Krishana Goel v. The Principal Chief Commissioner Of Income Tax, Chandigarh And Another …

IN THE HIGH COURT OF PUNJAB AND HARYANAAT CHANDIGARH Review Application No.94 of 2022 in/and Civil Writ Petition No.8201 of 2022Date of Decision : 31.05.2022 Krishana Goel ….Applicant/Petitioner Versus The Principal Chief Commissioner of Income Tax, Chandigarh and another …..Respondents CORAM : HON’BLE MR. JUSTICE TEJINDER SINGH DHINDSAHON’BLE MR. JUSTICE PANKAJ JAIN Present :Mr. Puneet Kansal, Advocate for the applicant/petitioner. PANKAJ JAIN, J. This is a review application directed against the order dated22[nd] April, 2022 passed in CWP No.8201 of 2022. 2.Ld. Counsel refers to the order dated 22[nd] April, 2022, wherein it has been noticed that :- “The instant petition has been filed assailing the noticedated 05.04.2022 (Annexure P-5) under Section 148 of theIncome Tax Act, 1961.” 3.Ld. Counsel has drawn our attention to the prayer made in thewrit petition wherein the challenge has been laid to the notice under Section148 of the Income Tax Act, 1961 (for short, 'the Act') and also to the orderpassed under Section 148A(d) of the Act. He thus contends that it is anerror apparent on the face of the record which would call for review of theorder dated 22[nd] April, 2022. 4.Though notice (Annexure P-5) is consequential to the orderpassed under Section 148A(d) dated 5[th] April, 2022 (Annexure P-4) underthe scheme of the Act yet by deeming it to be an error apparent on the faceof the record, order dated 22[nd] April, 2022 is recalled. 5.Accordingly, the writ petition is restored to its original numberand stage, and with the consent of Counsel, the same is taken up on Boardtoday itself for consideration. 6.Review Application stands disposed off. Civil Writ Petition No.8201 of 2022 The petitioner has laid challenge to the order dated 5[th] of April,2022 passed under Section 148A(d) of the Income Tax Act (Annexure P-4)and the consequential notice of even date issued under Section 148 of theAct. 2.The contention raised is that order under Section 148A(d) ofthe Act (Annexure P-4) has been passed without considering reply filed bythe petitioner on 28[th] of March, 2022 (Annexure P-2) raising objections tonotice dated 21[st] of March, 2022 issued to the petitioner under Section148A(b) of the Act, for the Assessment Year 2015-16. 3.We have heard Counsel for the petitioner and have carefullygone through the records of the case. 4.The primary issue that arises in the present writ petition is :-“Whether at this stage of notice under Section 148, writ Court should venture into the merits of the controversywhen AO is yet to frame assessment/reassemment indischarge of statutory duty casted upon him under Section147 of the Act ?” 5.The debate is not new. While dealing with the similar situationunder the old Act i.e. Indian Income Tax Act, 1922, Division Bench of this Court in 'Lachhman Das Nayar and others vs. Hans Raj Puri, Income- Tax Officer, Amritsar and others, 1953 AIR (P&H) 55, held that - “An examination of the scheme of the Act and the words usedin section 34 of the Act and the various cases that I havereferred to above show that the legislature has entrusted thedetermination of facts and of law to the Income-tax Officers.A particular machinery has been set up under the Act “by theuse of which alone” total assessable income for the purposesof the Income-tax is to be ascertained and jurisdiction toquestion the assessment otherwise than by the use of thismachinery is incompatible with the scheme of the Act. Thechallenge of the action of the Income-Tax Officer by a writprohibition or mandamus is , therefore, not available to theassessee.” 6.In 'Rasulji Buxji Kathawala vs. Income Tax Commissioner,Delhi and another' (Civil Writ No.44 of 1955, D/d. 2.4.1956)while dealing with the similar situation under the 1922 Act, Division Bench ofRajasthan High Court held that - “But where as in this case no part of the Act is beingattacked, there is, in our opinion, no justification for us to 6.In 'Rasulji Buxji Kathawala vs. Income Tax Commissioner,Delhi and another' (Civil Writ No.44 of 1955, D/d. 2.4.1956)while dealing with the similar situation under the 1922 Act, Division Bench ofRajasthan High Court held that - “But where as in this case no part of the Act is beingattacked, there is, in our opinion, no justification for us to Review Application No.94 of 2022 in/andCivil Writ Petition No.8201 of 2022 intervene at this stage when other remedies which arc notnecessarily onerous are still open to the applicant under theAct. We, therefore, refuse to intervene at this stage in thiscase, and leave it to the applicant to pursue his remediesunder the Income-tax Act so far as the question of his charge-ability to income-tax under the Act, or other matters areconcerned.” 