A division bench of the Madhya Pradesh High Court comprising of Justice S. A. Dharmadhikari and Justice Prakash Chandra Gupta was dealing with the question that under what circumstances, a challenge can be entertained to an order passed u/s 148A(d) of the Income Tax Act, as it stood amended.
After analyzing several landmark judgments, the court decided that the courts can entertain writ petitions even when there is an alternate remedy. Further, issues of jurisdiction go to the root of the matter and consequently, the matter may require deeper and in-depth consideration.
Brief Facts:
In this batch of petitions, under Article 226 of the Constitution of India, the petitioners had assailed the impugned order passed u/s 148A(d) of the Income Tax Act (hereinafter referred to as 'the Act') as also the notice issued u/s 148 of the said Act for initiating re-assessment proceedings u/s 147 of the Act for the Assessment Year 2013-14. The learned counsel for Revenue had raised a preliminary objection with regard to maintainability of the writ petition in view of the alternative remedy available u/s 246 of the Income Tax Act of filing an appeal. The objections were raised in all the writ petitions mentioned hereinabove.
Issue before the Court:
Under what circumstances, a challenge can be entertained to an order passed u/s 148A(d) of the Income Tax Act, as it stood amended?
Contentions of the Respondent:
The learned counsel for the Revenue, relying on the judgment of Apex Court in the case of Union of India Vs. Ashish Agrawal 2022 SCC Online SC 543, contended that new law relating to assessment shall operate and that all defence u/s 149 of the new law shall be available to the assessee. Therefore, the writ petitions are not maintainable and liable to be dismissed.
Observations of the Court:
The bench cited an Allahabad High Court case titled Rajeev Bansal Vs. Union of India & Others Writ Tax No. 1086/2022 and a Gujarat High Court titled Keenara Industries Pvt. Ltd Vs. Income Tax Officer R/Special Civil Application No. 17321/2022, wherein the courts entertained the writ petitions where alternative remedy was available. Further, it was observed that the Calcutta High Court in the case of Aashiyana Housing Ltd. Vs. Union of India Case No. APOT 185/2022 held that the alternative remedy will not operate as an absolute bar for entertaining the writ petition as jurisdictional issue goes to the root of the matter. Therefore, the court was of the view that appellant had made out a case for entertaining this appeal and had also stayed in the further re-assessment proceedings.
Lastly, reliance was placed on the Apex Court in the case of Red Chilli International Sales Vs. Income Tax Officer & Anr reported 2023 Livelaw (SC) 16, wherein the court held that the provisions of reopening under the act of 1961 have undergone an amendment by the Finance Act, 2021 and consequently, the matter would require deeper and in-depth consideration.
Decision of the Court:
The batch of writ petitioners was admitted for the final hearing. Meanwhile, the interim stay was directed of the order passed u/s 148 of the Income Tax Act, until further orders.
Case Title: M/S Space Enclave Private Limited Versus Income Tax Department
Coram: Justice S. A. Dharmadhikari and Justice Prakash Chandra Gupta
Case No.: WP No. 19516 of 2022
Advocate for the Petitioner: Yatish Kumar Laad, P. M. Choudhary, Anand Prabhawalkar, Madhav Khandelwal, V.N. Dubey, Ibrahim Kannodwala, Nisha Lahoti, Sujeet Deshmukh
Advocate for the Respondent: Veena Mandlik
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