Shiv Mettalicks Pvt. Ltd. Vs PCIT (Orissa High Court)
Summary: The Orissa High Court, in Shiv Mettalicks Pvt. Ltd. Vs Principal Commissioner of Income Tax, Sambalpur and Others, W.P.(C) No.36314 of 2022, decided on 10 January 2023, declined to interfere with an order dated 24 November 2022 passed under Section 148A(d) of the Income-tax Act, 1961. The Division Bench comprising Chief Justice Dr. S. Muralidhar and Justice M.S. Raman considered whether intervention was warranted at an intermediate stage of the reassessment proceedings. The petitioner challenged the proceedings on grounds including limitation and alleged change of opinion by the Assessing Officer. The Court, however, considered its earlier approach in Kailash Kedia Vs Income Tax Officer, where challenges to orders under Section 148A(d) had been deferred to the appropriate subsequent stage.
The High Court examined the Supreme Court’s order dated 2 September 2022 in Anshul Jain Vs Principal Commissioner of Income Tax, SLP(C) No.14823 of 2022, which declined interference with the Punjab and Haryana High Court’s decision concerning reassessment proceedings. It also considered the subsequent Supreme Court order dated 3 January 2023 in Red Chilli International Sales Vs Income Tax Officer, SLP(C) No.86 of 2023. In that matter, the Supreme Court had clarified that the availability of an alternative remedy did not automatically exclude examination of the jurisdictional preconditions for issuing a notice under Section 148. The Orissa High Court noted the different compositions of the Supreme Court Benches and the effect of the subsequent order.
Ultimately, the High Court was not persuaded to interfere with the petitioner’s Section 148A(d) order at that stage. It expressly left open the petitioner’s right to raise all legally available objections, including the contention that the notice under Section 148A(b) was time-barred and that the proceedings involved a mere change of opinion. The writ petition was disposed of without deciding these objections on their merits. The decision is therefore confined to the timing of judicial intervention and preservation of the petitioner’s remedies rather than a determination of the substantive validity of the reassessment.
Cases Discussed
- Kailash Kedia Vs Income Tax Officer, W.P.(C) No.9191 of 2022, order dated 1 December 2022 (Orissa High Court) — The Court followed its earlier approach of declining interference at the intermediate reassessment stage and preserving objections for the appropriate later stage.
- Anshul Jain Vs Principal Commissioner of Income Tax, CWP No.10219 of 2022, judgment dated 2 June 2022 (Punjab and Haryana High Court) — The High Court decision concerning the timing of challenges to reassessment proceedings was considered through the Supreme Court’s subsequent order.
- Anshul Jain Vs Principal Commissioner of Income Tax, SLP(C) No.14823 of 2022, order dated 2 September 2022 (Supreme Court) — The Supreme Court declined to interfere with the Punjab and Haryana High Court’s refusal to entertain the challenge at the intermediate stage.
- Red Chilli International Sales Vs Income Tax Officer, CWP No.10073 of 2022, judgment dated 2 June 2022 (Punjab and Haryana High Court) — The High Court’s order concerning alternative remedy was subsequently examined by the Supreme Court.
- Red Chilli International Sales Vs Income Tax Officer, SLP(C) No.86 of 2023, order dated 3 January 2023 (Supreme Court) — The Supreme Court clarified that the jurisdictional preconditions for reassessment may require judicial examination notwithstanding the availability of alternative remedies.
FULL TEXT OF THE JUDGMENT/ORDER OF ORISSA HIGH COURT
1. The memo of appearance filed by Mr. Sidharth Sankar Mohapatra, learned Senior Standing Counsel for Income Tax Department-Opposite Parties is taken on record.
2. As regards the challenge to an order passed under Section 148A(d) of the Income Tax Act, 1961 (Act) at an intermediate stage, this Court has in its order dated 1st December, 2022 in a batch of writ petitions of which W.P.(C) No.9191 of 2022 (Kailash Kedia v. Income Tax Officer) was a lead matter, declined to interfere relegating the parties to a stage of passing of assessment orders under Section 148 of the Act. In doing so, this Court followed the order dated 2nd September, 2022 of the Supreme Court of India in SLP(C) No.14823 of 2022 (Anshul Jain v. Principal Commissioner of Income Tax), which in turn affirmed the judgment dated 2nd June, 2022 of the Division Bench of the Punjab and Haryana High Court in CWP No.10219 of 2022 (Anshul Jain v. Principal Commissioner of Income Tax).
3. The Court’s attention has been drawn to a subsequent order dated 3rd January, 2023 of another Bench of the Supreme Court of India, the composition of which is different from the Bench which heard the aforementioned case in Anshul Jain (supra), where another order dated 2nd June, 2022 of the High Court of Punjab and Haryana in CWP No.10073 of 2022 (Red Chilli International Sales v. Income Tax Officer) was challenged. In the said SLP (C) No.86 of 2023, the following order was passed by the Supreme Court of India on 3rd January, 2023:
“Delay condoned.
We with the petitioner that the impugned judgment rejecting the writ petition on the ground of alternative remedy does not take into consideration several judgments of this Court, on the jurisdiction of High Court, as writ petitions have been entertained to be examined whether the jurisdiction preconditions for issue of notice under Section 148 of the Income Tax Act, 1961 is satisfied. The provisions of reopening under the Income Tax Act, 1961 have undergone an amendment by the Finance Act, 2021, and consequently the matter would require a deeper and in depth consideration keeping in view the earlier case law. Accordingly, we set aside the observations made by the High Court in the impugned judgment observing that the writ petition would not be maintainable in view of the alternative remedy, clarify that this issue would be examined in depth by the High Court if and when it arise for consideration. We do deem it open to examine this issue in the present case after having examined the notice under Section 148A (b) including the annexure thereto, the reply filed by the petitioner and the order under Section 148A (d) of the Income Tax Act, 1961.
Recording the aforesaid, the special leave petition is disposed of. We clarify that the dismissal of the special leave petition would not be construed as a findings or observations on the merits on case.
Pending application(s), if any, shall stand disposed of.”
4. As the Court views it although the aforementioned order did not take note of the order of the Coordinate Bench of the Supreme Court of India in Anshul Jain (supra), the net result is that the Supreme Court of India declined to interfere with the order of the Punjab and Haryana High Court in Red Chilli International Sales (supra) matter.
5. Consequently, this Court is not persuaded that it should interfere with the impugned order dated 24th November, 2022 in the present case under Section 148A(d) of the Act.
6. Learned counsel for the Petitioner urges that apart from the ground that the notice under Section 148A(b) of the Act was time barred, it is also vitiated by what he terms as ‘mere change of opinion’ by the Assessing Officer.
7. Needless to say, it will be open to the Petitioner to raise all grounds available to the Petitioner in accordance with law, including the above grounds at the appropriate stage as explained by this Court in its order in Kailash Kedia (supra).
8. The petition is accordingly disposed of in the above terms.
