MD YASIN CONSTRUCTION PVT LTD THROUGH ITS DIRECTOR NAMELY MD TASIN V. THE DIRECTOR GENERAL OF INCOME TAX (INVESTIGATION) PATNA

WPC/3039/2023

AI Insights

Md. Yasin Construction Pvt. Ltd. filed a writ petition challenging the re-assessment orders and notices issued under the Income Tax Act, 1961 for the assessment year 2015-16. The petitioner argued that the re-assessment was based on grounds that had already been concluded in a previous assessment order, claiming it was a change of opinion and thus illegal. The respondents, including the Director General of Income Tax (Investigation) Patna and other officials, defended the re-assessment. The court focused on the maintainability of the writ petition, emphasizing the availability of an alternative remedy through statutory appeals under the Income Tax Act. The court referenced several precedents to support its decision, highlighting that jurisdictional errors or violations of natural justice could warrant intervention under Article 226, but the mere change of opinion does not.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 672991 (HC-JHARKHAND)
• Appeal Type: Others
• Pronouncement Date: 25-07-2024
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax and others Vs. Chhabil Dass Agarwal, Whirlpool Corpn. Vs. Registrar of Trade Marks, Income Tax officer, Ward No. 16(2) Vs. Techspan India Private Limited, Thansingh Nathmal Vs. Supt. of Taxes
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: KUMAR VAIBHAV; ANURAG VIJAY; OM PRAKASH; DURGESH AGARWAL
• Assessee Lawyers: LAVANYA GADODIA
• Keywords: Alternative remedy; Change of opinion; Jurisdictional Error; Re-assessment; Writ of Certiorari
• Section: 147; 148; 144; 143(3); 246A; 143; 148A(d)

Judgement Text

" -1 of 10- IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P. (T) No. 3039 of 2023 Md. Yasin Construction Pvt. Ltd., a company incorporated under the Companies Act, 1956 having its registered office at College Road, P.O. & P.S.- Simdega, District- Simdega (Jharkhand), PIN -835223, through its director namely Md. Tasin, aged about 47 years, son of Late Md. Yasin, resident of 1B Sir-Syed Aalia Villa, Jamia Nagar, Kadru, P.O. Doranda, P.S. Argora, District – Ranchi (Jharkhand), PIN – 834002. … PETITIONER Versus 1. Director General of Income Tax (Investigation) Patna, having its office at 3rd Floor, C R Building, B.C. Patel Marg, Patna, P.O. & P.S. Patna, District – Patna (Bihar), PIN – 800001 2. Joint Commissioner of Income Tax – Central Circle, having its office at Mahavir Tower, Main Road, P.O. G.P.O. & P.S. Lower Bazar, District – Ranchi (Jharkhand), PIN-834001. 3. Assistant Commissioner of Income Tax, Central Circle-2, Ranchi, having its office at Mahavir Tower, Main Road, P.O. G.P.O. & P.S. Lower Bazar, District – Ranchi (Jharkhand), PIN – 834001. … RESPONDENTS --------- CORAM: HON’BLE THE ACTING CHIEF JUSTICE HON’BLE MR. JUSTICE ARUN KUMAR RAI --------- For the Petitioner: Ms. Lavanya Gadodia, Advocate For the Respondents: Mr. Kumar Vaibhav, Sr. S.C. ITD Mr. Anurag Vijay A.C. Mr. Om Prakash, A.C. Mr. Durgesh Agarwal, A.C. --------- 11/Dated: 25.07.2024 Per Sujit Narayan Prasad, A.C.J. 1) This writ application is listed under the heading ‘For Orders’. 2) Following prayers have been made in the writ petition filed under Article 226 of the Constitution of India:- (i) For issuance of an appropriate writ(s)/order(s)/ direction(s), including a writ of Certiorari for quashing/setting aside the Notice dated 28.12.2022 (Annexure-18) issued under Section 148 of the Income Tax Act, 1961 ('the Act') in respect of A.Y. 2015-16 as -2 of 10- being wholly illegal, unjust and arbitrary, especially in view of the fact that the grounds/reasons for re-opening of assessment for said assessment year already stood concluded vide Assessment Order dated 28.12.2017 under Section 143 read with Section 144 of the Act. (ii) For issuance of an appropriate writ(s)/order(s)/ direction(s), including a writ of Certiorari for quashing/setting aside the Order dated 28.12.2022 (Annexure-17) passed under Section 148A(d) of the Act in respect of A.Y. 2015-16 as being wholly arbitrary, unjust and illegal, as the reasons provided for re-opening of assessment for said assessment year already stood concluded vide Assessment Order dated 28.12.2017 under Section 143 read with Section 144 of the Act. (iii) For issuance of an appropriate writ(s)/order(s)/direction(s) including a writ of Declaration declaring