Kesoram Industries Limited Vs ACIT (Calcutta High Court)
Calcutta High Court has dismissed a writ petition filed by Kesoram Industries Limited challenging a reassessment notice and a subsequent assessment order from the Income Tax Department. The court underscored a crucial legal principle: a challenge to the validity of a notice is not maintainable after the assessee has participated in the ensuing proceedings without contemporaneous objection.
The court refused to exercise its extraordinary writ jurisdiction, directing the company to avail the statutory appellate process, which it deemed an “efficacious alternative remedy.”
The case involved a notice issued to Kesoram Industries on April 12, 2024, under Section 148 of the Income Tax Act, 1961, to reopen the assessment for the financial year 2019-20. Following this, an assessment order under Section 147 was passed on March 28, 2025. The company challenged both the initial notice and the final order in its writ petition.
Kesoram Industries mounted its challenge on several grounds. The primary contention was a jurisdictional error, arguing that the Section 148 notice was issued by the jurisdictional assessing officer and not through the faceless assessment mechanism mandated under Section 151A of the Act. The petitioner also alleged violations of the principles of natural justice, claiming that a show-cause notice issued on March 18, 2025, provided insufficient response time, contrary to the Standard Operating Procedure (SOP) circulated by the tax board. Additionally, it was claimed that all relevant documents were not supplied despite requests.
The High Court, however, methodically dismantled each of the petitioner’s arguments.
On the core issue of the notice’s validity, the court observed that Kesoram Industries had failed to challenge the notice when it was first issued. Instead, the company participated in the assessment proceedings. The legal challenge was initiated only after the final assessment order was passed. The court found no explanation in the petition for this delay. “There has been no contemporaneous challenge in this regard by the petitioner,” the court noted, concluding that having acquiesced and participated, the company “cannot be permitted to challenge the said notice… by way of filing of writ petition after the assessment order has been passed.”
Addressing the grievance regarding the shortened response time for the show-cause notice, the court examined the very SOP that the petitioner relied upon. It found that the SOP itself contains provisions allowing for a response time shorter than the usual seven days, particularly when the limitation date for completing the assessment is imminent. The court acknowledged that in this case, the limitation period was “fast approaching” and held that the action of the assessing officer was not outside the scope of the SOP. The court further termed this objection an “afterthought,” as the company had submitted its response within the specified time without raising any protest about the timeline.
Regarding the non-supply of documents, the court noted that the petitioner had acknowledged receiving a key excel sheet, and deemed the claims about other necessary documents to be matters concerning the merits of the assessment, which are best adjudicated by an appellate authority.
In its final analysis, the court reiterated the established legal position that writ jurisdiction under Article 226 of the Constitution should not ordinarily be invoked against an appealable order. Such intervention is reserved for exceptional cases involving a clear violation of natural justice, jurisdictional error, or statutory infraction. The court concluded, “This is not such a case where the extraordinary jurisdiction can be invoked especially when the petitioner has an efficacious alternative remedy.”
While dismissing the writ petition, the court took a pragmatic step to ensure the petitioner was not left without recourse. Acknowledging the time spent in the writ proceedings, the court granted Kesoram Industries a four-week window to file an appeal before the appropriate appellate authority. It directed the appellate body to consider the time the writ was pending and dispose of the appeal on its merits, deciding on all points raised by the petitioner.
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
