The court emphasized the importance of exhausting alternative remedies under the Income Tax Act before seeking writ jurisdiction for assessment disputes.

JUDGMENT :

MURAHARI SRI RAMAN, J.

Questioning legality, impropriety and justness of demand raised to the tune of Rs.1,23,78,764/- pertaining to the Assessment Year 2020-21 [relevant to Financial Year 2019-20] by way of assessment framed under Section 147 read with 144 of the Income Tax Act, 1961, vide Order dated 26.03.2025 of Income Tax Officer, Ward-3(2), Purulia (Annexure-12), the petitioner has approached this Court insisting to invoke extraordinary jurisdiction under the provisions of Articles 226 and 227 of the Constitution of India, with the following prayer(s):

"Under the aforesaid circumstances it is prayed therefore that this Hon'ble Court may be graciously pleased to:

a. Admit the Writ Application;

b. Issue rule nisi calling upon the Opposite Party No.2 as to why Order of Assessment dated 26.03.2025 vide Annexure-12 shall not be quashed being illegal, arbitrary, unsustainable in law, gross violation of principles of natural justice and without jurisdiction.

c. If the Opposite Parties fails to show cause or show insufficient cause, make the rule absolute;

d. To issue further writ in the nature of mandamus or any other appropriate writ directing Opposite Parties to quash the Order of Assessment dated 26.03.2025 vide Annexure-12 in the ends of justice;

e. To pass such further order/orders, direction/directions, writ/writs as may be fit and proper;

f. To allow the writ petition;

And for this act of kindness the petitioner shall as in duty bound and ever pray." 

Pleadings in the writ petition:

2. The returns under Section 139 of the Income Tax Act, 1961 (“IT Act”, for short) furnished by the petitioner, proprietor of a concern carrying on its business in the name and style “Shri Krishna Enterprises” situated within the district of Angul, Odisha State, being subject to scrutiny, a notice under Section 148A(b) was issued based on information supplied by the DDIT (Inv)-2(3), Bhubaneswar that amount representing input tax credit under the Goods and Services Tax Act, 2017, availed qua the transactions with M/s. Utsav Enterprise and many others during the Financial Year 2019-20 is “inadmissible claim of expenses”. On obtaining approval of the Principal Commissioner of Income Tax, Asansol as required under Section 151 of the said Act, notice under Section 148 after observing statutory formality under Section 148A that certain amount has escaped assessment of income, was issued contemplating initiation of proceeding.

2.1. Responding to the notices under Section 142 of the IT Act directing for supply of information, though the petitioner citing bereavement in the family and serious health issues sought for adjournment(s), having imposed penalty vide Order dated 19.03.2025 under Section 272A(1), the opposite party No.2 rejected such prayer by issuing letter dated 21.03.2025.

2.2. The Assessing Officer framed assessment under Section 147 read with Section 144 of the IT Act vide Order dated 26.03.2025 by adding the amount stating it to be wrongful claim treating it to be bogus purchase transactions disclosed in the return of income and raised demand.

2.3. In the present writ petition said assessment order is assailed with the contention that, the petitioner had genuine transactions with M/s. Utsav Enterprises as there was physical movement of goods from the place of said supplier to the destination accompanied by e- waybills and supported by tax invoices and he is aggrieved by treating the transactions with other taxable persons, whose registration certificates under the Goods and Services Tax Act are alleged to have been cancelled, as bogus, before any information is received at his end.

2.4. It is requested that given an opportunity by extending time to furnish documents/evidences,