MANDEEP KAUR vs. COMMISSIONER OF INCOME TAX, JD

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CWP/5787/1999HC Punjab & HaryanaPHHC01029364199921 November 2013Author: MR. JUSTICE DR. BHARAT BHUSHAN PARSOON,MR. JUSTICE RAJIVE BHALLA4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that as a mere show cause notice had been served after recording a prima-facie opinion that the assessment for the year 1991-92 required re-consideration, the petitioner should have, in the first instance, raised her pleas regarding lack of jurisdiction, insufficiency of reasons under Section 147, and other related matters before the Assessing Officer, rather than approaching the High Court. The Court noted that the Income Tax Act provides a complete procedure for appeals, rectification, and revision, and a writ petition under Article 226 is generally reserved for exceptional circumstances. The adjudication of the show cause notice would necessarily involve disputed questions of fact concerning transactions, income declarations, and properties, which can only be scrutinized by the Assessing Officer after considering the petitioner's objections. Therefore, the writ petitions were dismissed, relegating the petitioner to seek adjudication of the show cause notice. The Assessing Officer was directed to consider all objections raised or to be raised by the assessee in response to the show cause notice, as well as objections relating to the order passed under Section 147. Parties were directed to appear before the Assessing Officer on 31.1.2014.

What were the facts?

The petitioner, Mandeep Kaur, filed two writ petitions (CWP No.5787 of 1999 and CWP No.5788 of 1999) before the High Court of Punjab and Haryana at Chandigarh. The petitions sought a writ of certiorari to quash a show cause notice issued under Section 148 of the Income Tax Act, 1961, for re-assessment concerning assessment year 1991-92. The petitioner argued that the reasons recorded by the Assessing Officer for re-opening the assessment, which suggested she was a benamidar of Sh. Rustam Singh, were insufficient. She also contended that since she had already been assessed for a block period, the Assessing Officer lacked jurisdiction to re-open the assessment under Sections 147 and 148. The petitioner further stated that her objections to the show cause notice had not been considered or decided.

What were the issues?

1. Whether the reasons recorded by the Assessing Officer under Section 147 of the Income Tax Act, 1961, are sufficient to form an opinion that the assessment for the year 1991-92 should be re-opened, and whether the petitioner's contention that she is a benamidar of Sh. Rustam Singh is a valid ground for re-opening. 2. Whether the Assessing Officer has the jurisdiction to re-open the assessment under Sections 147 and 148 of the Act, given that the petitioner was already assessed for the block period 1.4.1985 to 25.7.1995. 3. Whether the show cause notice issued under Section 148 of the Act should be quashed on the grounds that the petitioner's objections have not been considered or decided. Assessee's Contentions: - The reasons recorded by the Assessing Officer for re-opening the assessment are insufficient. - The Assessing Officer lacks jurisdiction to re-open the assessment due to prior assessment for a block period. - The show cause notice should be quashed as the petitioner's objections have not been considered or decided. Revenue's Contentions: - The writ petition should be dismissed as only a show cause notice has been issued, and no adverse order has been passed. - A writ of certiorari to quash the show cause notice is not maintainable as no final adverse opinion has been recorded. - The petitioner should be relegated to seek adjudication of the show cause notice.

Which sections of the Income-tax Act were involved?

Section 148,Section 147

AI-generated summary — verify with the full judgment below

Heard together (2 matters)

W.P. No.5787 of 1999
W.P. No.5788 of 1999

Read from the judgment's own cause title. This page is filed under one of them.

-1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

(1)

C.W.P. No.5787 of 1999. Date of Decision:-21.11.2013. Mandeep Kaur.

.........Petitioner.

Versus Commissioner of Income Tax, Jalandhar and others .........Respondents.

(2)

C.W.P. No.5788 of 1999. Mandeep Kaur.

.........Petitioner.

Versus Commissioner of Income Tax, Jalandhar and others .........Respondents. CORAM: Hon'ble Mr. Justice Rajive Bhalla

Hon'ble Mr. Justice Dr. Bharat Bhushan Parsoon.

***** Present:- Mr. Akshay Bhan, Advocate and Mr. Aalok Mittal, Advocate for the petitioner. Mr. Vivek Sethi, Advocate for the respondents. Rajive Bhalla, J (Oral)

By way of this order, we shall decide CWP No.5787 of 1999 and 5788 of 1999 as they involve adjudication of the same questions of fact Yag Dutt 2013.12.17 19:28 I attest to the accuracy and integrity of this document -2- and law. For the sake of brevity, facts are being taken from CWP No.5787 of 1999. The petitioner is before us praying for issuance of a writ of certiorari for quashing show cause notice issued under Section 148 of the Income Tax Act, 1961 (hereinafter mentioned as, the Act) for re-assessment regarding assessment year 1991-92. Counsel for the petitioner contends that reasons recorded by the Assessing Officer under Section 147 of the Act, for re-opening assessment for the year 1991-92, namely, that the petitioner is a benamidar of Sh. Rustam Singh are insufficient to form an opinion that assessment for the year 1991-92 should be re-opened. It is further submitted that the petitioner having already been assessed for the block period 1.4.1985 to 25.7.1995, the Assessing Officer had no jurisdiction to re-open the assessment by invoking jurisdiction under Sections 147 and 148 of the Act. It is further submitted that the objections raised by the petitioner to the show cause notice issued have neither been considered nor decided and, therefore, the notice served upon the appellant under Section 148 of the Act may be quashed.

Counsel for the revenue submits that as a mere show cause notice has been issued to the petitioner and no adverse order has been passed till date, the writ petition should be dismissed by relegating the petitioner to seek adjudication of the show cause notice. It is further submitted that as no final opinion adverse to the petitioner has been recorded, a writ of certiorari to quash the show cause notice is not maintainable. Yag Dutt 2013.12.17 19:28 I attest to the accuracy and integrity of this document -3-

We have heard counsel for the parties, perused the paper book as well as impugned show cause notice and are of the firm opinion that as a mere show cause notice has been served after recording a prima-facie opinion that assessment for the year 1991-92 requires re-consideration, the petitioner should have, in the first instance, raised the pleas relating to lack of jurisdiction, insufficiency of reasons assigned under Section 147 of the Act and other related matters, before the Assessing Officer, instead of approaching this Court by way of a writ petition. The Income Tax Act provides a complete procedure of multiple appeals, applications for rectification and even revision. Though Article 226 of the Constitution of India does not prohibit an assessee from approaching the High Court but as the statute itself provides sufficient fora for redressal of grievances raised by an assessee, a writ petition may only be filed in exceptional circumstances. Even otherwise, adjudication of the show cause notice would necessarily require adjudication of disputed questions of fact relating to doubtful transactions, declaration of income, properties held by the assessee and her father and, therefore, can only be scrutinized by the Assessing Officer after considering the objections raised by the petitioner.

In view of what has been recorded hereinbefore, the writ petitions are dismissed by relegating the petitioner to seeking adjudication of the show cause notice. The Assessing Officer shall consider all such objections as may have been raised or may be raised by the assessee in response to the show cause notice as well as objections relating to the order Yag Dutt 2013.12.17 19:28 I attest to the accuracy and integrity of this document -4- passed under Section 147 of the Act. Parties are directed to appear before the concerned Assessing Officer on 31.1.2014. (Rajive Bhalla) Judge (Dr. Bharat Bhushan Parsoon)

Judge

November 21, 2013

'Yag Dutt' Yag Dutt 2013.12.17 19:28 I attest to the accuracy and integrity of this document

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