NEERAJ MANDLOI Vs. ASSISTANT COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) Challenge in this writ petition under Art. 226 of the Constitution of India is made to a reassessment order dated 30.12.2016 passed by the Income Tax authorities in proceedings held after a notice was issued under Sec. 148 of the Income Tax Act. As the writ petition has been filed directly before this Court challenging the order of assessment without taking recourse to the remedy of appeal provided i.e. First Appeal to the Commissioner (Appeals) and thereafter further appeal to the Income Tax Appellate Tribunal and finally an appeal under Sec. 260-A to this Court, a preliminary objection has been raised by Shri Sanjay Lal, learned counsel for the Revenue to say that this writ petition is not maintainable and the petitioner should be relegated to take recourse to the remedy available of filing an appeal under the three tier appellate, statutory remedy available to the petitioner. However, Shri Sumit Nema argues that in this case the proceedings initiated by issuing notice under Sec. 148. The manner of assessment undertaken and the basis for assessment are all perverse, illegal and impermissible in law and, therefore, exercise of extraordinary jurisdiction is permissible.

(2.) Shri Sumit Nema, learned counsel invites our attention to certain documents seized in a search and seizure operation available at page 309 of the paper book and argued that the entire proceedings for reassessment has been initiated on the basis of certain entries made in these loose papers which has no evidentiary value and, therefore, in view of the recent judgment of the Supreme Court in the case of Common Cause (A Registered Society) Vs. Union of India, [2017] 77 Taxman 245 (SC), the assessment undertaken on the basis of such inadmissible evidence is clearly unsustainable. Further reference is made to another judgment of the Supreme Court in the case of Jeans Knit (P.) Ltd. Vs. Deputy Commissioner of Income Tax, Bangalore, [2017] 77 Taxman 176 (SC), to say that the proceedings initiated in this case under Sec. 147 is unsustainable and, therefore, interference can be made in the writ petition.

(3.) Shri Sumit Nema, learned counsel further invites our attention to a pending writ petition before this Court being W.P. No.10241/2016 (Malay Shrivastava Vs. The Deputy Commissioner of Income Tax) and argues that in the said case which arises out of the same search and seizure operation, the assessment order is under challenge and in the petition the notice of demand issued after the assessment has been stayed. Accordingly, Shri Sumit Nema argues that the petition can be entertained. However, Shri Sanjay Lal, learned counsel invites our attention to the judgment of the Supreme Court in the case of Commissioner of Income Tax Vs. Vijaybhai N. Chandrani, (2013), 261 CTR 0225 and the judgment of Madras High Court in the case of Joint Commissioner of Income Tax Vs. Kalanithi Maran, (2014) 89 CCH Page 149 to say that the writ petition is not maintainable.