Facts of the Case

The petitioner filed a writ petition before the Delhi High Court challenging a notice dated 19 September 2011 issued by the Assessing Officer. The impugned notice recorded the prima facie opinion of the Assessing Officer and called upon the assessee to furnish its comments and objections in relation to the issues identified during the assessment proceedings.

The petitioner approached the High Court at a preliminary stage, seeking interference with the assessment process before the Assessing Officer had concluded the proceedings or adjudicated upon the objections that could be raised by the assessee.

Issues Involved

1.      Whether the High Court should exercise its writ jurisdiction to interfere with assessment proceedings at the stage of a preliminary notice issued by the Assessing Officer.

2.      Whether objections raised by the assessee against the notice should first be adjudicated by the Assessing Officer before judicial intervention is sought.

3.      Whether the notice recording only a prima facie opinion warrants interference under Article 226 of the Constitution of India.

Petitioner’s Arguments

•         The petitioner challenged the notice dated 19 September 2011 issued by the Assessing Officer.

•         It was contended that the notice and the proceedings initiated pursuant thereto were liable to be interfered with by the High Court.

•         The petitioner sought judicial intervention at the threshold stage of assessment proceedings.

Respondent’s Arguments

•         The respondent contended that the notice merely recorded a prima facie opinion of the Assessing Officer.

•         The assessee had been afforded an opportunity to submit comments and objections before the Assessing Officer.

•         The Assessing Officer was competent to examine all objections, determine their relevance and evidentiary value, and adjudicate the issues in accordance with law.

•         Therefore, no interference by the High Court was warranted at the ongoing assessment stage 

Court Findings

The Delhi High Court held that it would neither be proper nor correct to interfere with or interdict the assessment proceedings at such a preliminary stage.

The Court observed that:

•         The impugned notice merely reflected a prima facie opinion of the Assessing Officer.

•         The petitioner was at liberty to raise all objections before the Assessing Officer.

•         The Assessing Officer was competent to consider and adjudicate all objections raised by the assessee.

•         Questions relating to reliance upon documents, relevance of material and weight to be attached thereto could appropriately be examined by the Assessing Officer.

•         Judicial intervention at the stage of issuance of a preliminary notice would be premature. 

Court Order

The writ petition was dismissed.

The Court declined to interfere with the assessment proceedings and directed that all objections raised by the petitioner be considered by the Assessing Officer in accordance with law.

Important Clarification

The Court specifically clarified that it had not expressed any opinion on the merits of the controversy and that all issues remained open for consideration by the Assessing Officer.

Sections Involved

•         Article 226 of the Constitution of India

•         Provisions of the Income-tax Act, 1961 governing assessment proceedings (specific section not mentioned in the available order)

Link to download the order –https://delhihighcourt.nic.in/app/case_number_pdf/2011:DHC:16066-DB/SKN17102011CW75362011_153748.pdf

 

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