In a recent judgement, the Telangana High Court dismissed the petition challenging re-assessment against HSBC Holdings on the availability of alternative remedies under the Income Tax Act, 1961.
The Commissioner of Income Tax believed that its income chargeable to tax for the assessment year 2011-12 has escaped assessment and proposed to assess/reassess the income of the petitioner for the said assessment year.
The petitioner was called upon to file a return of income in the prescribed form for the said assessment year. The second impugned notice dated 24.10.2018 has been issued by the Deputy Commissioner of Income Tax–I, International Taxation, i.e., first respondent under Section 142(1) of the Act, whereby the petitioner has been called upon to furnish the information/details as well as documents in connection with the assessment proceedings for the assessment year 2011-12.
The petitioner had filed a return of income on 17.04.2018 and vide its letter dated 18.04.2018 requested the first respondent to provide the reasons recorded for reopening the assessment proceeding. The first respondent rejected the objections raised by the petitioner.
However, because of certain mistakes which occurred in the order dated 31.03.2016 petitioner filed an application for rectification under Section 154 of the Act on 27.04.2016. The first respondent thereafter issued a rectification order on 13.04.2017 carrying out the corrections pointed out by the petitioner.
It was argued that the petitioner had disclosed fully and truly all material facts necessary for the completion of the assessment. Therefore, the assessing officer could not have assumed jurisdiction to reopen a concluded assessment and reassessment.
Further contended that reopening has taken place because of the view taken or the opinion formed by the assessing officer in the assessment proceedings of the petitioner for a subsequent assessment year, namely, the assessment year 2014-15.
The first respondent passed an assessment order on 06.08.2019 under Section 144 read with Section 147 of the Income Tax Act. Such draft assessment order is subject to the provisions of Section 144C of the Income Tax Act.
It was evident that an elaborate procedure is laid down in Section 144C of the Income Tax Act. The assessing officer is under a mandate to forward a copy of the draft order to the eligible assessee, whereafter the eligible assessee would have the opportunity to file an objection. The Dispute Resolution Panel has also the liberty to make further enquiries if it considers necessary.
It would be just and proper if the procedure prescribed under the statute is followed, in which event, the petitioner would have all the opportunities and remedies to present its case.
A two-judge bench comprising Chief Justice Ujjal Bhuyan and Justice Surepalli Nanda viewed that a writ Court would not ordinarily invoke its jurisdiction when an aggrieved party has adequate and efficacious remedy provided under the statute. The Court refused to entertain the writ petition on the point of statutory remedy available to the petitioner.
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