Assessee challenged a Section 148A(d) order and Section 148 notice for AY 2018-19, contending its objections were not considered. Relying on prior precedents, the High Court held writ interference is premature before assessment concludes and dismissed the petition without expressing any opinion on merits.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
CWP No.10073 of 2022
1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
CWP No.10073 of 2022 Date of Decision : 02.06.2022
Red Chilli International Sales
….Petitioner
Versus
Income Tax Officer and another …..Respondents
CORAM : HON’BLE MR. JUSTICE TEJINDER SINGH DHINDSA HON’BLE MR. JUSTICE PANKAJ JAIN
Present : Mr. Nikhil Goyal, Advocate for the petitioner.
Ms. Urvashi Dhugga, Senior Standing Counsel for the respondents.
PANKAJ JAIN, J
By way of present writ petition the petitioner seeks issuance of writ in the nature of Certiorari for quashing order dated 12.04.2022 (Annexure P-3) passed under Section 148A(d) of the Income Tax Act, 1961 (for short 'the Act') and notice issued under Section 148 dated 12.04.2022 (Annexure P-4) for the assessment year 2018-2019.
Petitioner a partnership firm is an Assessee under the Act. The petitioner received notice under Section 148A(b) dated 14.03.2022 (Annexure P-1). The details of the information on the basis of which notice under Section 148A(b) has been issued were supplied to the petitioner as well. The petitioner responded thereto vide communication dated 21.03.2022 and raised objections. The said objections were decided vide order dated 12.04.2022 passed under Section 148A(d) of the Act. Along POOJA SHARMA with the order the petitioner was also served with notice under Section 148 2022.06.03 01:21 I attest to the accuracy and integrity of this document
CWP No.10073 of 2022
2
of the Act. The challenge in the present writ petition has been laid to the order passed under Section 148 A(d) dated 12.04.2022 along with notice issued under Section 148 of the Act of the even date contending that the response filed by the petitioner to the notice under Section 148A(b) has not been considered.
We have heard learned counsel for the parties and have carefully gone through the records of the case.
The primary issue that would arises in the present writ petition
is :-
“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 of the Act ?”
The debate is not new. While dealing with the similar situation under the old Act i.e. Indian Income Tax Act, 1922, Division Bench of this
Court in ' Lachhman Das Nayar and others vs. Hans Raj Puri, Income-
Tax Officer, Amritsar and others, 1953 AIR (P&H) 55 , held that -
“ An examination of the scheme of the Act and the words used in section 34 of the Act and the various cases that I have referred to above show that the legislature has entrusted the determination of facts and of law to the Income-tax Officers. A particular machinery has been set up under the Act “by the use of which alone” total assessable income for the purposes of the Income-tax is to be ascertained and jurisdiction to question the assessment otherwise than by the use of this machinery is incompatible with the scheme of the Act. The challenge of the action of the Income-Tax Officer by a writ
POOJA SHARMA 2022.06.03 01:21 I attest to the accuracy and integrity of this document
CWP No.10073 of 2022
3
prohibition or mandamus is , therefore, not available to the assessee.”
In ' Rasulji Buxji Kathawala vs. Income Tax Commissioner,
Delhi and another' (Civil Writ No.44 of 1955, D/d. 2.4.1956) while dealing with the similar situation under the 1922 Act, Division Bench of Rajasthan High Court held that -
“But where as in this case no part of the Act is being attacked, there is, in our opinion, no justification for us to intervene at this stage when other remedies which arc not necessarily onerous are still open to the applicant under the Act. We, therefore, refuse to intervene at this stage in this case, and leave it to the applicant to pursue his remedies under the Income-tax Act so far as the question of his chargeability to income-tax under the Act, or other matters are concerned.”
Division Bench of this Court in the case of 'Sumit Passi vs.
