2024 (11) TMI 1267 - HC - Income Tax

Invoking extraordinary jurisdiction of the High Court during pending appeal and review proceedings - Validity of reopening of assessment - illegality of the notice issued to the petitioner u/s 148 - petitioner as fairly submitted that the petitioner has come before the Court after the petitioner had already filed an appeal against the impugned assessment order, as also the petitioner has filed a Review Application before the Principal Chief Commissioner u/s 264 and both the proceedings are pending - revenue would submit that much prior to the decisions of this Court in Hexaware 2024 (5) TMI 302 - BOMBAY HIGH COURT as also in Siemens 2023 (9) TMI 552 - BOMBAY HIGH COURT the petitioner in the present case has availed of an alternate remedy HELD THAT - We find much substance in the contention as urged by Mr. Sharma on behalf of the revenue. Once the petitioner has availed of an alternate remedy as provided under the 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 (supra), 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. We are of the opinion that 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. Accordingly, we are not persuaded to entertain the present proceedings which assail the assessment order dated 15 March 2024 when appeal is already filed by the petitioner as also the revision proceedings are pending. Order - The petitioner shall pursue the proceedings before the CIT(A) against the impugned assessment order as also the proceedings before the Revisionary Authority. It is open to the petitioner to raise contentions in regard to the illegality of the notice issued to the petitioner under Section 148, in the light of the decisions of this Court in Hexaware and Siemens (supra). Till the proceeding before the Appellate Authority or Revisionary Authority are decided, the impugned assessment order shall remain stayed.

Summary

Issues:
Petition under Article 226 seeking various reliefs including quashing of notices and assessment orders under the Income Tax Act. Whether the petitioner can invoke the extraordinary jurisdiction of the High Court despite pending appeal and review proceedings.

Analysis:
The petitioner sought relief under Article 226 to quash notices and assessment orders under the Income Tax Act, citing non-grant of sanction by the appropriate authority as specified under Section 151 of the Act. The petitioner had already filed an appeal and a Review Application, both pending, before approaching the High Court. The petitioner argued that despite the pending appeal and review, the petition was filed due to the decisions of the High Court in similar cases. However, the revenue contended that the petitioner had already availed of an alternate remedy and should not invoke the High Court's jurisdiction solely based on previous court decisions.

The Court acknowledged the petitioner's pending appeal and review but emphasized that the Appellate Authority and Revisionary Authority must consider the legal position established by the High Court's decisions. The Court held that the petitioner should pursue the pending proceedings before the Appellate and Revisionary Authorities, as they are bound to consider the legal interpretations provided by the High Court. The Court cautioned against entertaining writ petitions that could be adjudicated by the Appellate Authority, as it would burden the High Court unnecessarily.

Ultimately, the Court decided not to entertain the petition challenging the assessment order, considering the pending appeal and review. However, the Court agreed that if the assessment order and notices were prima facie illegal based on the High Court's decisions, they should not be given effect until the appellate and revisionary proceedings are concluded. The Court ordered the petitioner to continue with the proceedings before the Appellate and Revisionary Authorities, allowing contentions regarding the legality of the notices issued under Section 148 in light of previous court decisions. The Court stayed the assessment order until the conclusion of the pending proceedings, keeping all contentions of the petitioner open for consideration.

In conclusion, the Court disposed of the petition with the directive for the petitioner to pursue the ongoing proceedings, ensuring that the assessment order remains stayed until the Appellate and Revisionary Authorities make their decisions.