OLANGATTIL IBRAHIM VINISH FAISAL, THRISSUR vs. THE DEPUTY COMMISSIONER OF INCOME TAX

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WP(C)/19494/2022HC KeralaKLHC01040017202221 June 2022Bench: HONOURABLE MR. JUSTICE GOPINATH P.5 pages
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What did the High Court hold?

The High Court held that the petitioner had not made out a case for interference at that stage under Article 226 of the Constitution of India. The Court noted that the petitioner has an effective alternative remedy by way of appeal before the Appellate Authority and that the time limit for filing such an appeal had not expired. Consequently, the writ petition was disposed of with a direction that if the petitioner files a statutory appeal against the assessment order along with a stay petition within the period of limitation, any demand pursuant to the assessment order shall not be enforced until a decision is taken on the stay petition. The Court explicitly stated that it had not expressed any opinion on the merits of the contentions raised by either side, leaving the matter to be decided by the Appellate Authority untrammelled by the observations in the judgment. No issue was expressly left undecided, as the court declined to decide on merits.

What were the facts?

The petitioner, Olangattil Ibrahim Vinish Faisal, filed a writ petition before the High Court of Kerala challenging an assessment order dated May 28, 2022, issued under Section 147 read with Section 144C of the Income Tax Act, 1961. This order pertains to assessment year 2014-15. The petitioner argued that the procedure under Section 144C was not applicable for the assessment year 2014-15 as he was not an 'eligible assessee' for that year, rendering the assessment order without jurisdiction. The respondent department contended that Section 144C applies based on the date of the order, not the assessment year, and that the petitioner had an opportunity to file objections before the Dispute Resolution Panel but failed to do so, instead filing objections before the Assessing Officer. The department also asserted that the Assessing Officer correctly determined the petitioner's residency under Section 6(6) of the Act.

What were the issues?

1. Whether the procedure contemplated by Section 144C of the Income Tax Act, 1961, was applicable to the petitioner for assessment year 2014-15, given that the petitioner was allegedly not an 'eligible assessee' for that year, and if not, whether the assessment order issued under this procedure is without jurisdiction (Question of law and fact, turning on Section 144C). Assessee's contention: The procedure under Section 144C was not applicable for assessment year 2014-15 as the petitioner was not an eligible assessee for that year, making the assessment order non est in law and without jurisdiction. The petitioner relied on the principle that in such cases, a writ petition under Article 226 is maintainable despite an alternative remedy. Revenue's contention: The provisions of Section 144C apply with reference to any order passed or proposed to be passed in respect of an eligible assessee on or after October 1, 2009, irrespective of the assessment year. The petitioner had an effective alternative remedy by way of appeal, and the time limit for filing such an appeal had not expired. The petitioner also failed to file objections before the Dispute Resolution Panel.

Which sections of the Income-tax Act were involved?

Section 147,Section 144C,Section 6(6)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. TUESDAY, THE 21ST DAY OF JUNE 2022 / 31ST JYAISHTA, 1944 WP(C) NO. 19494 OF 2022 PETITIONER/S: OLANGATTIL IBRAHIM VINISH FAISAL, AGED 34 YEARS OLANGATTIL HOUSE, ANUGRAHA, POST OFFICE PUVATHOR, CHAVAKKAD, THRISSUR-680508, KERALA. BY ADVS. DIVYA RAVINDRAN LINCY GLANCY RESPONDENT/S: 1 THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE, INTERNATIONAL TAXATION, CENTRAL REVENUE BUILDING, I.S PRESS ROAD, KOCHI-682018. 2 THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, CENTRAL REVENUE BUILDING, I.S. PRESS ROAD, KOCHI-682 018. OTHER PRESENT: SRI. JOSE JOSEPH (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 21.06.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

