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2025 (2) TMI 244 - HC - Income TaxReopening of assessment - notice issued beyond a period of 4 years - Applicability of TOLA provisions - reasons record that deduction u/s 54F must be restricted to the cost of acquisition of petitioner s share in the property and also no rental income has been offered for tax u/s 23 - whether this Court should exercise its extraordinary jurisdiction to examine the validity of reassessment proceedings in the present case? - HELD THAT - The issue of whether on account of TOLA provisions proviso to Section 147 of the Act would be applicable or not was not raised by the petitioner in its objections. This issue has been raised for the first time before this Court. In our view if the objection has not been raised before the assessing officer it would not be fair to raise such an objection in Writ Petition for the first time to challenge the validity of the reassessment proceedings. Petitioner has filed undated letters to show that the issue of Section 54F was examined during the assessment proceedings and therefore there is a change of opinion. In the annexure to the queries raised there is no query concerning Section 54F or taxation of rental income. Whether these undated letters were filed or not during the assessment proceedings in the absence of any document acknowledging the same by the revenue it would not be proper for us to enter the arena of investigating this issue as to whether these documents were filed or not. This would involve an investigation into the facts that this Court under Article 226 of the Constitution of India cannot examine. However the petitioner is free to demonstrate the same in appeal. Issue of rental income under the house property is concerned no query is raised and even in the undated letters there is no reply on this issue. Therefore we cannot accept the petitioner s contention that this issue was examined during the assessment proceedings. Learned counsel for the petitioner was fair in stating that certainly this was not examined. Petitioner also submitted that the impugned proceedings were initiated at the behest of the audit party and therefore the proceedings are bad in law. In our view it is a settled position that if the audit objection is on facts then the revenue would have no jurisdiction to reopen the case on audit. However if the issue raised is a question of law then certainly reopening can be done. The issue in the present case whether it is a question of fact or a question of law will have to be examined in the light of the submissions made during the course of the assessment proceedings which would again involve the determination of questions of fact which this Court cannot go into in writ proceedings. In any view the reasons recorded do not mention the reopening being done based on audit objections. Therefore we have our own doubts about whether the petitioner can raise this issue. Also we cannot comprehend how internal audit objection documents were shared with the petitioner. On perusal of the letter filed on 17 August 2018 in response to the audit party s query we find various documents annexed to this letter. Prima facie we do not find a reference to these documents in undated letters which the petitioner claims to have filed in assessment proceedings. Petitioner has participated in the reassessment proceedings despite the officer not disposing of the objection observed in the assessment order. The petitioner vide letter dated 28 March 2022 has made his detailed submissions on the merits of the case without raising any objection on the insufficiency of time between the order rejecting objection and the time given for reply. On 17 January 2022 the petitioner has filed detailed submissions on the merits again without objecting the respondents not having passed any order disposing of the objections. Therefore in our view the petitioner cannot now raise this contention before the Writ Court. However the petitioner is free to raise this issue before the Appellate Authority. We refrain from exercising our jurisdiction under Article 226 of the Constitution of India. However if the petitioner files an appeal against the assessment order dated 29 March 2022 within four weeks from the date of uploading of the present order then the Appellate Authority will adjudicate the appeal Ad-interim relief extended for four weeks from the date of uploading the present order to enable the petitioner to make an appropriate application before the appropriate Authority for seeking a stay of the demand.
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