Income Tax Act- Writ Petition Can Be Entertained To Examine If Conditions To Issue Section 148 Notice Are Satisfied: SC
The Supreme Court while setting aside the order of the Punjab and Haryana High Court observed that the writ petition can be entertained to examine if the conditions to issue a notice under Section 148 of the Income Tax Act, 1961 are satisfied.
Earlier, the High Court had dismissed the writ petition filed by the assessee against the Section 148A notice for reopening the assessment.
The two-Judge Bench of Justice Sanjiv Khanna and Justice M.M. Sundresh said, “We with the petitioner that the impugned judgment rejecting the writ petition on the ground of alternative remedy does not take into consideration several judgments of this Court, on the jurisdiction of High Court, as writ petitions have been entertained to be examined whether the jurisdiction preconditions for issue of notice under Section 148 of the Income Tax Act, 1961 is satisfied.”
The Apex Court further asserted that the provisions of reopening under the Income Tax Act, 1961 have undergone an amendment by the Finance Act, 2021, and consequently the matter would require a deeper and in-depth consideration keeping in view the earlier case law.
Advocate Rana Gurtej Singh represented the petitioner.
In this case, the petitioner received a notice under Section 148A(b) of the Income Tax Act and the details of the information leading to the issuance of the same were provided. The petitioner objected to this and the order that was passed under Section 148A(d).
The High Court in this matter ordered that where the proceedings have not been concluded by the statutory authority, the Writ Court should not interfere at such a premature stage. The correctness of such an order was challenged before the Apex Court.
The Supreme Court noted, “Accordingly, we set aside the observations made by the High Court in the impugned judgment observing that the writ petition would not be maintainable in view of the alternative remedy, clarify that this issue would be examined in depth by the High Court if and when it arise for consideration.”
However, the Court also clarified that it deem it open to examine the issue in the present case after having examined the notice under Section 148A (b) including the annexure thereto, the reply filed by the petitioner, and the order under Section 148A (d) of the Income Tax Act, 1961.
Accordingly, the Court dismissed the special leave petition.
Cause Title- Red Chilli International Sales v. Income Tax Officer & Anr.