2022 (6) TMI 246 - HC - Income Tax

Reopening of assessment - notice under Section 148A(b) - contention raised by petitioner is that there is no escapement of income which can form basis for proceeding against the petitioner also non considering objections submitted by the petitioner in response to notice under Section 148A(b) - HELD THAT - As the consistent view is that where the proceedings have not even been concluded by the statutory authority, the writ Court should not interfere at such a pre-mature stage. Moreover it is not a case where from bare reading of notice it can be axiomatically held that the authority has clutched upon the jurisdiction not vested in it. By now it is well settled that there is vexed distinction between jurisdictional error and error of law/fact within jurisdiction. For rectification of errors statutory remedy has been provided. In the light of aforesaid settled proposition of law, we find that there is no reason to warrant interference by this Court in exercise of the jurisdiction under Article 226/227 of the Constitution of India at this intermediate stage when the proceedings initiated are yet to be concluded by a statutory authority. Hence, the instant writ petition stands dismissed.

Summary

Issues:
Challenge to notice under Section 148A(b) and Section 148 of the Income Tax Act, 1961 for Assessment Year 2018-2019.

Analysis:

Issue 1: Notice under Section 148A(b) and Section 148
The petitioner, a Private Limited Company, challenged the notice issued under Section 148A(b) and Section 148 of the Income Tax Act for the Assessment Year 2018-2019. The petitioner contended that there was no escapement of income warranting the proceedings against them. The petitioner raised objections which were decided mechanically, leading to a claim of miscarriage of justice. The primary issue was whether the Court should intervene at this stage when the Assessing Officer is yet to complete the assessment/reassessment under Section 147 of the Act.

Issue 2: Jurisdiction to Interfere at Premature Stage
The Court examined the provisions of Sections 147, 148, and 148A of the Act post-Amending Act, 2021. It noted that the Assessing Officer is required to assess or reassess the income after the assessee files a return following a notice under Section 148. The Court referred to past judgments emphasizing that the writ Court should not intervene prematurely in the assessment process. The Court highlighted the distinction between jurisdictional error and errors of law/fact within jurisdiction, indicating that statutory remedies exist for rectification of such errors.

Issue 3: Precedents and Legal Standpoint
The Court cited various precedents to support its decision not to interfere at an intermediate stage of the assessment process. It referenced cases where the Courts refused to intervene when other remedies under the Act were available to the assessee. The judgments emphasized that the Income Tax Act provides a complete machinery for assessment/reassessment, and the assessee should exhaust these remedies before seeking relief under Article 226 of the Constitution.

Conclusion
Based on the settled legal principles and precedents, the Court dismissed the writ petition, stating that interference at this premature stage was unwarranted. The Court clarified that its decision should not be construed as an opinion on the merits of the case, as the proceedings were yet to be concluded by the statutory authority. The judgment reiterated the importance of allowing the statutory authority to complete the assessment process before seeking judicial intervention.