The Income-tax Officer cannot issue a notice under Section 148 of the Income-tax Act, 1961, after four years from the end of the relevant assessment year unless he has reason to believe that there has been an escapement of income to tax in the assessment order and that the assessee has failed to disclose fully and truly all material facts necessary for assessment of his income.

Y.R. Meena, J.

1. BY this writ petition, the writ petitioner has challenged the notice under Section 148 of the Income-tax Act, 1961 (hereinafter referred to as the "said Act"), by respondent No. 1 and has prayed that the notice be quashed and no steps be taken further for reassessment in pursuance of the impugned notice dated September 30, 1997, issued under Section 148 of the said Act.

2. THE writ petitioner is a public limited company and derives its income from the business of growing and manufacturing tea in India, manufacturing chemicals and fertilisers and manufacturing plywoood, shipping and warehousing. For the assessment year 1990-91, the accounting period ending on March 31, 1990, the petitioner filed a return along with the tax audit report and claimed deduction under Section 32AB(5) of the said Act. THE assessment was completed on March 22, 1993, under Section 143(3) of the said Act and the Assessing Officer determined the income chargeable to tax under the Act from growing and manufacturing of tea in India being 40 per cent, at Rs. 6,47,84,258. In computing the said taxable income from growing and manufacturing of tea in India, the deduction of Rs. 1,59,92,021 was allowed, being 40 per cent, of Rs. 3,99,80,053.

After completion of the assessment, the Assessing Officer had issued notice under Section 148 of the said Act, read with Section 147, being annexure B to the petition, dated September 30, 1997, asking the petitioner that its income had escaped as deduction under Section 32AB(5) allowed was more than the amount permissible under Section 32AB of the said Act.

3. THE petitioner has challenged this notice on the ground that the notice has been issued after four years from the end of the relevant assessment year. Therefore, before issue of notice, the Income-tax Officer should satisfy whether any income has escaped and that the assessee has failed to disclose fully and truly all material facts necessary for the assessment.

4. COUNSEL for the petitioner submits that all materials required for assessment of income were disclosed fully and truly by the assessee. Therefore, even if some income had escaped, the materials being fully and truly disclosed, the Income-tax Officer had no jurisdiction to issue notice under Section 148 of the said Act.

The case of the Department is that the assessee has claimed the deduction under Section 32AB of the Act to the tune of Rs. 3,99,80,053. The Assessing Officer has wrongly allowed the claim. Therefore, income had escaped and there was justification for issuing notice under Section 148 of the said Act. If the assessee has any grievance then it can submit its case before the Assessing Officer in reassessment proceedings and even if it has any further grievance, the assessee can challenge that order before the Appellate Commissioner and thereafter before the Tribunal. Therefore, there is an alternative remedy and this court should not interfere at the notice stage.

5. BEFORE I proceed, I would like to give some relevant facts to see whether deduction is allowed more than admissible under Section 32AB of the Act. Counsel for the petitioner has furnished the following chart : Jay Shree Tea And Industries Ltd. 10, Camac Street, Calcutta-700 017. Statement of income from tea growing and manufacturing business and deduction allowed under Section 32AB of the Income-tax Act, 1961, for the assessment year 1990-91 as per the assessment order. Composite income from tea as per asst. order Deduction under section 32AB considered in the asst. year from composite tea income Composite tea income before deduction under section 32AB 40 per cent. of the tea income char-gable to income-tax before deduction under section 32AB Deduction allowable under section 32AB at 20 per cent. Net income chargeable to tax Counsel for the respondent also filed a chart indicating the total income deduction allowed under Section 32AB as per the Act and excess deduction allowed which reads as under : JAYSHREE