Assistant Commissioner of Income-Tax', (2016) 386 ITR , held that -
POOJA SHARMA 2022.06.03 01:21 I attest to the accuracy and integrity of this document
CWP No.10073 of 2022
4
Delhi High Court in W.P.(C) 5787/2022 titled as Gulmuhar
Silk Pvt. Ltd. vs. Income Tax Officer Ward 10(3) Delhi, while considering the same question held that:
“6. Though it is the petitioner's case that the impugned order is erroneous on facts, yet this Court is of the opinion that the petitioner would have ample opportunity during the course of proceedings before different statutory forums to show that the finding of fact arrived at was erroneous. Moreover, at this stage, no assessment order has been passed and it has only been observed that it is a fit case for issuance of notice under Section 148 of the Act. In fact, the Supreme Court in Commissioner of Income Tax and Ors. Vs. Chhabil Das Agarwal, (2014) 1 SCC 603 has held that as the Income Tax Act, 1961 provides complete machinery for assessment/ reassessment of tax, assessee is not permitted to abandon that machinery and invoke jurisdiction of High Court under Article 226.”
Supreme Court in the case of ' Raymond Woollen Mills
Limited vs. Income Tax Officer, Centre XI, Range Bombay and others'
(Civil Appeals No.1972 of 1992 with No.1973 of 1992. D/d 17.12.1997) , held that -
“3. In this case, we do not have to give a final decision as to whether there is suppression of material facts by the assessee or not. We have only to see whether there was prima facie some material on the basis of which the Department could
POOJA SHARMA 2022.06.03 01:21 I attest to the accuracy and integrity of this document
CWP No.10073 of 2022
5
reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage. We are of the view that the court cannot strike down the reopening of the case in the facts of this case. It will be open to the assessee to prove that the assumption of facts made in the notice was erroneous. The assessee may also prove that no new facts came to the knowledge of the Income-tax Officer after completion of the assessment proceeding. We are not expressing any opinion on the merits of the case. The questions of fact and law are left open to be investigated and decided by the assessing authority. The appellant will be entitled to take all the points before the assessing authority.”
Thus, 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.
POOJA SHARMA 2022.06.03 01:21 I attest to the accuracy and integrity of this document
CWP No.10073 of 2022
6
Needless to say that nothing herein observed shall be construed
as an opinion on the merits of the case.
(TEJINDER SINGH DHINDSA) (PANKAJ JAIN) JUDGE JUDGE
June 02, 2022 Pooja sharma-I
Whether speaking/reasoned : Yes/No Whether reportable : Yes/No
POOJA SHARMA 2022.06.03 01:21 I attest to the accuracy and integrity of this document
2 issues framed by the court
Whether a writ court should interfere at the notice-under-Section-148 stage before the assessing officer frames the reassessment under Section 147.
Whether the order under Section 148A(d) disregarded the assessee's objections warranting quashing.
Colour shows how this judgement treated each authority
Lachhman Das Nayar and others vs. Hans Raj Puri, Income-Tax Officer, Amritsar and othersRelied on¶24
1953 AIR (P&H) 55 · Who else cites this
Rasulji Buxji Kathawala vs. Income Tax Commissioner, Delhi and anotherRelied on¶31
Civil Writ No.44 of 1955, D/d. 2.4.1956
Sumit Passi vs. Assistant Commissioner of Income-TaxRelied on¶34
(2016) 386 ITR
Gulmuhar Silk Pvt. Ltd. vs. Income Tax Officer Ward 10(3) DelhiRelied on¶40
W.P.(C) 5787/2022
Commissioner of Income Tax and Ors. Vs. Chhabil Das AgarwalRelied on¶40
(2014) 1 SCC 603 · Who else cites this
Raymond Woollen Mills Limited vs. Income Tax Officer, Centre XI, Range Bombay and othersRelied on¶43
Civil Appeals No.1972 of 1992 with No.1973 of 1992. D/d 17.12.1997
4 provisions across 2 enactments
Red Chilli International Sales
Income Tax Officer
Tejinder Singh Dhindsa
Pankaj Jain
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
