[Income Tax] Breach Of Article 265 Cannot Be Alleged Based On Inconclusive Opinion By Assessing Officer: Bombay High Court

The Bombay High Court has ruled that a breach of Article 265 of the Constitution, which states that no tax shall be levied or collected without the authority of law, cannot be alleged based on a tentative or inconclusive opinion of an Assessing Officer (AO). The court observed that a mere show-cause notice or a draft assessment order proposing a tax demand does not constitute the final levy of tax. It is only a preliminary step in the adjudication process. The court held that a constitutional breach can only be claimed when a final and definitive order has been passed without legal backing. This judgment clarifies that the assessment process, which allows for objections and appeals, must be completed before a taxpayer can claim that a tax is being collected without the authority of law, thereby preventing premature challenges to the assessment process.