7.Division Bench of this Court in the case of 'Sumit Passi vs.Assistant Commissioner of Income-Tax', (2016) 386 ITR, held that - “29. ....The reasons assigned by the Assessing Officer totentatively believe that taxable income has escaped assessmentcannot be brushed aside at the threshold without a fact-findingprocedure, more-so when the petitioners are not remediless andhave got equally efficacious recourses under the Act. 30. A somewhat similar dictum is discerniblefrom CIT v. ChhabilDass Agarwal (2014) I SCC 603 as it holds that the Act providescomplete machinery for the assessment/reassessment of tax,imposition of penalty and for obtaining relief in respect of anyimproper orders passed by the Revenue Authorities, and theassessee could not be permitted to abandon that machinery and toinvoke the jurisdiction of the High Court under Article 226 of theConstitution when he had adequate remedy open to him by anappeal to the Commissioner ofIncome Tax (Appeals). 31. Having held so, it is not expedientfor this Court to express itsopinion on the rival submissions as it may unwittingly causeprejudice to either party. Suffice it to say that no case to quash thenotice(s) issued under Section 148 read with Section 147 of the Actor the order(s) rejecting the objections, is made out at thispremature stage. ��������������������������������������������������������������������������������� �! �"�# �$%%��!�������&��'��(!���) ����������������������������������������������� “6.Though it is the petitioner's case that the impugnedorder is erroneous on facts, yet this Court is of the opinionthat the petitioner would have ample opportunity during thecourse of proceedings before different statutory forums toshow that the finding of fact arrived at was erroneous.Moreover, at this stage, no assessment order has been passedand it has only been observed that it is a fit case for issuanceof notice under Section 148 of the Act. In fact, the SupremeCourt in Commissioner of Income Tax and Ors. Vs. ChhabilDas Agarwal, (2014) 1 SCC 603 has held that as the IncomeTax Act, 1961 provides complete machinery for assessment/reassessment of tax, assessee is not permitted to abandon thatmachinery and invoke jurisdiction of High Court underArticle 226.” 9.Supreme Court in the case of 'Raymond Woollen MillsLimited vs. Income Tax Officer, Centre XI, Range Bombay and others'(Civil Appeals No.1972 of 1992 with No.1973 of 1992. D/d 17.12.1997),held that - “3. In this case, we do not have to give a final decision as towhether there is suppression of material facts by the assesseeor not. We have only to see whether there was prima faciesome material on the basis of which the Department couldreopen the case. The sufficiency or correctness of thematerial is not a thing to be considered at this stage. We areof the view that the court cannot strike down the reopening of Review Application No.94 of 2022 in/andCivil Writ Petition No.8201 of 2022 9.Supreme Court in the case of 'Raymond Woollen MillsLimited vs. Income Tax Officer, Centre XI, Range Bombay and others'(Civil Appeals No.1972 of 1992 with No.1973 of 1992. D/d 17.12.1997),held that - “3. In this case, we do not have to give a final decision as towhether there is suppression of material facts by the assesseeor not. We have only to see whether there was prima faciesome material on the basis of which the Department couldreopen the case. The sufficiency or correctness of thematerial is not a thing to be considered at this stage. We areof the view that the court cannot strike down the reopening of Review Application No.94 of 2022 in/andCivil Writ Petition No.8201 of 2022 the case in the facts of this case. It will be open to theassessee to prove that the assumption of facts made in thenotice was erroneous. The assessee may also prove that nonew facts came to the knowledge of the Income-tax Officerafter completion of the assessment proceeding. We are notexpressing any opinion on the merits of the case. Thequestions of fact and law are left open to be investigated anddecided by the assessing authority. The appellant will beentitled to take all the points before the assessing authority.” 10.Thus, the consistent view is that where the proceedings havenot even been concluded by the statutory authority, the writ Court shouldnot interfere at such a pre-mature stage. Moreover it is not a case wherefrom bare reading of notice it can be axiomatically held that the authorityhas clutched upon the jurisdiction not vested in it. The correctness of orderunder Section 148A(d) is being challenged on the factual premisecontending that jurisdiction though vested has been wrongly exercised. Bynow it is well settled that there is vexed distinction between jurisdictionalerror and error of law/fact within jurisdiction. For rectification of errorsstatutory remedy has been provided. 11.In the light of aforesaid settled proposition of law, we find thatthere is no reason to warrant interference by this Court in exercise of thejurisdiction under Article 226/227 of the Constitution of India at thisintermediate stage when the proceedings initiated are yet to be concludedby a statutory authority. Thus, the present Writ Petition is dismissed. 12.Needless to say that nothing herein observed shall be construed as an opinion on the merits of the case. (TEJINDER SINGH DHINDSA)JUDGE (PANKAJ JAIN) JUDGE May 31, 2022 DprWhether speaking/reasoned:Yes/NoWhether reportable:Yes/No