that initiation of re-assessment proceedings in respect of A.Y. 2015-16 vide issuance of Notice dated 28.12.2022 under Section 148 on the grounds which already stood concluded vide Assessment Order dated 28.12.2017 passed under Section 143 read with Section 144 of the Act, and which were thereafter confirmed vide Order dated 29.3.22 passed under Section 147 read with Section 143(3) of the Act is wholly illegal, unjust and amounts to change of opinion, which cannot be sustained in the eyes of law. (iv) For issuance of further appropriate writ/order/direction including a Writ of Certiorari for quashing/setting aside the Re-assessment Order dated 30.5.2023 as well as the consequential Demand Notice dated 30.5.2023 (Annexure 21 Series) as being wholly arbitrary, illegal and without jurisdiction especially in view of the fact that the same has been passed by making additions to the income of the Assessee on the grounds which already stood concluded vide Assessment Order dated 28.12.2017, and by making -3 of 10- further additions without giving proper opportunity of hearing to the Petitioner. 3) Ms. Lavanya Gadodia, learned counsel appearing for the petitioner, has prayed for adjournment of the case. 4) However, adjournment of the case has seriously been objected by the learned counsel for the Revenue on the ground that revenue to the tune of Rs.27,44,100/- is involved in this matter and the petitioner is enjoying interim relief since 09.10.2023. 5) Mr. Kumar Vaibhav, learned counsel appearing for the Revenue, has further submitted that the writ application itself is not maintainable on the ground of availability of alternative remedy of appeal under Article 246 of the Income Tax Act, 1961. The learned counsel in order to fortify his argument has relied upon the judgment rendered in the case of Commissioner of Income Tax and others Vs. Chhabil Dass Agarwal, (2014) 1 SCC 603. 6) Thereupon, Ms. Lavanya Gadodia, learned counsel for the petitioner, has submitted that the writ petition is maintainable on the ground that there is a jurisdictional error in making the assessment by the Assessing Officer. By referring to the order impugned dated 28.12.2022, the learned counsel for the petitioner has submitted that the issue of jurisdiction is based upon the change of opinion. 7) Heard the learned counsels for the parties. 8) The issue of maintainability since has been raised and as such, it is incumbent upon this Court to decide the issue of maintainability first and only if the writ petition will be maintainable, then only the question of entering into the issue of merits will be there. -4 of 10- 9) Law has been well been settled that there is no restriction in exercising the power by the High Court under Article 226 of the Constitution of India. However, there is self imposes restriction upon the High Court in exercising the power conferred under Article 226 of the Constitution of India and it can be exercised depending upon the facts and circumstances available in the case. 10) The law has been laid down that in which case the power under Article 226 of the Constitution of India can be exercised. The deliberation on this issue has been dealt with by the Hon’ble Apex Court in the case of Whirlpool Corpn. Vs. Registrar of Trade Marks, (1998) 8 SCC 1. It is evident from the aforesaid judgment as per paragraphs 14 and 15 that in the case of jurisdictional error or if there is violation of principles of natural justice, then, even if the alternative remedy is available under the statute, the Writ Court can exercise its power under its extraordinary jurisdiction conferred under Article 226 of the Constitution of India. 11) Now this Court is proceeding to examine the issue of maintainability on the basis of the factual aspects as also the argument advanced on behalf of learned counsel for the parties. 12) The question of jurisdictional error has been agitated mainly on the ground that there is change in opinion. The jurisdictional error goes to the root of the issue as has been decided by Hon’ble Apex Court in the case of Income Tax officer, Ward No. 16(2) Vs. Techspan India Private Limited and another, (2018) 6 SCC 685. 13) If any authority has gone beyond his jurisdiction and if the adjudication is being made, then such decision will be nullity in the eye of law and in such circumstances, it is not available for the Writ -5 of 10- Court to relegate the party to avail the remedy of appeal, reason being that if the order itself is a nullity in the eye of law then why the party will be relegated to the appellate forum, rather than giving him a declaration of the order said to be the nullity due to the jurisdictional error. 