Case Note & Summary
The appellant, M/s Kothari Metals, filed a writ petition challenging a notice under Section 148 of the Income Tax Act, 1961 for reopening assessment for the assessment year 2006-07. The appellant's return had been accepted under Section 143(1) on 14.06.2007. On 28.03.2013, a notice under Section 148 was issued. The appellant requested reasons for reopening and asked that the earlier return be treated as filed in response. The Assessing Officer did not furnish reasons but proceeded with reassessment, issuing a questionnaire under Section 142(1). The questionnaire indicated that reopening was based on a statement recorded from some other person, which was not provided to the appellant. The appellant contended that non-furnishing of reasons and the statement violated principles of natural justice. The learned Single Judge dismissed the writ petition on the ground of availability of alternative remedy, as a reassessment order had been passed on 31.01.2014. In appeal, the Division Bench held that when there is a violation of principles of natural justice, the writ petition is maintainable despite alternative remedy. The court set aside the Single Judge's order and directed the Assessing Officer to furnish the reasons for reopening and the statement relied upon to the appellant within two weeks. The appellant may file objections within two weeks thereafter, and the Assessing Officer shall consider them and pass a fresh assessment order in accordance with law. The appeal was allowed.
Headnote
A) Income Tax - Reopening of Assessment - Section 148 of Income Tax Act, 1961 - Violation of Natural Justice - The assessee challenged the notice under Section 148 for reopening assessment for AY 2006-07 on the ground that reasons for reopening were not furnished and a statement recorded from a third party was not provided, violating principles of natural justice. The Single Judge dismissed the writ petition on the ground of alternative remedy. The Division Bench held that when there is a violation of principles of natural justice, the writ petition is maintainable despite alternative remedy. The appeal was allowed, the order of the Single Judge was set aside, and the Assessing Officer was directed to furnish reasons and the statement to the assessee within two weeks, and thereafter the assessee may file objections which shall be considered before passing a fresh assessment order. (Paras 1-6) B) Income Tax - Alternative Remedy - Maintainability of Writ Petition - Section 148 of Income Tax Act, 1961 - The Single Judge dismissed the writ petition on the ground of availability of alternative remedy. The Division Bench held that when there is a violation of principles of natural justice, the writ petition is maintainable despite alternative remedy. The appeal was allowed and the matter was remitted back to the Assessing Officer for fresh consideration after furnishing reasons and the statement. (Paras 4-6)
Issue of Consideration
Whether the writ petition challenging the notice under Section 148 of the Income Tax Act, 1961 was liable to be dismissed on the ground of availability of alternative remedy when the Assessing Officer had not furnished reasons for reopening and had not provided the statement recorded from a third party, thereby violating principles of natural justice.
Final Decision
The appeal is allowed. The order of the learned Single Judge dated 11.12.2014 in W.P.No.14670/2014 is set aside. The Assessing Officer is directed to furnish the reasons for reopening and the statement relied upon to the appellant within two weeks from today. The appellant may file objections within two weeks thereafter. The Assessing Officer shall consider the objections and pass a fresh assessment order in accordance with law.
Law Points
- Reopening of assessment under Section 148 of Income Tax Act
- 1961
- Principles of natural justice
- Non-furnishing of reasons for reopening
- Non-furnishing of statement relied upon
- Alternative remedy not a bar when fundamental rights violated
