Mohd. Sajid Bains V. The Income Tax Officer, Ward-1 and Union Of India, Through Principal Commissioner Of Income Tax, Jaipur-2

CW/5605/2023

AI Insights

The case involves Mohd. Sajid Bains challenging a show cause notice issued under Section 148 of the Income Tax Act, 1961 by the Income Tax Officer, Ward-1, Sikar. The petitioner argued that the notice was issued without jurisdiction and contrary to a CBDT notification. The respondents contended that the petition was premature as the proceedings were ongoing and the petitioner had the opportunity to respond. The court referenced several Supreme Court decisions emphasizing that writ petitions should not typically be entertained at the show cause notice stage, especially when an alternative statutory remedy is available.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 795766 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 31-01-2024
• Assessment Year: misc
• Other Referred Cases: Union of India (UOI) and Ors. Vs. Coastal Container Transporters Association & Ors., Commissioner of Central Excise, Haldia Vs. Krishna Wax (P) Ltd., State of Madhya Pradesh & Ors. Vs. Commercial Engineers and Body Building Company Limited, State of Assam Vs. Barak Upatyaka D.U. Karmachari Sanstha, Union of India (UOI) & Ors. Vs. Vicco Laboratories
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: SANDEEP PATHAK
• Assessee Lawyers: SHAFI CHOUHAN
• Keywords: Assessment; Income Tax; Jurisdiction; Show cause notice
• Section: 148

Judgement Text

"[2024:RJ-JP:5126-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 5605/2023 Mohd. Sajid Bains, (Earlier Known As Sajid Khursheed Bains) S/o Shri Khursheed Ahmed Bains, Kan Ji Ki Haveli, Fatehpur Shekhawati, Fatehpur, Distt. Sikar - 332301 (Rajasthan) ----Petitioner Versus 1. The Income Tax Officer, Ward-1, Income Tax Office, Todi Nagar, Sanwali Road, Sikar-332001 (Rajasthan) 2. Union Of India, Through Principal Commissioner Of Income Tax, Jaipur-2, Central Revenue Building, Statue Circle, Jaipur-302010 (Rajasthan) ----Respondents For Petitioner(s) : Mr. Shafi Mohammed Chouhan through VC For Respondent(s) : Mr. Sandeep Pathak HON'BLE MR. JUSTICE INDERJEET SINGH HON'BLE MR. JUSTICE VINOD KUMAR BHARWANI REPORTABLE Order 31/01/2024 By the Court (Per Hon’ble Mr. Justice Inderjeet Singh):- 1. Today, this matter was listed before the Coordinate Bench (Court No.5) and as per the notice in the supplementary cause- list, the urgent matters were mentioned before this Court. 2. Counsel for the petitioner mentioned the matter before this Court even without informing the opposite counsel and pressed much hard for finally deciding the matter at this stage only. 3. During the course of the proceedings, we called upon the opposite counsel for the Department to assist this Court. On the request made by counsel for the petitioner, we have heard the matter finally at this stage. 4. This writ petition has been filed by the petitioner challenging the order dated 30.03.2023 passed by the respondent No.1 under [2024:RJ-JP:5126-DB] (2 of 12) [CW-5605/2023] Section 148 of the Income Tax Act, 1961 (to be referred as 'the Act of 1961'). 5. Counsel for the petitioner submits that the respondents have no jurisdiction to issue the notice under Section 148 of the Act of 1961 as the same has been issued without following the notification dated 29.03.2022 issued by the CBDT. He further submitted that a Coordinate Bench of this Court at Principal Seat, Jodhpur in D.B. Civil Writ Petition No.8296/2023 (Krishna Kumar Vs. The Income Tax Officer & Anr.), after considering the matter has directed that the proceedings may go on but the final order of assessment be not passed. 6. On the other hand, counsel for the respondent opposed the writ petition and submitted that this writ petition has been filed by the petitioner at the premature stage against the show-cause notice only as the proceedings are still pending before the authority before whom the petitioner can submit reply and raise all his objections available under the law. 7. We have considered the submissions made by counsel for the parties and perused the record. 8. The Hon’ble Supreme Court in the matter of Union of India (UOI) and Ors. Vs. Coastal Container Transporters Association & Ors., reported in (2019) 20 SCC 446 in para-19 has held as under :- “19. On the other hand, we find force in the contention of the learned senior Counsel, Sri Radhakrishnan, appearing for the Appellants that the High Court has committed error in entertaining the writ petition Under Article 226 of Constitution of India at the stage of show cause notices. Though there is no bar as such for entertaining the writ petitions at the stage of show cause notice, [2024:RJ-JP:5126-DB] (3 of 12) [CW-5605/2023] but it is settled by number of decisions of this Court, where writ petitions can be entertained at the show cause notice stage. Neither it is a case of lack of jurisdiction nor any violation of principles of natural justice is alleged so as to entertain the writ petition at the stage of notice. High Court ought not to have entertained the writ petition, more so, when against the final orders appeal lies to this Court. The judgment of this Court in the case of Union of India and Anr. v. Guwahati Carbon Ltd. (supra) relied on by the