A writ petition is not maintainable against a notice issued under Section 263 of the Income-tax Act, 1961, as the assessee has an adequate alternative remedy by way of making a representation to the Commissioner.

AJOY NATH RAY, J.

( 1 ) DR. Pal, appearing for the assessee, moves for Rule and interim order in respect of a notice dated December 24, 1998, issued by the Commissioner of Income-tax (Revision) under Section 265 of the Income-tax Act, 1961, seeking to revise the assessee writ petitioner's assessment in regard to the assessment year 1994-95.

( 2 ) MR. Agarwal, appearing for the respondents, has submitted that the writ application is against a mere notice and thus the writ application should not be entertained and it should be dismissed. He has submitted that it is not a case of granting or refusing an interim order, but a case deserving dismissal in limine.

( 3 ) THE arguments of the parties, therefore, have to be considered in some detail.

( 4 ) DR. Pal placed the impugned notice (page 69 of the writ petition) and drew my attention to the terms of Section 263. That section need not be set out, as it is easily available. He submitted that the power to revise is based upon two conditions precedent and those are that the Commissioner must be satisfied that the assessment order is erroneous and that it is also prejudicial to the interests of the Revenue.

( 5 ) DR. Pal submitted that there are cases showing that the writ court can interfere even at the preliminary stage where only notice has been issued. He gave the case of Jeewanlal (1929) Ltd. v. Addl CIT, And drew my attention to the passage at page 412. In that case, Sabya-sachi Mukharji J. , as his Lordship then was, passed an order even as against the notice under Section 263 opining that the order was passed by the Commissioner "at the suggestion of the audit department of the Revenue and not by the Additional Commissioner in exercise of his quasi judicial discretion. "

( 6 ) THE notice was thus quashed. On the basis of this case, Dr. Pal submitted that in the present impugned notice also a mention is made to the auditor's report.

( 7 ) THE Commissioner has mentioned that the assessee gave interest-free loans to two of its named subsidiaries, for the respective sums of Rs. 3,355. 96 and Rs. 1,629. 71 (figures in rupees lakhs ). He has also remarked that the assessee took loans from different financial institutions to the extent of Rs. 19,323. 82 (same unit) and paid huge interest. These were seen by the Commissioner from the auditor's remarks.

( 8 ) DR. Pal and Mr. Agarwal have waged battle before me even as to whether these auditors are the company's auditors or the Department's auditors. Be that as it may, the note of the company's auditor in regard to the giving of interest-free loans is before me even in the annexures to the petition.

( 9 ) ON the basis of these notes from the audit, the Commissioner of Income-tax has opined that the Assessing Officer should have made enquiries about the existence of any possible nexus between the borrowed fund and the interest-free advances. Thus, he invoked his jurisdiction under Section 263.

( 10 ) ON the facts as apparent from the notice itself, it is impossible to opine in any view of the matter that the Commissioner did not apply his own mind or exercise his own jurisdiction.

( 11 ) DR. Pal then gave me the case of B. K. Roy P. Ltd. v. CIT. From the passage placed by him, which appears at page 505, it appears that the court opined that the existence of an alternative remedy in a case like the one before the court was meaningless, because the Commissioner, even if allowed to exercise his jurisdiction, would be bound by a judgment of the Allahabad High Court ; whether the decision of the Allahabad High Court was to be applied or not, could be decided only by the court and not by the Commissioner. Then Suhas Chandra Sen J. , as his Lordship then was, said as follows (page 505) :"although as a matter of rule, I do not intervene at this stage of issuance of a notice under Section 263, I am of the view that in a case like this there is no adequate alternative remedy for the petitioner. "

( 12 ) DR. Pal also relied on the well-k

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