Writ Petition Disposed of Granting Liberty to Challenge Assessment Order Before Statutory Appellate Authority

The Petitioner, a private limited company, filed its income tax returns for the assessment year 2010-11, which were initially accepted after scrutiny by the Assessing Officer.

Subsequently, the Respondent issued a notice dated 25.02.2021 under Section 153A of the Income Tax Act, 1961, alleging escapement of income for the years 2010-11 to 2012-13 based on newly received documents.

The Petitioner’s objections to the notice were rejected on 15.03.2021.

Despite the pending objections, the Petitioner failed to appear further, leading the Assessing Officer to pass a final assessment order and issue a demand note under Section 156 on 01.06.2021.

The Petitioner challenged these proceedings directly before the High Court via a writ petition.

1. Whether the writ petition is maintainable when a final assessment order has been passed and a statutory alternative remedy is available under the Income Tax Act.

2. Whether the initiation of proceedings under Section 153A was valid given that the assets were previously disclosed and scrutinized.

Section 153A governs assessment in cases of search or requisition.

Section 156 pertains to the issuance of a notice of demand.

Section 246A provides for an appeal to the Commissioner (Appeals) against assessment orders.

The Court noted that while the Petitioner challenged the validity of the notice under Section 153A, the Respondent had already passed a final assessment order on 01.06.2021.

The Respondent argued that since a final order existed, the Petitioner must exhaust the statutory remedy of filing an appeal before the Commissioner (Appeals) rather than invoking the High Court's writ jurisdiction.

The Court, without venturing into the merits of whether income had escaped assessment or if the Section 153A notice was valid, determined that the factual disputes and legal objections should first be addressed by the specialized appellate authority provided by statute.

The Court declined to interfere with the impugned order at this stage and disposed of the petition by granting the Petitioner liberty to file a statutory appeal before the Commissioner (Appeals) within 30 days.

The Court directed the appellate authority to decide all objections raised by the Petitioner in an objective manner and in accordance with the law.