M/S Tulsi Narayan Garg vs. The Commissioner Of Income Tax

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WP/7092/2014HC Madhya Pradesh19 November 2014Bench: HON'BLE SHRI JUSTICE S.K. GANGELE2 pages
For Petitioner: Pawan Kumar DwivediFor Respondent: Advocate General
AI SummaryWithdrawn

What did the High Court hold?

The High Court held that there was no jurisdictional error apparent on the face of the record that would justify interference under Article 226 of the Constitution of India. The Court noted that the assessee has an alternative statutory remedy of filing an appeal under Section 250 of the Income Tax Act before the Commissioner of Income Tax (Appeals) against the assessment order. Therefore, the Court declined to entertain the writ petition. The petitioner was granted liberty to raise the grounds presented in the petition before the Assessing Officer or the first appellate authority, and these grounds would be addressed on their own merits. The Court did not decide on the merits of the objections raised by the petitioner regarding Section 40A(ia).

What were the facts?

The petitioner, M/s Tulsi Narayan Garg, challenged an order dated September 5, 2014, passed by the Assistant Commissioner of Income Tax, Circle 3, Gwalior. This order rejected the petitioner's objections against a show cause notice issued under Section 148 of the Income Tax Act. The Assessing Officer relied on judgments from the Gujarat High Court (CIT Vs. Sikandar Khan M. Tanvar) and the ITAT Agra Bench (M/s Sai Builders Vs. ITO) to reject the petitioner's contention that Section 40A(ia) applies only to amounts payable at the year-end. The Assessing Officer asserted that the section does not contain such a limitation. Following the rejection of objections, the Assessing Officer was proceeding with the assessment.

What were the issues?

1. Whether the Assessing Officer committed a jurisdictional error by rejecting the petitioner's objections against the show cause notice under Section 148, thereby warranting interference under Article 226 of the Constitution of India? Assessee's Contention: The petitioner argued that the Assessing Officer's order rejecting their objections was illegal, invalid, and improper. They contended that Section 40A(ia) of the Income Tax Act has limited applicability, specifically to cases where amounts are payable at the end of the financial year. The rejection of this contention by the Assessing Officer was the basis of their challenge. Revenue's Contention: The judgment does not explicitly record the revenue's contentions. However, the Assessing Officer's order, which is under challenge, relied on judicial precedents to reject the assessee's submissions regarding the scope of Section 40A(ia).

Which sections of the Income-tax Act were involved?

Section 148,Section 40A(ia),Section 250

AI-generated summary — verify with the full judgment below

WP 7092/2014 ( M/s Tulsi Narayan Garg V state of MP)

19/11/2014. Shri Pavan Dwivedi, Advocate for the petitioner. Heard. By this petition, challenge is made to the legality, validity and propriety of the order passed by the Assessing Officer, i.e. Assistant Commissioner of Income Tax, Circle 3, Gwalior on 5/9/2014 rejecting the objections raised against the show cause notice under section 148 of the Income Tax Act. The Authority relied upon the judgment of Gujrat High Court in the case of CIT Vs. Sikandar Khan M. Tanvar, (2013) 357 ITR 312 and that of the Tribunal at Agra in case of M/s Sai Builders Vs. ITO ward 2(1) Gwalior order dated 27/6/2014, has rejected the contention of the applicant as regards non-applicability of section 40a(ia) that it applies only to those cases where amounts are payable at the end of the year. The Assessing Authority held that there is no such provision in the aforesaid section that TDS provisions will apply only to the cases where amount is payable at the year end. Judgments cited above have been relied upon and accordingly objections have been rejected. Consequent upon rejection of the objections, the Assessing Officer is seizin of the matter for making the assessment. 2 WP 7092/2014 There is no scintilla of doubt that against the assessment which was made by the Assessing Officer, the assessee has alternate remedy of filing a statutory appeal under section 250 of the Income Tax Act before CIT (Appeals). Therefore, in the opinion of this Court, no interference is warranted under Article 226 of the Constitution of India as there appears to be no jurisdictional error apparent on the face of record. The petitioner is always at liberty to assail the grounds raised in this petition on merits or otherwise before the Assessing Officer or/and before the first appellate court and same shall be addressed to by the concerned authority on their own merits. With the aforesaid observations, this petition stands disposed of. (S.K.Gangele)

(Rohit Arya) Judge Judge ppg

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