Income Tax: Sufficiency or Adequacy of Reasons for Re-Assessment cannot be decided through Writ Petition, rules Telangana HC [Read Order]

A division bench of the Telangana High Court has held that the sufficiency or adequacy of reasons for re-assessment under section 148 of the Income Tax Act, 1961 cannot be decided by invoking writ jurisdiction under Article 226 of the Constitution of India.

The petitioner, Mr. Pramod Kumar filed a writ petition before the division bench contending thatthe assessing officer was not justified in brushing aside the clarification provided by the petitioner and proceeding to issue notice under Section 148 of the Act.

The department, on the other hand, contended that at the stage of passing an order under Section 148A(d) of the Act, only a prima facie satisfaction is required to be arrived at by the assessing officer as to whether issuance of notice under Section 148 of the Act is called for or not. It was contended that at this stage, no detailed order or detailed proceedings are required.

Dismissing the writ petition, a bench of Chief Justice Ujjal Bhuyan and Justice C.V.Bhaskar Reddy held that “the present is not a fit case to interdict the proceedings at the very threshold. Reasons have been assigned by the assessing officer as to why the explanation given by the petitioner could not be accepted. Certainly, such reasons given have a nexus with the formation of the belief that income chargeable to tax has escaped assessment. It is equally trite that sufficiency or adequacy of reasons cannot begone into in a proceeding under Article 226 of the Constitution of India. That apart, we are at a stage prior to issuance of notice under Section 148 of the Act.”

To Read the full text of the Order CLICK HERE

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