STAR BATTERY LTD. vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 7 (1) , KOLKATA AND ORS

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WPO/2123/2022HC CalcuttaWBCHCO003109202218 May 2022Bench: HON'BLE JUSTICE MD. NIZAMUDDIN2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the writ petition was premature. The reasoning was based on the fact that the petitioner's objection dated March 31, 2022, against the impugned notice under Section 154 of the Act had not yet been disposed of, and no order adverse to the petitioner had been passed on that objection. The Court directed the assessing officer to consider and dispose of the petitioner's objection in accordance with law, passing a reasoned and speaking order after providing an opportunity of hearing to the petitioner or its authorized representative. This direction was to be complied with within eight weeks from the communication of the order. The principle established is that a writ petition should generally not be entertained when an alternative remedy, such as a pending objection before the assessing officer, is available and has not been exhausted.

What were the facts?

The petitioner, Star Battery Ltd., challenged a notice under Section 154 of the Income Tax Act, 1961, dated February 17, 2022, pertaining to assessment year 2017-2018. The petitioner argued that the notice was not sustainable in law. Following the issuance of the notice, the petitioner filed an objection/reply on March 31, 2022, seeking to drop the proceedings. Both parties informed the Court that this objection was still pending and had not been disposed of. The High Court noted that no adverse order had been passed against the petitioner on their objection.

What were the issues?

1. Whether the writ petition challenging the notice under Section 154 of the Income Tax Act, 1961, is premature when the petitioner's objection against the said notice is still pending and undisposed of? (Question of law and fact, concerning the procedural propriety of entertaining a writ petition before exhausting alternative remedies). Assessee's contention: The petitioner argued that the notice under Section 154 was not sustainable in law, implying a challenge to its validity or the proceedings initiated thereunder. Revenue's contention: The revenue, through its counsel, acknowledged that the petitioner's objection to the notice was pending. The Court's decision implies an implicit contention that the writ petition should not be entertained at this stage.

Which sections of the Income-tax Act were involved?

Section 154

AI-generated summary — verify with the full judgment below

OD – 5 ORDER SHEET WPO/2123/2022 IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURISDICTION ORIGINAL SIDE STAR BATTERY LTD. VS ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 7 (1) KOLKATA AND ORS. BEFORE: The Hon'ble JUSTICE MD. NIZAMUDDIN Date : 18TH MAY, 2022. Appearance: Mr. A. K. Duggar, Adv. Mr. R. Chatterjee, Adv. …for the petitioner Mr. Vipul Kundalia, Adv. Mr. P. Dudhoria, Adv. …for the respondent The Court : In this matter, petitioner has challenged the impugned notice under Section 154 of the Income Tax Act, 1961, dated 17th February, 2022 relating to assessment year 2017-2018 by contending that the same is not sustainable in law. It appears at page 56 of the writ petition that against the impugned show cause notice, petitioner has filed an objection/reply on 31st March, 2022 for dropping the impunged proceedings. Learned advocates for both the parties submit that the said objection is still pending and has not been disposed of. Considering the submissions of the parties, I am of the view that this writ petition is premature since the aforesaid objection of the petitioner dated 31st March, 2022 has not yet been disposed of or any order adverse to the petitioner has been passed on the aforesaid

2 objection and, accordingly, this writ petition being WPO No.2123 of 2022 is disposed of by directing the assessing officer concerned to consider and dispose of the aforesaid objection of the petitioner dated 31st March, 2022 against the impunged notice under Section 154 of the Act in accordance with law and by passing a reasoned and speaking order and after giving opportunity of hearing to the petitioner or its authorised representative within eight weeks from the date of communication of this order. This writ petition being WPO No.2123 of 2022 is accordingly disposed of. (MD. NIZAMUDDIN, J.) A Dey

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