14) So far as the change of opinion is concerned, the same, according to our considered view, cannot be said to be a jurisdictional issue, rather, the same is only be said to be a factual dispute depending upon the facts and circumstances upon which the litigants are relying. Therefore, the change in opinion cannot be said to be a jurisdictional issue and, hence, the same cannot be taken into consideration while deciding the maintainability of the writ petition, if the alternative remedy of appeal is available. 15) The reference of the judgment of the Hon’ble Apex Court in the case of Techspan India Private Limited (supra) needs to be referred herein as under:- “18. Before interfering with the proposed reopening of the assessment on the ground that the same is based only on a change in opinion, the court ought to verify whether the assessment earlier made has either expressly or by necessary implication expressed an opinion on a matter which is the basis of the alleged escapement of income that was taxable. If the assessment order is non-speaking, cryptic or perfunctory in nature, it may be difficult to attribute to the assessing officer any opinion on the questions that are raised in the proposed reassessment proceedings. Every attempt to bring to tax, income that has escaped assessment cannot be absorbed by judicial intervention on an assumed change of opinion even in cases where the order of assessment does not address itself to a given aspect sought to be examined in the reassessment proceedings.” -6 of 10- 16) In the aforesaid paragraph it has been observed by the Hon’ble Apex Court that the proposed reopening of the assessment on the ground that the same is based only on a change of opinion, the Court ought to verify whether the assessment earlier made has either expressly or by necessary implication expressed an opinion on a matter which is the basis of the alleged escapement of income that was taxable. If the assessment order is non-speaking, cryptic or perfunctory in nature, it may be difficult to attribute to the assessing officer any opinion to the questions that are raised in the proposed reassessment proceedings. 17) It is, thus, evident that the said paragraph contemplates of two parameters. The first is that the change of opinion is to be verified from the records regarding the assessment which has been made on earlier occasion is proper one, or the subsequent assessment is the proper one. If such a situation is there, then the same is to be deliberated upon by the authority by going through the documents available on record and on consideration of the rival submissions advanced on behalf of the parties, meaning thereby, the same pertains to the adjudication of fact. 18) So far as the second part is concerned, the Hon’ble Apex Court has observed that while considering the change in opinion, the order must not be non-speaking and based upon non-speaking order, there cannot be any consideration of the fact that the assessment is based upon the change in opinion. 19) This Court in order to consider the said aspect has gone through the order impugned and found therefrom that the order is not cryptic, rather it is a detailed order basis upon the documents which -7 of 10- were assessed/scrutinized by the Assessing Officer and basis upon the same, the assessment order was made, but when subsequently it was found that the disclosure of the documents needs to be statement in the income tax which is also based upon the material document which led the revenue to issue notice. 20) It is, thus, evident from the impugned order that the said order is not a cryptic one, rather it is a detailed order on consideration of the rival submissions of the parties based upon the appreciation of the documents. 21) The Hon’ble Apex Court has also considered the scope of Article 226 of the Constitution of India in the case of Chhabil Dass Agarwal (supra), wherein it has been laid down in paragraphs 15 and 16 that on the ground availability of alternative remedy, the law has been reiterated by laying down the rule of alternative remedy that where the statutory authority has not acted in accordance with the provisions of the enactment in question, or in defiance of the fundamental principles of judicial procedures, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of the principles of natural justice, then only the High Court can exercise jurisdiction under Article 226 of the Constitution of India, but in absence of such eventuality, if the effective alternative remedy is available to the aggrieved person, then the writ petition is not entertainable. 