25 January 2017
Writ petition is maintainable against initiation of reassessment
proceedings – Supreme Court
Background
Supreme Court’s decision
Recently, the Supreme Court in the case of Jeans
1
Knit Private Limited (the taxpayer) held that a writ
petition challenging the initiation of reassessment
proceedings by issuing notices under Section 148 of
the Income-tax Act, 1961 (the Act) is maintainable
before the High Court. The common issue in the
batch of appeals was with regard to maintainability
of writ jurisdiction under Article 226 of the
Constitution of India challenging the issuance of
notice under Section 148 of the Act.

The view taken by High Courts in the batch of
appeals dismissing the writ petition as not
maintainable is contrary to the law laid down by
the Supreme Court in the case of Calcutta
2
Discount .

The rulings of High Courts are set aside, and the
cases are remitted to the High Courts to decide
the same on merits.

The High Courts are directed to examine each
case on its merits keeping in view the scope of
judicial review while entertaining such matters.

The principle laid down in case of Chhabil Dass
3
Agarwal does not apply to the facts of the present
cases.

The stay of reassessment granted during the
pendency of appeal shall continue till the disposal
of writ petitions before the High Courts.
Facts of the case

The Assessing Officer (AO) recording reasons
to believe that income of the taxpayer had
escaped assessment, issued notice under
Section 148 of the Act for reopening the
assessment.

The taxpayers filed a writ petition before High
Court challenging the notice issued under
Section 148 of the Act.

The High Courts dismissed the writ petitions
preferred by the taxpayers challenging the
issuance of notice under Section 148 of the Act
as not maintainable.
Our comments
The issue as to whether a writ jurisdiction under Article
226 of the Constitution can be invoked challenging the
correctness or otherwise of notices issued under
Section 148 of the Act has been a subject matter of
litigation before the Courts.
______________
________________________
1
Jeans Knit Private Limited v. DCIT (Civil Appeal No 11189/2016) along
with a batch of appeals - taxsutra.com
2
3
Calcutta Discount Limited Company v. ITO [1961] 41 ITR 191 (SC)
Chhabil Dass Agarwal v. CIT [2013] 357 ITR 357 (SC)
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International”), a Swiss entity. All rights reserved.
In the case of Chhabil Das Agarwal, the writ petition
was filed challenging the ex parte assessment order
post issuance of notice under Section 148. The
Supreme Court held that a High Court should not
ordinarily entertain a writ petition if there is an
adequate efficacious alternative remedy available to
the petitioner.
The Supreme Court in the present ruling has held
that the principle laid down in Chhabil Dass Agarwal
does not apply to the instant case wherein the writ
jurisdiction was invoked challenging correctness or
otherwise of the reassessment notices issued under
Section 148 of the Act.
The Madras High Court in the case of Kalanithi
4
Maran held that the statutory hierarchy of remedy
of appeals needs to be exhausted before seeking
relief by invoking writ jurisdiction of the High Court.
The Karnataka High Court in the case of Dell India
held that availability of alternate remedy under the
Act would not be a bar for the High Court to
examine a notice issued under Section 148 of the
Act if it is challenged on the ground of no
jurisdiction.
5
_______________
4
5
Kalanithi Maran v. JCIT [2014] 270 CTR 296 (Mad)
Dell India (P.) Ltd. v. JCIT [2015] 57 taxmann.com 332 (Kar)
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