2014 (7) TMI 605 - MADRAS HIGH COURT

Reassessment order u/s 147 r.w section 148 of the Act - Whether an order passed by the AO on the objections of an assessee can be assailed before the Court under Article 226 of the Constitution of India – Held that:- A challenge made to an order passed on the objections of the assessee would in effect is a challenge made to a notice u/s 148 of the Act - Such an order passed by the AO is only at the stage of process of determination and not a determination by itself - revenue cannot have a legal right as there is no legal injury suffered by them at that stage - the jurisdiction vested with High Court under Article 226 of the Constitution of India can be exercised in a given case - the restriction is self-imposed and nothing else - in a case, where no adjudication is required on facts, then certainly jurisdiction of the Court under Article 226 of the Constitution of India can very well be invoked - Therefore, to such a limited extent, we are inclined to hold that the jurisdiction of this Court under Article 226 of the Constitution of India can be exercised.

The decision in Commissioner of Income Tax and others Vs. Chhabil Dass Agarwal [2013 (8) TMI 458 - SUPREME COURT] followed - challenge was made to the correctness or otherwise and the notices u/s 148 of the Act, re-assessment orders passed and the consequential demand notices - neither has the assessee described the available alternate remedy under the Act as ineffectual and non-efficacious while invoking the writ jurisdiction of the High Court nor has the High Court ascribed cogent and satisfactory reasons to have exercised its jurisdiction - the Writ Court ought not to have entertained the Writ Petition filed by the assessee, wherein he has only questioned the correctness or otherwise of the notices issued u/s 148 of the Act, the re-assessment orders passed and the consequential demand notices issued - where an adjudicatory process is involved on merits, then the only remedy open to an assessee is to go through the procedure provided under the enactment.

If an income chargeable to tax has been under assessed or such income has been assessed at too low a rate or such income has been made the subject of excessive relief under this Act or excessive loss or depreciation allowance or any other allowance under this Act has been computed or where a person is found to have any asset (including financial interest in any entity) located outside India, having deemed to be the cases of escaped assessment, it would come under the purview of Section 147 - Thus, the provision would make it clear that the power of the assessing officer is rather wide.

The legislative intent is to allow the AO to go through the process of assessment - Even under Section 147 of the Act, a Court of law cannot presume a lack of jurisdiction, when a fact in issue requires adjudication - It has to be exercised in terms of Sections 139, 143(2) and 143(3) - an order passed on the objections of the assessee over adjudicating facts is not open to challenge by way of filing a writ petition - the order passed on a consideration of the objections raised cannot be termed as the order having civil consequences - The assessing officer is not required to consider the objections in detail - When u/s 147 the AO can even assess any other income chargeable to tax, which has escaped assessment, which comes to his notice subsequently during the course of the proceeding, the power being wide, it cannot be challenged on the ground of improper or inadequate consideration of objections - the order passed on the objections raised by the assessee would not prevent the AO from exercising his power on merits while passing the assessment order – Decided against the assessee.