The Delhi High Court has held that the writ remedy under article 226 of the Indian Constitution cannot be invoked in tax matters as the Income Tax Act, 1961 provides a complete machinery for assessment/reassessment.
The petitioner, Gulmuhar Silk Pvt Ltd, has challenged an order passed under Section 148A(d) of the Income Tax Act, 1961 contending that the impugned order dated 28th March, 2022 is a non-speaking order which does not deal with the contentions raised by the Petitioner in reply to the impugned Show Cause Notice dated 7th 3. He states that the impugned order dated 28 March, 2022.
A division bench of the High Court comprising Mr. Justice Manmohan and Mr. Justice Dinesh Kumar Sharma observed that though it is the petitioner’s case that the impugned order is erroneous on facts, yet this Court is of the opinion that the petitioner would have ample opportunity during the course of proceedings before different statutory forums to show that the finding of fact arrived at was erroneous.
Dismissing the petition, the bench held that “Moreover, at this stage, no assessment order has been passed and it has only been observed that it is a fit case for issuance of notice under Section 148 of the Act. In fact, the Supreme Court in Commissioner of Income Tax and Ors. Vs. Chhabil Das Agarwal, (2014) 1 SCC 603 has held that as the Income Tax Act, 1961 provides complete machinery for assessment/reassessment of tax, assessee is not permitted to abandon that machinery and invoke jurisdiction of High Court under Article 226. Consequently, the present case does not fall under the exceptional grounds on which a writ petition is maintainable at the interim stage in tax matters,” the bench said.
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