Case Law Details
Ashiana Housing Limited Vs Union of India (Calcutta High Court)
Hc held that 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, we are of the view that appellant has made out a case for entertaining this appeal” and had also stayed the further re-assessment proceedings.
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
The Court : We have heard Mr. Pratyush Jhunjhunwala, learned counsel assisted by Mr. Samit Rudra, learned Advocate appearing for the appellant and Mr. Vipul Kundalia, learned standing counsel assisted by Mr. Amit Sharma, learned Advocate appearing for the respondent.
This intra-court appeal filed by the petitioner is directed against the order dated 6th September, 2022 in WPO No.2458 of 2022. By the said writ petition the appellant/assessee had challenged an order under Section 148A(d) of the Income Tax Act, 1961 (the ‘Act’ for brevity) dated 27th July, 2022 for the assessment year 2015-16. The learned Single Judge has extracted the operative portion of the order passed by the Department under Section 148A(d) of the Act and opined that the said order is not itself an assessment or a demand and the assessee will have ample opportunity and scope in the proceedings after issuance of notice under Section 148 of the Act to make out a case for dropping of the proceedings under Section 147 of the Act. Accordingly, the writ petition stood dismissed. Aggrieved by the same, the writ petitioner/assessee is on appeal.
In our prima facie view what was required to be considered is whether under what circumstances a challenge can be entertained to an order passed under Section 148A(d) of the Act, as it stood amended. The legal principle which had been laid down by several decisions of the Hon’ble Supreme Court while interpreting the provision of the Act before its amendment would equally apply with full force while considering the correctness of an order passed under Section 148A(d) of the Act. That apart, the assessee has no other alternative remedy as against the order impugned in the writ petition and we are also of the prima facie view that it would not be right to hold that all issues can be adjudicated at the time of the reassessment proceedings. We say so because when a jurisdictional issue is raised before the writ Court, even assuming an alternative remedy is available, it will not operate as an absolute bar for entertaining the writ petition as jurisdictional issue goes to the root of the matter and it is one of the exceptional factors carved out by the Hon’ble Supreme Court for exercise of jurisdiction under Article 226 of the Constitution of India. Therefore, we are of the view that the learned Single Bench ought to have considered the correctness of the order impugned before it qua the grounds which were canvassed by the assessee/appellant in his reply to the notice issued under Section 148A(b) of the Act.
We also find that the assessee has questioned the assumption of jurisdiction by referring to Section 149(1) of the Act. In the reply dated 14th June, 2022 the first ground which has been raised by the assessee is by contending that the re-assessment has to necessarily fall within Clause (b) to sub- Section (1) of Section 149 of the Act. Referring to the decision of the Hon’ble Supreme Court in the case of Union of India vs. Ashish Agarwal reported in 2022 SCC Online SC 543, it is contended that the new law relating to re-assessment shall operate and that all defence under Section 149 of the new law shall be available to the assessee. The assessing officer while passing the order passed by the writ petition has given an interpretation and held against the assessee. Therefore, necessity arises for the writ Court to consider the correctness of such finding, which finding cannot be agitated before the assessing officer in the re-assessment proceedings. Thus, we are of the view that the appellant has made out a case for entertaining this appeal.
Accordingly, the appeal stands admitted. If the re-assessment proceeding is allowed to proceed further during the pendency of the appeal, this appeal will become infructuous. Therefore, there will be an order of interim stay of the order passed under Section 148A(d) of the Act dated 28th July, 2022 as well as the consequential notice issued under Section 148 of the Act dated 28th July, 2022 until further orders.
The respondent/department is directed to file their affidavit-in-opposition not only to the grounds in this appeal but also the averments raised in the writ petition. Such affidavit be filed within three weeks; reply, if any, within two weeks thereafter.
List the appeal for hearing on 27th February, 2023.
The judgement pronounced by the Hon’ble Kolkatta High Court in the case of Ashiana Housing Limited Vs Union of India (Calcutta High Court )is really an eye opener for all quasi judicial forums which pass arbitrary orders and defend their action taking cover of availability alternative remedy.