IMPORTANT POINT
The court upheld the validity of reassessment orders under the Income Tax Act, emphasizing compliance with procedural requirements and the significance of genuine transactions in tax assessments.

JUDGMENT :

Heard Mr. A. Jain, the learned counsel appearing on behalf of the Petitioners in both the writ petitions and Mr. S. C. Keyal, the learned Standing counsel appearing on behalf of the Income Tax Department.

2. Both the writ petitions are taken up together taking into consideration the similarity of the issues and the order passed by this Court on 09.11.2022 in WP(C) No.7014/2022 whereby both the writ petitions were tagged along together.

3. The Petitioners in both the writ petitions have assailed the orders passed under Clause (d) of Section 148A of the Income Tax Act, 1961 (for short ‘the Act of 1961’) whereby the Respondent No.3 in both the writ proceedings have passed orders opining that the income chargeable to tax had escaped assessment and thereby attracting Section 147 of the Act of 1961 and is a fit case for issuance of notice under Section 148 of the said Act of 1961.

4. It is relevant herein to observe that in normal course of events when a notice is issued under Section 148 of the Act of 1961, the course available to an assessee is to file the returns and on the basis thereof, the fresh assessment proceedings are carried out. The assessee if so aggrieved, can prefer appeal against such assessment order. However, in the present case, the condition precedent to issue the notice under Section 148 of the Act of 1961 have been put to challenge on the ground that the mandate of Section 148A of the Act of 1961 was not complied with. Therefore, the issue involved in the instant proceedings pertains to as to whether the exercise of jurisdiction by the Respondent No.3 in both the proceedings was done in consonance with the provisions of Section 148A of the Act of 1961.

5. At this stage, this Court finds it relevant to take note of the scope of jurisdiction under Article 226 of the Constitution of India on the basis of the well settled principles of law enunciated by the Supreme Court. In the case of Godrej Sara Lee Vs. Excise and Taxation Officer cum Assessing Authority and Others reported in (2023) 109 GSTR 402, the Supreme Court had the occasion of dealing with the circumstances as to when a writ Court can exercise jurisdiction when there is an alternative remedy available. It was opined by the Supreme Court in the said judgment that the jurisdiction under Article 226 of the Constitution can be exercised under the following circumstances:

(a) Where the writ petition seeks enforcement of any of the fundamental rights;

(b) Where there is violation of principles of natural justice;

(c) Where the order or the proceedings are wholly without jurisdiction; or

(d) Where the vires of an Act is challenged; or

(e) Where the controversy is purely a legal one and it does not involve disputed questions of facts but only questions of law.

6. It is also apposite herein to take note of that in a subsequent judgment of the Supreme Court in the case of PHR Invent Educational Society Vs. UCO Bank and Others reported in (2024) SCC OnLine SC 528, the Supreme Court opined that the High Court would not ordinarily entertain a writ petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person. It was opined that this particular Rule applies with great rigour in matters involving recovery of taxes, cess, fees, and others types of public money and dues of banks and other financial institutions. The Supreme Court further opined that though the powers of the High Court under Article 226 of the Constitution are of widest amplitude, still the Courts cannot be oblivious of the rules of self-imposed restraint evolved by the Courts. It was opined that though the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, still it is difficult to fathom any reason why the High Court should entertain a writ petition filed under Article 226 of the Constitution.

7. In view of the above well settled principles of law, the question which needs to be looked into in the instant proceedings is