SREI EQUIPMENT FINANCE LIMITED vs. ADDITIONAL / JOINT / DEPUTY/ ASSISTANT COMMISSIONER OF INCOME TAX

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WPO/1839/2022HC CalcuttaWBCHCO002495202213 April 2022Author: HON'BLE JUSTICE MD. NIZAMUDDIN3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the writ petition was not maintainable. The Court found that the final assessment order dated March 30, 2022, passed under Section 143(3) of the Income Tax Act, 1961, is an appealable order before the Commissioner of Income Tax (Appeal). The Court noted that the assessment proceedings were conducted following due procedure, including issuance of notices and opportunities for hearing, and that the petitioner had participated in the proceedings. Therefore, the Court concluded that there was no violation of the principles of natural justice and that the Assessing Officer was bound to give effect to the order passed by the Commissioner under Section 263, which was not under challenge. The Court declined to entertain the writ petition solely on the ground of the availability of an alternative remedy, without going into the merit of the assessment. The writ petition was dismissed with costs of Rs. 10,000/- upon the learned Advocate for the petitioner due to his rude behavior in court.

What were the facts?

The petitioner, SREI Equipment Finance Limited, filed a writ petition challenging a show cause notice dated March 23, 2022, and a subsequent final assessment order under Section 143(3) dated March 30, 2022. The assessment order was passed to give effect to an order by the Commissioner under Section 263 dated March 4, 2021. The petitioner had not availed the opportunity to object to the draft assessment order. The final assessment order was passed during the pendency of the writ petition. The judgment notes that the assessment order was passed after due procedure, including notices and opportunities for hearing, and that the petitioner's reply dated February 18, 2022, was considered. A letter dated January 19, 2022, was issued to the petitioner, to which no reply was filed, and a notice under Section 142(1) was issued on February 15, 2022.

What were the issues?

1. Whether the writ petition is maintainable challenging the final assessment order under Section 143(3) when an alternative appellate remedy before the Commissioner of Income Tax (Appeal) is available, and the assessment order is appealable. Assessee's Contention (Implicit): The petitioner sought to challenge the assessment order before the High Court, implying a belief that the matter warranted writ intervention, possibly due to procedural irregularities or a fundamental flaw in jurisdiction. The petitioner also challenged the show cause notice and the subsequent final assessment order. Revenue's Contention (Implicit): The revenue, through the U.O.I., likely argued that the writ petition was not maintainable due to the availability of an alternative statutory remedy (appeal to CIT(A)) and that the assessment proceedings were conducted in accordance with the principles of natural justice. The revenue would have also argued that the Commissioner's order under Section 263 was binding on the Assessing Officer. 2. Whether there was a violation of the principles of natural justice in the passing of the assessment order. Assessee's Contention (Implicit): The challenge to the show cause notice and final assessment order suggests the petitioner may have felt their right to be heard was prejudiced. Revenue's Contention (Implicit): The revenue would have contended that due process was followed, citing the notices issued, opportunities for hearing, and consideration of the petitioner's reply.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 263,Section 142(1)

AI-generated summary — verify with the full judgment below

OD – 45 ORDER SHEET WPO/1839/2022 IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURISDICTION ORIGINAL SIDE SREI EQUIPMENT FINANCE LIMITED VS ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX BEFORE: The Hon'ble JUSTICE MD. NIZAMUDDIN Date : 13th April, 2022. Appearance: Mr. Somak Basu, Adv. …For the Petitioner Mr. Tilok Mitra, Adv. …For the U.O.I. The Court : Heard Learned Counsels appearing for the parties. In this matter, petitioner has challenged the impugned show cause notice dated 23rd March, 2022, giving opportunity to the petitioner to file any objection to the draft assessment order before passing final assessment order under Section 143(3) of the Income Tax Act, 1961 in order to give effect to the order passed by the Commissioner under Section 263 of the Income Tax Act dated 4th March, 2021 and the petitioner did not avail the said opportunity. It has also filed a supplementary affidavit challenging the impugned final assessment order under Section 143(3) dated 30th March, 2022 which has been passed during the pendency of the writ petition. The impugned assessment order dated 30th March, 2022 which has been challenged by way of supplementary affidavit is an appealable order before the Commissioner of Income Tax (Appeal). It also appears that

the aforesaid impugned order dated 30th March, 2022 was passed after following due procedure of law by issuance of notice and giving opportunity of hearing from time to time to the petitioner and it has been recorded in the assessment order that petitioner’s reply dated 18th February, 2022 was also taken into consideration. It has been specifically recorded in the assessment order that a letter was issued on the petitioner on 19th January, 2022 but no reply was filed by the petitioner and further a notice under Section 142(1) of the Act was issued to the petitioner on 15th February, 2022 requiring it reply on or before 20th February, 2022. So, this cannot be a case of violation of principles of natural justice and petitioner has participated in the assessment proceeding and now when it has gone against him he wants to challenge the assessment order before this Writ Court and want this Court to act as an appellate authority by going into the merit of the assessment which is the job of the CIT (Appeal). This is not that categories of cases where the proceeding has been initiated by an officer having inherent lack of jurisdiction since in this case assessing officer being subordinate to the Commissioner is bound to give effect to the order by his higher authority which is the Commissioner of Income Tax who had passed order under Section 263 of the Act which is not even subject matter of challenge before this Court. Considering these facts, I am not inclined to entertain this writ petition and the same is accordingly dismissed without going into the

merit of the assessment only on the ground of availability of the alternative remedy. This writ petition is dismissed with costs of Rs. 10,000/- upon Mr. Somak Basu, learned Advocate because of his rude behavior in Court and addressing to the chair in highly disrespectful manner. (MD. NIZAMUDDIN, J.) TR/

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