S. 147: Writ petition to challenge a reassessment order should not be entertained

CIT vs. Chhabil Dass Agarwal (Supreme Court)

The AO issued a notice u/s 148 reopening the assessment and pursuant thereto passed a re-assessment order u/s 147. The assessee filed a Writ Petition in the High Court to challenge the said notice and re-assesasment order. The High Court entertained the Writ Petition and quashed the re-assessment order. On appeal by the department to the Supreme Court HELD reversing the High Court:

The Income-tax Act provides a complete machinery for the assessment/re-assessment of tax, imposition of penalty and for obtaining relief in respect of any improper orders passed by the Revenue Authorities. The assessee cannot be permitted to abandon that machinery and to invoke the jurisdiction of the High Court under Article 226 of the Constitution when he has adequate remedy open to him by an appeal to the Commissioner of Income-tax (Appeals). As the said statutory remedy is an effectual and efficacious one, the Writ Court ought not to have entertained the Writ Petition filed by the assessee.

Note: This principle of alternate remedy ought not to apply to a case where the AO passes a reassessment order without following the GKN Driveshafts 259 ITR 19 (SC) procedure of passing an order on objections and waiting 4 weeks thereafter as held in Allana Cold Storage 287 ITR 1 (Bom.), Kamlesh Sharma ITO 287 ITR 337 (Del) & other cases