Unless they were argued on the merits in an appeal, the assessee cannot challenge reassessment orders through a petition: HC

In the case of Gopal Tukaram Bitode v. Income-tax officer [2023]

A co-operative credit society was the subject of a search. A particular sum that the assessee had placed in his account with the cooperative society during the pertinent assessment year was discovered during the search operation. Assuming that the income subject to tax has fled, the Assessing Officer (AO) issued notice in accordance with section 148 after receiving the required permissions.

An assessment order was made as a result of the assessee’s failure to explain the origin of the cash deposit, and section 271(1) (c) penalties were subsequently imposed.

The assessee filed a writ suit with the Bombay High Court, expressing his resentment at the decision and arguing that section 153C governs the jurisdiction.

The Assessee declined to challenge the Tribunal’s authority to reopen the Assessment according to Section 153C, the Tribunal found. By replying to the notification and disputing it, the assessee consented to the assessment orders being implemented.

The outcome would have been different if the assessee had objected to the notice when it was issued. By replying to the notice, the assessee did, however, provide the authorities permission to continue in accordance with section 147. It is only now that the claim that the reopening was outside of jurisdiction is being made, following the passage of the assessment orders.

There is no disputing the idea that extra-ordinary jurisdiction under article 226 of the Indian Constitution may be used if the contested exercise lacks jurisdiction. Article 226 jurisdiction could not be used, nonetheless, where a valid legislative remedy of appeal was available.