learned senior Counsel for the Appellants also supports their case. In the aforesaid judgment, arising out of Central Excise Act, 1944, this Court has held that excise law is a complete code in order to seek redress in excise matters and held that entertaining writ petition is not proper where alternative remedy under statute is available. When there is a serious dispute with regard to classification of service, the Respondents ought to have responded to the show cause notices by placing material in support of their stand but at the same time, there is no reason to approach the High Court questioning the very show cause notices. Further, as held by the High Court, it cannot be said that even from the contents of show cause notices there are no factual disputes. Further, the judgment of this Court in the case of Malladi Drugs & Pharma Ltd. v. Union of India MANU/SC/0407/2004 : 2004 (166) ELT 153 (S.C.), relied on by the learned senior Counsel for the Appellants also supports their case where this Court has upheld the judgment of the High Court which refused to interfere at show cause notice stage.” 9. The Hon’ble Supreme Court in the matter of Commissioner of Central Excise, Haldia Vs. Krishna Wax (P) Ltd., reported in (2020) 12 SCC 572 in para-12 has held as under :- “12. It has been laid down by this Court that the excise law is a complete code in itself and it would normally not be appropriate for a Writ Court to entertain a petition Under Article 226 of the Constitution and that the concerned person must first raise all the objections before the authority [2024:RJ-JP:5126-DB] (4 of 12) [CW-5605/2023] who had issued a show cause notice and the redressal in terms of the existing provisions of the law could be taken resort to if an adverse order was passed against such person. For example in Union of India and Anr. v. Guwahati Carbon Limited MANU/SC/1256/2012 : (2012) 11 SCC 651, it was concluded; \"The Excise Law is a complete code in order to seek redress in excise matters and hence may not be appropriate for the writ court to entertain a petition Under Article 226 of the Constitution\", while in Malladi Drugs and Pharma Ltd. v. Union of India MANU/SC/0407/2004 : 2004 (166) ELT 153 (S.C.), it was observed: ...The High Court, has, by the impugned judgment held that the Appellant should first raise all the objections before the Authority who have issued the show cause notice and in case any adverse order is passed against the Appellant, then liberty has been granted to approach the High Court... ...in our view, the High Court was absolutely right in dismissing the writ petition against a mere show cause notice. It is thus well settled that writ petition should normally not be entertained against mere issuance of show cause notice. In the present case no show cause notice was even issued when the High Court had initially entertained the petition and directed the Department to prima facie consider whether there was material to proceed with the matter.” 10. The Hon’ble Supreme Court in the matter of the State of Madhya Pradesh & Ors. Vs. Commercial Engineers and Body Building Company Limited, reported in 2022/INSC/1088 in para-6 has held as under :- [2024:RJ-JP:5126-DB] (5 of 12) [CW-5605/2023] “6. At this stage, a recent decision of this Court in the case of The State of Maharashtra and Ors. v. Greatship (India) Limited (Civil Appeal No. 4956 of 2022, decided on 20.09.2022) is required to be referred to. After taking into consideration the earlier decision of this Court in the case of United Bank of India v. Satyawati Tondon and Ors., reported in MANU/SC/0541/2010 : (2010) 8 SCC 110, it is observed and held that in a tax matter when a statutory remedy of appeal is available, the High Court ought not to have entertained the writ petition Under Article 226 of the Constitution of India against the Assessment Order by-passing the statutory remedy of appeal. While holding so, this Court considered the observations made by this Court in paragraphs 49 to 53 in Satyawati Tondon (supra), which read as under: 49. The views expressed in Titaghur Paper Mills Co. Ltd. v. State of Orissa MANU/SC/0317/1983 : (1983) 2 SCC 433 were echoed in CCE v. Dunlop India Ltd. MANU/SC/0169/1984 : (1985) 1 SCC 260 in the following words: (SCC p. 264, para 3) 3. ... Article 226 is not meant to short- circuit or circumvent statutory procedures. It is only where statutory remedies are entirely ill-suited to meet the demands of extraordinary situations, as for instance where the very vires of the statute is in question or where private or public wrongs are so inextricably mixed up and the prevention of public injury and the vindication of public justice require it that recourse may be had to Article 226 of the Constitution. But then the Court must have good and sufficient reason to bypass the alternative remedy provided by statute. [2024:RJ-JP:5126-DB] (6 of 12) [CW-5605/2023] Surely matters involving the revenue where statutory remedies are available are not such matters. We can also take judicial notice of the fact that the vast majority of the petitions Under Article 226 of the Constitution are filed solely for the purpose of obtaining interim orders and thereafter prolong the proceedings by one device or the other. The practice certainly needs to be strongly discouraged. 