Jilla Sahakari Kendriya Bank Maryadit vs. Commissioner Of Income Tax

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WP/6095/2019HC Madhya Pradesh26 March 2019Bench: HON'BLE THE CHIEF JUSTICE2 pages
For Petitioner: Arjun Prasad Shrivastav
AI SummaryDismissed

What did the High Court hold?

The High Court held that the writ petition was not maintainable as the petitioner had an adequate and efficacious departmental remedy. The Court found that the petitioner was asked to show cause before a final order was passed and that allowing the petition would permit the petitioner to bypass statutory provisions and preempt departmental authorities. The Court distinguished the decisions relied upon by the petitioner, stating they were not applicable to the facts of the present case. The Court deliberately refrained from making any observations on the merits of the case to avoid prejudice to either party. The petition was disposed of summarily.

What were the facts?

The petitioner, Jila Sahakari Kendriya Bank Maryadit Damoh, a Co-operative Bank, is an assessee responsible for deducting Tax Deducted at Source (TDS). A survey under Section 133A was conducted on March 15, 2016, to verify TDS compliance. Subsequently, a notice under Section 131 was issued. The petitioner, instead of responding to a show cause notice dated November 20, 2018, for the Financial Year 2011-12, contended that the proceedings were barred by limitation. The department rejected this contention, leading the petitioner to file a writ petition before the High Court of Madhya Pradesh, seeking to restrain the respondents from passing an assessment order.

What were the issues?

1. Whether the writ petition is maintainable to preempt the passing of an assessment order when an adequate and efficacious departmental remedy exists? (Question of law) The assessee argued that the show cause notice dated November 20, 2018, for FY 2011-12 was barred by limitation, and thus the proceedings should be closed. The assessee relied on decisions from the Gujarat and Bombay High Courts. The revenue contended that the petitioner should not be permitted to bypass statutory provisions and preempt departmental authorities from exercising their statutory powers through a writ petition. The revenue argued that the petitioner has an adequate and efficacious departmental remedy.

Which sections of the Income-tax Act were involved?

Section 133A,Section 131,Section 201

AI-generated summary — verify with the full judgment below

The High Court Of Madhya Pradesh WP-6095 of 2019 [Jila Sahakari Kendriya Bank Maryadit Damoh Vs. Commissioner of Income Tax (TDS)and another] Jabalpur, Dated : 26-03-2019 Shri A.P. Shrivastava, Advocate for the petitioner. He is heard on the question of admission. This is a pre-emptive petition to restrain the respondents from passing an order of assessment. The factual background is that the petitioner bank is a Co-operative Bank and as an assessee is liable to pay tax. Petitioner is also responsible to deduct TDS and deposit it to the credit of the Central Government. A survey under Section 133A was carried out on 15.3.2016 at business premises of the petitioner Bank to verify the compliance of tax deducted at source. A notice under Section 131 was also issued to the General Manager of the Bank to furnish necessary details along with supporting documents. Petitioner instead of answering to the show cause notice, submitted that the Show Cause Notice dated 20.11.2018 u/s 201 of the Act for the F.Y. 2011-12 was barred by limitation and as such proceedings were liable to be closed. The department did not agree with the contention and rejected it vide Annexure/P-2, hence this writ petition for the relief as stated above. 2

After having heard Shri A.P. Shrivastava, Advocate at length and considering the material placed on record, it is clear that petitioner has been asked to show cause before passing final order. In the facts and circumstances of the case, we are of the considered opinion that the petitioner cannot be permitted to bypass the statutory provisions and preempt departmental authorities from exercising statutory powers under the Act through this misconceived writ petition. Against such an order, the aggrieved party has an adequate and efficacious departmental remedy, therefore, at this juncture, we are not inclined to put paid to the show cause notice and the proceedings initiated thereunder. The reliance placed on the decisions of Gujarat and Bombay High Court are clearly distinguishable in the facts and circumstances of the case at hand, hence, they would not come to the rescure of petitioner. We deliberately refrain ourselves from making any observation touching the merit of the case, lest it may cause prejudice to the petitioner or the revenue as the case may be, in the final outcome of the proceedings. The petition is, accordingly, disposed of summarily. Ordered accordingly.

(S.K. SETH)

(VIJAY KUMAR SHUKLA) CHIEF JUSTICE

JUDGE

mn MANOJ NAIR 2019.03.28 11:11:23 +05'30'

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