2022 (6) TMI 417 - HC - Income Tax

Reopening of assessment u/s 147 - notice under Section 148A(b) - Whether at this stage of notice under Section 148, writ Court should venture into the merits of the controversy when AO is yet to frame assessment/reassemment in discharge of statutory duty casted upon him under Section 147? - HELD THAT - 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. The correctness of order under Section 148A(d) is being challenged on the factual premise contending that jurisdiction though vested has been wrongly exercised. 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 writ petition stands dismissed.

Summary

Issues:
1. Challenge to order under Section 148A(d) of the Income Tax Act, 1961 and notice issued under Section 148 for the assessment year 2018-2019.

Analysis:
The petitioner, a partnership firm, sought the quashing of an order dated 12.04.2022 passed under Section 148A(d) of the Income Tax Act, 1961, and a notice issued under Section 148 for the assessment year 2018-2019. The petitioner had responded to a notice under Section 148A(b) dated 14.03.2022 and raised objections, which were decided through the impugned order under Section 148A(d). The petitioner contended in the writ petition that their response to the initial notice was not considered. The central issue in this case was whether the court should delve into the merits of the controversy at the stage of a notice under Section 148, especially when the assessing officer (AO) is yet to complete the assessment/reassessment under Section 147 of the Act.

The court referred to previous judgments to establish that interfering at a premature stage when statutory proceedings are ongoing is unwarranted. It was highlighted that the distinction between jurisdictional error and errors within jurisdiction is crucial. The court emphasized that statutory remedies are available for rectification of errors, and interference by the court under Article 226/227 of the Constitution of India is not justified when proceedings are yet to be concluded by the statutory authority. The court dismissed the writ petition, clarifying that the decision should not be construed as an opinion on the merits of the case.

In conclusion, the court's decision was based on the principle that intervening in ongoing statutory proceedings prematurely is not appropriate, and statutory remedies should be pursued for rectification of errors. The court emphasized the importance of distinguishing between jurisdictional errors and errors within jurisdiction, highlighting that interference by the court at an intermediate stage is unwarranted. The judgment serves as a reminder that statutory procedures should be followed before seeking judicial intervention.