50. In Punjab National Bank v. O.C. Krishnan MANU/SC/0452/2001 : (2001) 6 SCC 569 this Court considered the question whether a petition Under Article 227 of the Constitution was maintainable against an order passed by the Tribunal Under Section 19 of the DRT Act and observed: (SCC p. 570, paras 5-6) 5. In our opinion, the order which was passed by the Tribunal directing sale of mortgaged property was appealable Under Section 20 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short 'the Act'). The High Court ought not to have exercised its jurisdiction Under Article 227 in view of the provision for alternative remedy contained in the Act. We do not propose to go into the correctness of the decision of the High Court and whether the order passed by the Tribunal was correct or not has to be decided before an appropriate forum. 6. The Act has been enacted with a view to provide a special procedure for recovery of debts due to the banks and the financial institutions. There is a hierarchy of appeal provided in the Act, namely, filing of an appeal Under Section 20 and this fast-track procedure cannot be allowed to be derailed either by taking recourse to proceedings Under Articles 226 and 227 of the Constitution or by filing a civil suit, which is expressly barred. Even though a provision under an Act cannot expressly oust the [2024:RJ-JP:5126-DB] (7 of 12) [CW-5605/2023] jurisdiction of the Court Under Articles 226 and 227 of the Constitution, nevertheless, when there is an alternative remedy available, judicial prudence demands that the Court refrains from exercising its jurisdiction under the said constitutional provisions. This was a case where the High Court should not have entertained the petition Under Article 227 of the Constitution and should have directed the Respondent to take recourse to the appeal mechanism provided by the Act. 51. In CCT v. Indian Explosives Ltd. [MANU/SC/7246/2008 : (2008) 3 SCC 688] the Court reversed an order passed by the Division Bench of the Orissa High Court quashing the show-cause notice issued to the Respondent under the Orissa Sales Tax Act by observing that the High Court had completely ignored the parameters laid down by this Court in a large number of cases relating to exhaustion of alternative remedy. 52. In City and Industrial Development Corpn. v. Dosu Aardeshir Bhiwandiwala [MANU/SC/8250/2008 : (2009) 1 SCC 168] the Court highlighted the parameters which are required to be kept in view by the High Court while exercising jurisdiction Under Article 226 of the Constitution. Paras 29 and 30 of that judgment which contain the views of this Court read as under: (SCC pp. 175-76) 29. In our opinion, the High Court while exercising its extraordinary jurisdiction Under Article 226 of the Constitution is duty-bound to take all the relevant facts and circumstances into consideration and decide for itself even in the absence of proper affidavits from the State and its instrumentalities as to whether any case at all is made out requiring its interference on the basis of the material made available on record. There is nothing like issuing an ex [2024:RJ-JP:5126-DB] (8 of 12) [CW-5605/2023] parte writ of mandamus, order or direction in a public law remedy. Further, while considering the validity of impugned action or inaction the Court will not consider itself restricted to the pleadings of the State but would be free to satisfy itself whether any case as such is made out by a person invoking its extraordinary jurisdiction Under Article 226 of the Constitution. 30. The Court while exercising its jurisdiction Under Article 226 is duty-bound to consider whether: (a) adjudication of writ petition involves any complex and disputed questions of facts and whether they can be satisfactorily resolved; (b) the petition reveals all material facts; (c) the Petitioner has any alternative or effective remedy for the resolution of the dispute; (d) person invoking the jurisdiction is guilty of unexplained delay and laches; (e) ex facie barred by any laws of limitation; (f) grant of relief is against public policy or barred by any valid law; and host of other factors. The Court in appropriate cases in its discretion may direct the State or its instrumentalities as the case may be to file proper affidavits placing all the relevant facts truly and accurately for the consideration of the Court and particularly in cases where public revenue and public interest are involved. Such directions are always required to be complied with by the State. No relief could be granted in a public [2024:RJ-JP:5126-DB] (9 of 12) [CW-5605/2023] law remedy as a matter of course only on the ground that the State did not file its counter-affidavit opposing the writ petition. Further, empty and self-defeating affidavits or statements of Government spokesmen by themselves do not form basis to grant any relief to a person in a public law remedy to which he is not otherwise entitled to in law. 53. In Raj Kumar Shivhare v. Directorate of Enforcement [MANU/SC/0249/2010 : (2010) 4 SCC 772] the Court was dealing with the issue whether the alternative statutory remedy available under the Foreign Exchange Management Act, 1999 can be bypassed and jurisdiction Under Article 226 of the Constitution could be