BHUTORIA VALVE UDYOG LIMITED vs. UNION OF INDIA AND ORS.

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WPO/817/2022HC CalcuttaWBCHCO001047202227 June 2022Bench: HON'BLE JUSTICE MD. NIZAMUDDIN3 pages
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What did the High Court hold?

The High Court held that it cannot substitute the findings of the Assessing Officer in a writ petition, especially when the assessment order is based on relevant materials and evidence. The court noted that the assessment order is an appealable order and interfering with it would amount to deciding the assessment on merits, which the Writ Court is not inclined to do. The court found that the assessment order was passed after investigation and relied on various materials. The court also acknowledged that the assessment order was communicated during the pendency of the writ petition. Therefore, the writ petition was disposed of by granting liberty to the petitioner to file an appeal before the CIT (Appeals) within thirty days. The court directed that no coercive recovery action would be taken if the appeal is filed within this period, and the CIT (Appeals) would not raise the issue of limitation. The petitioner was also granted liberty to seek a stay of demand before the appellate authority.

What were the facts?

The petitioner, Bhutoria Valve Udyog Limited, filed a writ petition before the Calcutta High Court challenging a show-cause notice dated March 30, 2021, and an order dated December 13, 2021, rejecting their objection to a notice under Section 148 of the Income Tax Act, 1961. The High Court had permitted the Assessing Officer (AO) to proceed with reassessment but not to communicate the assessment order without leave. The petitioner then filed an application (GA No. 1 of 2022) alleging the AO communicated the assessment order dated March 3, 2022, in violation of the court's prior order. The assessment order was passed under Section 147 read with Section 144(b) of the Act.

What were the issues?

1. Whether the High Court, in its writ jurisdiction, should interfere with an assessment order passed by the Assessing Officer when such an order is appealable. 2. Whether the Assessing Officer violated the High Court's order by communicating the assessment order to the petitioner. Assessee's contentions: The petitioner argued that the Assessing Officer violated the High Court's order by communicating the assessment order. The petitioner essentially sought relief against the assessment order through the writ petition. Revenue's contentions: The judgment does not explicitly record arguments from the revenue. However, the court's observations suggest the revenue's position was that the assessment order was validly passed based on material and evidence.

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 144(b),Section 226

AI-generated summary — verify with the full judgment below

OD –15

ORDER SHEET IA NO. GA/1/2022 In WPO/817/2022 IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURISDICTION ORIGINAL SIDE

BHUTORIA VALVE UDYOG LIMITED Vs UNION OF INDIA AND ORS.

BEFORE: The Hon'ble JUSTICE MD. NIZAMUDDIN Date : 27TH JUNE, 2022.

Appearance: Mr. Rites Goel, Adv. ..for the petitioner

Mr. Tilak Mitra, Adv. ..for the respondents

The Court: Heard learned Advocates appearing for the parties. Petitioner has filed this writ petition against the impugned show- cause notice dated 30th March, 2021 and the order of rejection of the petitioner’s objection dated 13th December, 2021 on the basis of the impugned notice under Section 148 of the Income Tax Act, 1961 and by that order, direction for filing affidavits was passed and the Assessing Officer was given liberty to proceed with the re-assessment proceeding and also to pass final order but the Assessing Officer was directed not to communicate the assessment order, if passed, without leave of the Court.

By this application being GA No. 1 of 2022, petitioner submits that the Assessing Officer, in violation of the order of this Court dated 14th February, 2022 after passing the assessment order, has communicated the same to the petitioner. A copy of the final assessment order dated 3rd March, 2022 under Section 147 read with Section 144(b) of the Income Tax Act, 1961 has been placed before me and on perusal of the same, I find that the said assessment order is passed on the basis many relevant materials and evidence and assessment has been made after an investigation and this Court, in exercise of the Constitutional Writ Jurisdiction under Section 226 of the Constitution by taking aforesaid assessment order into consideration, cannot substitute the finding of the Assessing Officer and the appropriate authority will be the Appellate Authority to scrutinise this evidence and documents upon which the Assessing Officer has relied in his assessment order. This Court cannot ignore the fact that during the pendency of the writ petition, assessment order has already been filed and which is an appealable order and particularly on going through the assessment order I find that if I interfere with the same, it will amount to decide an assessment order on merit by the Writ Court which I am not inclined to do so. This writ petition being WPO No. 817 of 2022 is disposed of by granting liberty to the petitioner to file appeal against the aforesaid assessment order dated 30th March, 2022 and if such appeal is filed by the petitioner before CIT (Appeals) within thirty days from the date, no coercive action of recovery of demand in question shall be taken by the respondent

Assessing Officer concerned and CIT (Appeals) will not raise the point of limitation. After filing the appeal, petitioner will be at liberty to make appropriate application in accordance with law for stay of demand in question before the authority concerned. With these observations and direction, this writ petition being WPO No. 817 of 2022 and the application being GA No. 1 of 2022 stand disposed of. (MD. NIZAMUDDIN, J.)

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