MULAVOOR URBAN CO-OPERATIVE SOCIETY LTD, vs. THE INCOME TAX OFFICER,

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WP(C)/4368/2023HC KeralaKLHC01010484202309 February 2024Author: HONOURABLE MR. JUSTICE D. K. SINGH4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court found no grounds to entertain the writ petition. It held that the court should not interrupt the process that has commenced with the issuance of a notice under Section 148A, especially when an order under Section 148A(d) has been passed in accordance with the law. While acknowledging the petitioner's submission that the final assessment order had not been passed, the court granted the petitioner 15 days to file their return in response to the notice issued under Section 148. The court directed the assessing authority to examine the filed return and pass the final assessment order in accordance with the law. The principle established is that writ jurisdiction should not be exercised to interfere with ongoing reassessment proceedings unless there are compelling reasons, and parties should generally be relegated to the statutory remedies available.

What were the facts?

The petitioner, Mulavoor Urban Co-operative Society Ltd., a co-operative society engaged in credit services, marketing of agricultural products, and Neethi Medical Shops, failed to file its income tax return for the assessment year 2018-2019. Consequently, the Income Tax Officer initiated reassessment proceedings by issuing a notice dated March 16, 2022, under Section 148A of the Income Tax Act. The petitioner did not respond to this show-cause notice. An order was passed on March 24, 2022, under Section 148A(b), determining that the petitioner's income exceeding fifty lakhs had escaped assessment for the assessment year 2018-2019, deeming it a fit case for reopening under Section 147, and deciding to issue a notice under Section 148. The petitioner challenged this order under Section 148A(d) by filing a writ petition.

What were the issues?

1. Whether the High Court should entertain a writ petition challenging an order passed under Section 148A(d) of the Income Tax Act when the reassessment proceedings have commenced and a notice under Section 148 is yet to be finalized. Assessee's Contention: The learned counsel for the petitioner submitted that the final assessment order has not yet been passed, implying that the proceedings are still at an interlocutory stage and thus amenable to judicial review. Revenue's Contention: The revenue did not explicitly record any contentions in the judgment. However, the court's decision implies an expectation that the petitioner should participate in the reassessment proceedings.

Which sections of the Income-tax Act were involved?

Section 148A,Section 147,Section 148

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH FRIDAY, THE 9TH DAY OF FEBRUARY 2024 / 20TH MAGHA, 1945 WP(C) NO. 4368 OF 2023 PETITIONER/S: MULAVOOR URBAN CO-OPERATIVE SOCIETY LTD, NO. E 1068, REPRESENTED BY ITS SECRETARY, MULAVOOR POST, MUVATTUPUZHA, ERNAKULAM, PIN-686 673. BY ADVS. C.A.JOJO S.JIJI RESPONDENT/S: 1 THE INCOME TAX OFFICER, WARD 1 & TPS, THODUPUZHA, TEMPLE BYPASS ROAD, THODUPUZHA, PIN-685 584., PIN - 685584 2 THE INCOME TAX OFFICER, WARD 1 (1), C R BUILDING, I S PRESS ROAD, COCHIN-682 018. 3 THE PRINCIPAL CHIEF COMMISSIONER, C R BUILDING, I S PRESS ROAD, COCHIN-682 018. BY ADV CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 09.02.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C) NO. 4368 OF 2023 2 JUDGMENT Dated this the 9th day of February, 2024 The present writ petition has been filed by the petitioner, which is a registered Co-operative Society, allegedly engaged in the business of providing credit services, marketing of agricultural products, Neethi Medical Shops among its members. The petitioner did not filed return of his income for the assessment year 2018-2019. The case of the petitioner was reopened and notice dated 16.03.2022, under Section 148A of the Income Tax Act (‘the Act’ for short) was issued.

2.

The petitioner did not file any reply to the said show cause notice, and therefore, an order under Clause (b) of Section 148A came to be passed on 24.03.2022. The assessing authority was of the opinion that the petitioner’s income, which was morethan fifty lakhs had escaped assessment in the assessment year 2018-2019, and therefore, it was a fit case for reopening under Section 147 of the Act and a notice under Section 148 were decided to be issued. Against the decision under Section 148(d), the petitioner has approached this court by filing the present writ petition.

WP(C) NO. 4368 OF 2023 3 3.This court finds no ground to entertain this writ petition. This court should not interrupt the process which has commenced by issuing notice under Section 148A and wherein an order under Section 148A(d) has been passed in accordance with law. Learned counsel for the petitioner submits that the final assessment order has not been passed. Considering the aforesaid submission, the petitioner is granted 15 days time to file his return in response to the notice issued under Section 148, and if the petitioner files the return, the assessing authority should examine the returns and pass final assessment order in accordance with the law. The writ petition is dismissed as above. DINESH KUMAR SINGH JUDGE SJ

WP(C) NO. 4368 OF 2023 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 4368/2023 PETITIONER EXHIBITS Exhibit P1 A TRUE COPY OF THE NOTICE U/S 142(1) DATED 12.12.2022 ISSUED BY THE 1ST RESPONDENT. Exhibit P2 A TRUE COPY OF THE REPLY SUBMITTED TO THE 1ST RESPONDENT DATED 21.12.2022 Exhibit P3 A TRUE COPY OF THE BALANCE SHEET AND PROFIT AND LOSS STATEMENT OF THE PETITIONER FOR AY 2018-19 DATED 31.03.2018 Exhibit P4 A TRUE COPY OF THE NOTICE UNDER CLAUSE (B) OF S.148A DATED 16.03.2022 ISSUED THE 2ND RESPONDENT. Exhibit P5 A TRUE COPY OF THE NOTICE UNDER CLAUSE (D) OF S.148A DATED 24.03.2022 ISSUED THE 2ND RESPONDENT Exhibit P6 A TRUE COPY OF THE NOTICE UNDER SUB- SECTION (1) OF S.142 DATED 12.01.2023 ISSUED THE 2ND RESPONDENT. Exhibit P7 A TRUE COPY OF THE STATUS QUO ORDER IN WP ( C) 24112 OF 2019 DATED 04.09.2019 RESPONDENT EXHIBITS Exhibit R1(a) Copy of the notice under section 148 of the Income Tax Act dated 31.03.2022

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