W.P.(C).19494/22 2 JUDGMENT Petitioner has approached this court challenging Ext.P12 order of assessment dated 28.05.2022 issued under Section 147 read with 144C of the Income Tax Act. 2. The learned counsel appearing for the petitioner submits that though the petitioner has an effective alternative remedy by way of appeal, the petitioner has chosen to approach this court through a writ petition under Article 226 of the Constitution of India since Ext.P12 assessment order is issued without jurisdiction. It is pointed out that Ext.P12 order relates to assessment year 2014-15. It is pointed out that the procedure contemplated by Section 144C of the Income Tax Act was not applicable to the petitioner for the assessment year 2014-15 as the petitioner was not an “eligible assessee” as far as the assessment year 2014-15 is concerned. It is submitted that the entire procedure followed by the Assessing Officer is, therefore, non est in law and without jurisdiction. It is submitted that, in such cases, it is open to the petitioner to approach this court under Article 226 of the Constitution of India, notwithstanding the availability of an effective alternative remedy. 3. The learned Standing Counsel appearing for the respondent department refers to the provisions of Section 144C and points out that the provisions of Section 144C apply not with reference to the assessment year but with reference to any order passed or proposed to be passed in respect of an

W.P.(C).19494/22 3 eligible assessee on or after 01.10.2009. It is submitted that even if the petitioner became an eligible assessee after the assessment year 2014-15, the procedure under Section 144C was correctly followed by the Assessing Officer in respect of the petitioner. It is submitted that the petitioner had an option of filing objections before the Dispute Resolution Panel following receipt of a draft assessment order. It is pointed out that, despite receiving such an opportunity, the petitioner did not file any objection before the Dispute Resolution Panel and instead filed Ext.P11 objection before the Assessing Officer. It is also pointed out that on facts the order of the Assessing Officer cannot be faulted in law as the Assessing Officer has correctly found that the petitioner was a resident in India having regard to the provisions of Section 6(6) of the Income Tax Act. 4. Having heard the learned counsel for the petitioner and the learned Standing Counsel for the department, I am of the view that the petitioner has not made out a case for interference at this stage in exercise of jurisdiction under Article 226 of the Constitution of India. The petitioner has an effective alternative remedy by way of appeal before the Appellate Authority. It is clear that the time limit for filing a statutory appeal has also not expired. Therefore, this writ petition will stand disposed of directing that if the petitioner files a statutory appeal against Ext.P12 along with a stay petition before the Appellate Authority within the period of limitation, any demand pursuant to Ext.P12 order shall not be enforced against the petitioner till a decision is taken on the stay petition to be filed by the petitioner. I make it clear that I have not

W.P.(C).19494/22 4 expressed any opinion on merits on the contentions raised by either side and it is for the Appellate Authority to decide the matter on merits untrammelled by any observation contained in this judgment. The writ petition is disposed of as above.

Sd/- GOPINATH P. JUDGE okb/21.6.22 //True copy// PS to Judge

W.P.(C).19494/22 5 APPENDIX OF WP(C) 19494/2022 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE NOTICE ISSUED BY THE 1ST RESPONDENT UNDER SECTION 148 OF THE ACT, DATED 31.3.2021. Exhibit P2 TRUE COPY OF THE NOTICE UNDER SECTION 143(2) ISSUED BY THE 1ST RESPONDENT DATED 30.6.2021. Exhibit P3 TRUE COPY OF THE REPLY DATED 2.8.2021. Exhibit P4 TRUE COPY OF THE NOTICE ISSUED BY THE 1ST RESPONDENT UNDER SECTION 142(1) DATED 26.11.21 Exhibit P5 TRUE COPY OF THE NOTICE DATED 14.1.2022, ISSUED BY THE 1ST RESPONDENT. Exhibit P6 TRUE COPY OF THE NOTICE DATED 15.2.2022 ISSUED UNDER SECTION 142(1) BY THE 1ST RESPONDENT. Exhibit P7 TRUE COPY OF THE PAGE IN THE INCOME TAX PORTAL SHOWING THE REPLY FILED BY THE PETITIONER DATED 7.2.2022 AND 20.2.2022. Exhibit P8 TRUE COPY OF THE SHOW CAUSE NOTICE ISSUED BY THE 1ST RESPONDENT DATED 28.02.2022. Exhibit P9 TRUE COPY OF THE REPLY SUBMITTED BY THE PETITIONER DATED 3.3.2022. Exhibit P10 TRUE COPY OF THE DRAFT ASSESSMENT ORDER ISSUED UNDER SECTION 144C OF THE ACT DATED 7.3.2022. Exhibit P11 TRUE COPY OF THE OBJECTION SUBMITTED AGAINST THE DRAFT ORDER DATED 6.4.2022. Exhibit P12 TRUE COPY OF THE ASSESSMENT ORDER PASSED UNDER SECTION 147 R.W.S 144C DATED 28.5.2022 ISSUED BY THE 1ST RESPONDENT.

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