this remedy. The court considered the petitioner's argument that writ petitions challenging jurisdictional facts have been entertained in the past, showcasing a nuanced discussion on the available legal avenues for the petitioner.

3. The court discussed the possibility of entertaining writ petitions challenging jurisdictional facts at an early stage. While acknowledging the precedent suggesting a preference for allowing the appellate remedy first, the court deemed it appropriate to consider the current petition. The decision to issue notice and accept the counter affidavit within a specified timeline reflects the court's procedural approach to the case. The judgment also highlights the importance of allowing assessment proceedings to continue, subject to further orders, indicating a balanced approach to addressing the legal issues raised.

In summary, the judgment addresses crucial legal issues related to the jurisdictional fact of undisclosed foreign income and asset under the Black Money Act, the available remedies against assessment orders, and the decision-making process concerning entertaining writ petitions challenging jurisdictional facts. The detailed analysis showcases a balanced consideration of the petitioner's arguments and the procedural steps taken by the court to address the complex legal issues involved in the case.