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2025 (5) TMI 1427 - HC - Income TaxReopening of assessment u/s 147 - issuance of the notice u/s 148 by the JAO having regard to the provision contained in Section 151A of the said Act - HELD THAT - Petitioner cannot be permitted to challenge the said notice issued under Section 148 of the said Act by way of filing of writ petition after the assessment order has been passed. Petitioner not being afforded with appropriate opportunity to respond and there being infraction in complying with the SOP - Admittedly in this case when the notice was issued the limitation period was fast approaching having regard thereto to a limited period was afforded to the petitioner for responding to the said show cause notice. The same cannot be said to be de hors the provisions of the SOP. This apart the petitioner had duly responded to the said show cause notice within the time specified and did not raise any objection as regards non-compliance of SOP. The aforesaid contention made by the petitioner is an afterthought and cannot be accepted by this Court. Non-supply of essential documents - The petitioner has acknowledged to have received the copy of the excel sheet though the petitioner claims that some other documents were necessary for it to give appropriate response. WP dismissed. This Court is loath to accept the writ petition and is refusing to entertain the petition on the ground of alternative remedy the petitioner should be afforded with some more time to approach the appellate authority - As in the event the petitioner approaches the appellate authority within four weeks from the date the appellate authority having regard to the observation made herein and taking note of the fact that the writ petition was pending before this Court for some time shall hear out and dispose of the appeal on merits by deciding all points raised by the petitioner as expeditiously as possible.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Court in this matter are:
2. ISSUE-WISE DETAILED ANALYSIS Validity of the Notice under Section 148 vis-`a-vis Section 151A and the Notified Scheme The petitioner challenged the notice issued under Section 148 of the Act on the ground that it was issued in contravention of Section 151A and the scheme notified by the Central Government on 22nd November, 2022. The petitioner contended that the notice was bad in law as it did not comply with the procedural safeguards mandated by the said provisions. The Court noted that the petitioner did not raise any contemporaneous objection to the issuance of the Section 148 notice at the time it was received. Instead, the petitioner participated in the assessment proceedings initiated pursuant to the notice and only challenged the notice after the assessment order under Section 147 was passed. The Court observed that no explanation was provided for the delay in challenging the notice at an earlier stage. Consequently, the Court held that the petitioner cannot be permitted to challenge the validity of the Section 148 notice by way of a writ petition filed after the assessment order has been passed. This reasoning is consistent with the principle that procedural objections to notices should be raised promptly to prevent abuse of process and undue delay. Compliance with the Standard Operating Procedure (SOP) under Section 144B The petitioner argued that the show-cause notice dated 18th March, 2025 was issued without adhering to the SOP for faceless assessment under Section 144B of the Act, as circulated by the Central Board of Direct Taxes on 3rd August, 2022. Specifically, the petitioner contended that the notice was issued without providing the standard seven days' response time. Upon examination, the Court referred to clauses N.1.3.1 and N.1.3.2 of the SOP, which provide that although the ordinary response time is seven days, the SOP allows for curtailment of this period in view of the approaching limitation period for completion of assessment. The Court found that in the instant case, the limitation period was indeed fast approaching when the notice was issued, justifying the shorter response time. Moreover, the petitioner had responded within the time allowed and did not raise any objection regarding the response period during the proceedings. The Court treated the contention of non-compliance with the SOP as an afterthought and rejected it. Opportunity to Respond and Supply of Relevant Documents The petitioner claimed that all relevant documents necessary to respond effectively were not supplied by the department despite requests. The petitioner acknowledged receipt of an excel sheet but contended that other essential documents were withheld. The Court noted that most of these allegations pertained to the merits of the case rather than jurisdictional or procedural infirmities. The Court emphasized that an order passed under Section 147 is ordinarily appealable and cannot be challenged by a writ petition unless there is a positive case of violation of principles of natural justice, jurisdictional error, or statutory infraction. Since the petitioner did not establish any such exceptional circumstance, the Court held that the writ jurisdiction was not invokable, and the petitioner should seek remedy through the appellate process. Maintainability of Writ Petition against Assessment Order under Section 147 The Court reiterated the settled legal position that writ petitions under Article 226 challenging assessment orders are generally not maintainable when an efficacious alternative remedy such as appeal exists. The Court found no special or exceptional circumstances warranting invocation of writ jurisdiction in this case. Accordingly, the Court declined to entertain the writ petition and directed the petitioner to approach the appellate authority for redressal of grievances. Grant of Time to Approach Appellate Authority Subsequent to dismissal of the writ petition, the petitioner sought additional time to file an appeal before the appellate authority. Considering the submissions and the fact that the writ petition was pending for some time, the Court granted four weeks' time for the petitioner to approach the appellate authority. The Court further directed the appellate authority to hear and dispose of the appeal expeditiously, taking into account the observations made in the judgment and deciding all points raised by the petitioner on merits. 3. SIGNIFICANT HOLDINGS The Court held:
Core principles established include the necessity of timely challenge to notices under Section 148, the discretionary power within the SOP to shorten response times due to limitation constraints, and the preference for appellate remedies over writ petitions in tax assessment matters absent exceptional circumstances. The final determination was that the writ petition was not maintainable and was dismissed, with liberty granted to the petitioner to pursue appeal within a stipulated timeframe, and the appellate authority directed to expeditiously adjudicate the matter on merits.
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