The Division Bench of the Delhi High Court in the case of Sunil Jain vs Income Tax Department Through National Faceless Assessment Centre, Delhi &Anr.consisting of Justices Manmohanand Manmeet Pritam Singh Aroranoted that as Income Act, 1961 (“the Act”) provides complete machinery for assessment/reassessment of tax, assessee cannot abandon that machinery and invoke jurisdiction of High Court under Article 226 unless it fell under the exceptional grounds on which a writ petition is maintainable at the interim stage in tax matters.
Facts
Petitioner filed hisreturn of income for the Assessment Year 2017-2018 showing a returned income of Rs.28,42,430/-. His case wasselected under limited scrutiny (computer aided scrutiny selection) by therespondent department and accordingly a notice was issued u/s 143(2) of the Act by the Assessing Officer against him raising queries regarding cash deposit made by him during the demonetisation period.An assessment order was passed by theAssessing Officer u/s 143(3) of the Act for the concernedassessment year 2017-18 at an income of Rs.57,17,430/- making an additionof Rs. 28,75,000/- to the returned income of the Petitioner u/s 69A of the Act on the ground that he was not able tosatisfactorily explain the source of the fund for that cash deposit.
Procedural History
Being aggrieved, the Petitioner preferred an Appeal which is currently pending adjudication before the CIT (A). Meanwhile, the respondent issued the impugned reassessment notice u/s 148 of the Act seeking to reassess the income of the petitioner. Aggrieved,he filed a writ petition challenging the notice before this Court but failed to get it listed immediately. The petitioner subsequently another writ petition impugning the assessment order.
Contentions Made
Petitioner: The original assessment was validly framed after true and full disclosure by the Petitioner. Therefore, the issuance of the impugned notice by the Respondents during the pendency of the appeal before the CIT(A) was impermissible as it amounted to a mere change of opinion. The impugned notice was null and void as it was an encroachment on the exclusive jurisdiction of the Commissioner (Appeals) u/s 251 of the Act.
Observations of the Court
The Bench noted that in the present cases, the proceeding u/s 148 of the Act had been initiated on the basis of cash-deposits of Rs.12,50,000/- whereas in the assessment under Section 143(3) of the Act, the addition of Rs.28,75,000/- was made on the basis of cash deposit of Rs.34,54,500/-. Consequently, the transaction under consideration before the Appellate Authority u/s 251 of the Act is a different transaction than the one under consideration in the reassessment proceedings.
It further opined that just because the Appellate Authority has the power to modify an assessment order regarding a source of income that has not been considered during assessment proceedings, it does not mean that the jurisdiction of the authoritiesu/s 148 of the act would be excluded when the issue involved in the proceeding u/s 148 of the Act and 251 of the Act are different.
Relying on CIT& Ors. v. Chhabil Das Agarwal, it was further noted that as theAct 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, unless the case fell under the exceptional grounds on which a writ petition is maintainable at the interim stage in tax matters.
Judgment
The Bench concluded that considering that the assessment order u/s 147 of the Act had already been passed in the present cases, the contentions and submissions advanced by the petitioner must be agitated before the appropriate authority. So, the present writ petitions were dismissed with liberty to the Petitioner to raise all its contentions and submissions before the Appellate Authority.
Case:Sunil Jainvs Income Tax Department Through National Faceless Assessment Centre, Delhi &Anr.
Citation: W.P.(C) 6036/2022 & CM APPLs.18121-18122/2022
Bench: Justice Manmohan, Justice Manmeet Pritam Singh Arora
Decided on: 22ndJuly 2022
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