Writ jurisdiction should not substitute findings of an AO with its own: HC

Debraj Dealers Private Limited Vs Union of India And Ors (Calcutta High Court)

HC held that Writ Court should not in exercise of its writ jurisdiction should substitute the findings of an assessing officer in his order with its own. In addition, I am of the considered view that the order under Section 148A(d) of the Income Tax Act, 1961 in itself is not a final assessment order or demand and petitioner will still have scope of making out a case on merit for dropping the reassessment proceeding after issuance of notice under Section 148 of the Act subsequent to the order under Section 148A(d) of the Income Tax Act. In each and every order except in exceptional circumstances if writ Court starts interfering with order under Section 148A(d) and subsequent notice under Section 148 of the Income Tax Act, 1961, the very purpose and object of legislation relating to proceedings subsequent to the order under Section 148A(d) of the Act will beco-me otiose.

FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT

The Court: Heard learned advocates appearing for the parties.

By this writ petition, petitioner has challenged the impugned order dated 29^th July, 2022, relating to assessment year 2017-18 being not satisfied with the reasons given by the respondent assessing officer on the objection/reply filed by it in response to the notice issued under Section 148A(b) of the Act. The respondent assessing officer has not accepted the explanation given by the assessee petitioner relating to alleged escapement of income in the form of transaction of sale of shares to the tune of Rs. 50 lakhs received by the petitioner from one M/s. Runicha Merchants Gems Pvt. Ltd. through non-banking channels and the assessing officer has held in the impugned order that the assessee petitioner has received accommodation entry of Rs. 50 lakhs in the banking account as manifested in certain forms of assets in the account and the assessing officer has come to the finding that the said account as undisclosed escaped income chargeable to tax. This is not a case which falls under those categories of cases where the allegation of any violation of principles of natural justice is involved or that the impugned order has been passed by an authority having inherent lack of jurisdiction or that there is a specific allegation of contravention of any specific provision of the Income Tax Act or there is any procedural irregularity in course of impugned proceedings.

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