Reassessment proceedings under the Income Tax Act cannot be challenged in writ jurisdiction when an alternate remedy of appeal exists, and objections not raised during assessment cannot be introduced later.

JUDGMENT :

(Jitendra Jain, J.) :

1. By this petition under Article 226 of the Constitution of India the petitioner challenges re-assessment order passed under Section 147 read with Section 144B of the Income Tax Act (hereinafter referred to as “the Act”) and notice of demand both dated 29 March 2022 for the assessment year 2015-16.

Brief facts:

2. The petitioner is an individual and has filed his original return of income for the Assessment year 2015-16 on 30 October 2015. The said return of income was selected for scrutiny and a notice under Section 142 (1) of the Act dated 21 June 2017 was issued seeking details mentioned in annexure to the letter. The petitioner has enclosed undated replies to this notice in the present petition. On 5 October 2017, an assessment order under Section 143(3) of the said Act came to be passed accepting the return of income. In the said return, there is no discussion of any issue except stating that on change of the officer, the Chartered Accountant of the petitioner attended from time to time and filed various details.

3. The replies said to have been filed during the assessment proceedings do not bear any acknowledgment of the same having filed with revenue during the assessment proceedings.

4. Post conclusion of the assessment proceedings, the petitioner has filed letters with the assessing officer on 17 August 2018 and 27 August 2018, which are stated to be a reply to the audit objection of the revenue on deduction under Section 54F of the Act and on income from house property.

5. On 28 March 2021, the petitioner was served with a notice under Section 148 of the Act proposing to reassess the income for the assessment year 2015-16. On 30 June 2021, the petitioner was supplied with reasons for reopening. Briefly, the reasons record that deduction under Section 54F must be restricted to the cost of acquisition of petitioner’s share in the property. It further states that no rental income has been offered for tax under Section 23 of the Act.

6. The petitioner, vide letter dated 13 July 2021, objected to the reopening. In the objection concerning the issue of deduction under Section 54F, the petitioner has only stated that this issue was verified during the assessment proceedings and an opinion was formed, and therefore, it is a case of change of opinion. In the said objection, there is no reference to any query having been raised by the assessing officer during the assessment proceedings and replies filed by the petitioner during the assessment proceedings. On the issue of taxation of rental income, there is no averment that this issue was examined during the assessment proceedings. The only objection is that the said issue was raised at the behest of the audit party, and hence, it does not constitute “reasons to believe” by the assessing officer. The objection also refers to re-assessment proceedings being initiated at the behest of the audit objections.

7. On 25 March 2022, an order rejecting the above objection came to be passed. Thereafter, on 29 March 2022, an assessment order under Section 147 read with Section 144 B came to be passed, making additions /disallowance on account of “income from house property” amounting to Rs.46,85,625/- and disallowance of deduction under Section 54F to the extent of Rs.3,86,95,545/-. The income was reassessed at Rs.10,86,36,149/- and a demand of Rs.2,65,22,019/- came to be raised.

8. Instead of filing an appeal, the petitioner approached this Court through the present petition on 27 April 2022, challenging the reassessment order and notice of demand dated 29 March 2022. On 20 September 2022, this Court granted ad-interim relief, which continu