invoked. After examining the scheme of the Act, the Court observed: (SCC p. 781, paras 31-32) 31. When a statutory forum is created by law for redressal of grievance and that too in a fiscal statute, a writ petition should not be entertained ignoring the statutory dispensation. In this case the High Court is a statutory forum of appeal on a question of law. That should not be abdicated and given a go-by by a litigant for invoking the forum of judicial review of the High Court under writ jurisdiction. The High Court, with great respect, fell into a manifest error by not appreciating this aspect of the matter. It has however dismissed the writ petition on the ground of lack of territorial jurisdiction. [2024:RJ-JP:5126-DB] (10 of 12) [CW-5605/2023] 3.2. No reason could be assigned by the Appellant's counsel to demonstrate why the appellate jurisdiction of the High Court Under Section 35 of FEMA does not provide an efficacious remedy. In fact there could hardly be any reason since the High Court itself is the appellate forum.” 11. The Hon’ble Supreme Court in the matter of State of Assam Vs. Barak Upatyaka D.U. Karmachari Sanstha, reported in (2009)5 SCC 694 in para-10 has held as under :- “10. A precedent is a judicial decision containing a principle, which forms an authoritative element termed as ratio decidendi. An interim order which does not finally and conclusively decide an issue cannot be a precedent. Any reasons assigned in support of such non-final interim order containing prima facie findings, are only tentative. Any interim directions issued on the basis of such prima facie findings are temporary arrangements to preserve the status quo till the matter is finally decided, to ensure that the matter does not become either infructuous or a fait accompli before the final hearing.” 12. The Hon’ble Supreme Court in the matter of Union of India (UOI) & Ors. Vs. Vicco Laboratories, reported in (2007) 13 SCC 270 in para-30 has held as under :- “30. Normally, the writ court should not interfere at the stage of issuance of show cause notice by the authorities. In such a [2024:RJ-JP:5126-DB] (11 of 12) [CW-5605/2023] case, the parties get ample opportunity to put forth their contentions before the concerned authorities and to satisfy the concerned authorities about the absence of case for proceeding against the person against whom the show cause notices have been issued. Abstinence from interference at the stage of issuance of show cause notice in order to relegate the parties to the proceedings before the concerned authorities is the normal rule. However, the said rule is not without exceptions. Where a Show Cause notice is issued either without jurisdiction or in an abuse of process of law, certainly in that case, the writ court would not hesitate to interfere even at the stage of issuance of show cause notice. The interference at the show cause notice stage should be rare and not in a routine manner. Mere assertion by the writ petitioner that notice was without jurisdiction and/or abuse of process of law would not suffice. It should be prima facie established to be so. Where factual adjudication would be necessary, interference is ruled out.” 13. Apparently, the notice issued to the petitioner under Section 148 of the Act of 1961 is only a show cause notice for which undoubtedly the petitioner is having remedy to file reply & raise all objections before the Assessing Authority where the proceedings are going on. Thus, considering the judgments passed by the Hon'ble Supreme Court, as referred above, we see no reason to interfere in this matter as the proceedings are still pending before the concerned Assessing Authority where the petitioner is certainly [2024:RJ-JP:5126-DB] (12 of 12) [CW-5605/2023] having liberty to file the reply and raise all his objections as available under the law. 14. So far as the interim passed by the Coordinate Bench at Principal Seat, Jodhpur in the matter of Krishna Kumar (supra) relied upon by counsel for the petitioner is concerned, the said order was passed as an interim measure, which has not decided the issue finally. In our considered view, since we are deciding the matter finally at the request of counsel for the petitioner himself, the said interim order passed by the Coordinate Bench does not help to the petitioner in view of the judgment passed by the Hon’ble Supreme Court in the matter of State of Assam (supra). 15. We are also of the view that in number of petitions filed under Article 226 of the Constitution of India challenge is made to mere issuance of the show cause notice and for seeking interim orders therein, which prolong the proceedings pending before the concerned authority and therefore in our considered view interference with regard to mere issuance of show cause notice should be rare and not in a routine manner. 16. In view of what we have discussed above, this writ petition is dismissed. However, the petitioner is at liberty to raise all objections, available under the law, before the Assessing Authority where the proceedings are going on. It is expected from the Assessing Authority to decide the same at the time of consideration on assessment itself. Pending application(s), if any, also stands disposed of. (VINOD KUMAR BHARWANI),J (INDERJEET SINGH),J SAHIL SONI /65 "