Chhattisgarh High Court Dismisses Writ Petition Against Reassessment Notice Where Statutory Appeal Was Already Pending Before CIT
Background and Context
The Chhattisgarh High Court, in the matter of Disha Education Society Vs CIT, dismissed a writ petition filed by the assessee challenging a reassessment notice. The court declined to exercise its extraordinary writ jurisdiction, primarily because a statutory appellate remedy had already been invoked by the assessee and an appeal was pending before the Commissioner of Income-Tax at the time of adjudication.
The case offers a significant reminder of a fundamental principle governing the exercise of writ jurisdiction under Article 226 of the Constitution — that where an assessee has already elected and pursued an efficacious statutory remedy, the High Court will ordinarily decline to interfere in the same dispute through the extraordinary writ route.
Facts of the Case
The assessee, Disha Education Society, is a registered society engaged in educational activities and running colleges. For Assessment Year 2008-09, the assessee had filed its return of income on 25.11.2008, declaring nil total income. A regular scrutiny assessment under Section 143(3) of the Income-Tax Act, 1961 was completed on 20.12.2010, and the assessing officer accepted the declared nil income.
Matters rested there until 11.03.2015, when the Deputy Commissioner of Income-Tax (Exemption), Raipur, issued a notice under Section 148 of the Income-Tax Act, 1961, on the ground that income chargeable to tax had escaped assessment for AY 2008-09.
Upon receiving the Section 148 notice, the assessee submitted a request seeking the reasons recorded under Section 148(2) along with the approval granted by the appropriate authority. The respondent authorities duly supplied a copy of the reasons recorded under Section 147 of the Income-Tax Act, 1961 on 25.06.2015, accompanied by a communication from the Joint Commissioner of Income-Tax.
The assessee filed detailed objections on 12.08.2015, raising the following grounds:
- The Assessing Authority lacked jurisdiction to reopen the concluded assessment.
- The notice had been issued beyond the period of four years from the end of the relevant assessment year and was therefore barred by limitation.
- The proposed reassessment was founded on nothing more than a change of opinion, without any fresh or tangible material to support a reason to believe that income had escaped assessment.
The respondent authorities passed an order on 02.03.2016 disposing of all the objections raised by the assessee.
Proceedings During Pendency of the Writ Petition
The assessee, aggrieved by the issuance of the Section 148 notice and the rejection of its jurisdictional objections, approached the Chhattisgarh High Court by way of a writ petition seeking the following reliefs:
- Calling for the entire case records for the court's perusal.
- Quashing of the notice dated 11.03.2015 under
Section 148as being patently illegal and contrary to the statute. - A declaration that the reassessment proceedings initiated under
Section 147/Section 148were without jurisdiction, being time-barred and based on a mere change of opinion. - Interim stay of all proceedings arising out of the
Section 148notice pending disposal of the petition.
However, while the writ petition was still pending, a reassessment order for AY 2008-09 was passed by the Revenue on 23.03.2016. The assessee did not amend the writ petition to also challenge this reassessment order. Instead, the assessee chose to prefer a statutory appeal before the Commissioner of Income-Tax under Section 246A(1) of the Income-Tax Act, 1961 on 12.04.2016, challenging the reassessment order. This appeal was admitted and was pending consideration. The reassessment order was also placed on record in the writ proceedings as Annexure-R/1 along with the return filed on 07.09.2016.