2023 (9) TMI 553 - HC - Income Tax

Reopening of assessment u/s 147 - notice time barred - availability of alternative efficacious remedy - as submitted the impugned notice under Section 148 of the Act is well within the prescribed period of limitation as contemplated under Section 149(1)(b) of the Act, as the impugned notice is required to be issued within six years in the matter of re-assessment as provided for under Section 149 (1)(b) - HELD THAT - The period of six years has expired on 31-03-2019 i.e. the date on which the notice was issued, therefore, it is incorrect to say that the impugned notice is time barred. It is a well settled law that in the wake of availability of alternative efficacious remedy, writ jurisdiction under Article 226 of the Constitution of India may not be exercised. The extraordinary Constitutional Jurisdiction under Article 226 of the Constitution of India Primarily and Initially is an extraordinary jurisdiction and not a regular jurisdiction. It may be exercised sparingly. This Court is of the firm view that if remedy for Statutory Appeal is provided for, the delinquent is expected to avail the same as jurisdiction of the appellate Court neither can be substituted nor eclipsed invoking extraordinary constitutional jurisdiction. We agree with respondent that in view of Section 149(1)(b) of the Act, the impugned notice issued on 31-03-2019 was well within the prescribed period of limitation. Now at this stage, Shri Modi submits that petitioner may be relegated to avail the said remedy with a prayer that period of limitation since has expired, therefore, the appeal may be directed to be heard and decided without insisting on the question of limitation. Consequently, we dispose of this Writ Petition with following directions - (1) that petitioner/ assessee if so advised, may appeal before the CIT Appeals within 30 days from the date of uploading of this order on the website of this Court; (2) the appellate Court without insisting on the question of limitation shall decide the appeal on its merits addressing the question raised on facts and in law as well as application for interim protection if filed. (3) for the period of 30 days, the interim protection granted by this Court on 17-03-2020 shall remain in force.

Summary

Issues involved:
The legality of the notice issued under Section 148 of the Income Tax Act, 1961 for the Assessment year 2012-13 and the subsequent assessment order.

Summary:

Issue 1: Time limitation of the notice and assessment order

The petitioner challenged the notice issued under Section 148 of the Income Tax Act, 1961, claiming it was time-barred as it exceeded the prescribed period of limitation. The petitioner argued that the income for the relevant assessment year had been disclosed in the previous year's tax return, and thus, no income had escaped assessment. The respondents contended that the notice was within the six-year limitation period as per Section 149(1)(b) of the Act.

Issue 2: Availability of alternative remedy

The respondents argued that the petitioner should have availed the statutory appellate remedy under Section 246-A of the Act within 30 days, instead of approaching the High Court under Article 226 of the Constitution of India. The Court noted that writ jurisdiction under Article 226 should be sparingly exercised when alternative efficacious remedies are available.

Judgment:

The Court found merit in the respondent's submissions regarding the time limitation of the notice and assessment order, stating that the notice issued on 31-03-2019 was within the prescribed period. The Court emphasized the importance of availing statutory appellate remedies before resorting to extraordinary constitutional jurisdiction. Consequently, the Court directed the petitioner to appeal before the CIT Appeals within 30 days without insisting on the question of limitation. The interim protection granted earlier was to remain in force during this period. The Court clarified that it had not expressed any opinion on the merits of the case.

Conclusion:

The writ petition was disposed of with directions for the petitioner to pursue the statutory appeal remedy within the specified timeframe, highlighting the importance of exhausting alternative remedies before seeking extraordinary constitutional jurisdiction.