22) The Hon’ble Apex Court has further considered in paragraph 16 that the Income Tax Act provides completes machinery for assessment/reassessment of tax, imposition of penalty and for obtaining relief in respect of any improper orders passed by the -8 of 10- Revenue authorities, and as such, the assessee could not be permitted to abandon that machinery and to invoke the jurisdiction of the High Court under Article 226 of the Constitution of India when he had adequate remedy available to him by way of an appeal to the Commissioner of Income Tax (Appeals). For ready reference the paragraph no. 15 and 16 is being quoted as under: “15. Thus, while it can be said that this Court has recognised some exceptions to the rule of alternative remedy i.e. where the statutory authority has not acted in accordance with the provisions of the enactment in question, or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of the principles of natural justice, the proposition laid down in Thansingh Nathmal case [AIR 1964 SC 1419] , Titaghur Paper Mills case [Titaghur Paper Mills Co. Ltd. v. State of Orissa, (1983) 2 SCC 433 : 1983 SCC (Tax) 131] and other similar judgments that the High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field. Therefore, when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation. 16. In the instant case, the Act provides complete machinery for the assessment/reassessment of tax, imposition of penalty and for obtaining relief in respect of any improper orders passed by the Revenue Authorities, and the assessee could not be permitted to abandon that machinery and to invoke the jurisdiction of the High Court under Article 226 of the Constitution when he had adequate remedy open to him by an appeal to the Commissioner of Income Tax (Appeals). The remedy under the statute, however, must be effective and not a mere formality with no substantial relief. In Ram and Shyam Co. v. State of Haryana [(1985) 3 SCC 267] -9 of 10- this Court has noticed that if an appeal is from “Caesar to Caesar's wife” the existence of alternative remedy would be a mirage and an exercise in futility.” 23) This Court taking, into consideration the discussions made hereinabove as also the fact that the provision of appeal as under Section 246A of the Act is available, is of the view that it is not a case where any of the conditions for maintaining the writ petition as has been laid down either in the case of Whirlpool Corpn. (supra) or in the case of Chhabil Dass Agarwal (supra) as also in the case of Thansingh Nathmal Vs. Supt. of Taxes, AIR 1964 SC 1419, is fulfilled. 24) Accordingly, this Court is of the view that the instant writ petition is not fit to be entertained on the ground of effective alternative remedy available under Section 246A of the Income Tax Act, 1961. 25) Therefore, this Court is of the view that in such a factual aspect where the assessment order is being disputed by the petitioner on fact, then it will not be proper for this Court to exercise its extraordinary jurisdiction conferred under Article 226 of the Constitution of India in a situation where the effective alternative remedy of appeal is available under Section 246A of the Income Tax Act, 1961. 26) Accordingly, this writ petition is held to be not maintainable and is, thus, dismissed. 27) However, it is left open for the petitioner to avail the alternative remedy as provided under Section 246A of the Income Tax Act, 1961. Learned counsel for the petitioner submits that the petitioner will be filing the appeal within one month. In that eventuality, the Appellate Authority will decide the appeal without being prejudiced by any of the -10 of 10- observations made in this order and shall take independent decision based upon the factual aspects in accordance with law within a period of three months from the date of filing of such appeal within one month from today. 28) With the aforesaid directions and observations, this writ petition stands disposed of. (Sujit Narayan Prasad, A.C.J.) (Arun Kumar Rai, J.) A.F.R. Manoj/uploaded "