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1996 Supreme(Ori) 248
IN THE HIGH COURT OF ORISSA
Susanta Chatterji, Dipak Misra, JJ.
BANCHHANIDHI DAS - APPELLANT
Versus
INCOME TAX OFFICER AND OTHERS - RESPONDENT
Original Jurisdiction Case No. 8216 of 1996
Decided On : 25-09-1996
B.K. Mohanti, for the Appellant; P.K. Misra, for the Respondent
The main legal point established in the judgment is that the recorded reasons for the notice u/s 148 must be valid, and the court may refrain from considering the merits of the case in a writ jurisdiction where the issuance of notice u/s 148 is challenged.
Headnote:
Income Tax Act - Reopening of Assessment - The court held that the issuance of notice u/s 148 to reopen the matter was not impermissible under law, as the recorded reasons for the notice were found to be valid. The court refrained from considering the merits of the case and disposed of the writ application.
Fact of the Case:
The petitioner, a retired Development Officer, challenged the notice issued u/s 148 of the Income Tax Act to reopen the assessment, alleging that it was unwarranted and without satisfaction of pre-conditions.
Finding of the Court:
The court found that the recorded reasons for the notice u/s 148 were valid and not impermissible under law. It refrained from making any observation on the merits of the case, as it was still premature, and disposed of the writ application.
Issues: The issues involved the validity of the notice u/s 148 to reopen the assessment, the satisfaction of pre-conditions, and the permissibility of the notice under law.
Ratio Decidendi: The court held that the recorded reasons for the notice u/s 148 were valid, and the issuance of the notice was not impermissible under law. It refrained from making any observation on the merits of the case, as it was still premature.
Final Decision: The court disposed of the writ application, stating that the issuance of notice u/s 148 was not bad in law and directed the Income Tax authority to give the petitioner assessee reasonable opportunities to raise objections and cooperate for the assessment.
JUDGMENT :
Susanta Chatterji, J. - As suggested and agreed by Mr. B.K. Mohanti, learned counsel appearing for the petitioner, and Chowdhury P.K. Misra, appearing for the Income Tax Department, we take up this matter for final disposal.
2. The petitioner, a retired Development Officer of the Life Insurance Corporation of India, Bhadrak, has filed the present writ petition challenging, inter alia, the notice, vide annexure-1 to the writ petition issued u/s 148 of the Income Tax Act. The points of challenge are that the Assessing Officer completed the assessment on October 17, 1988, u/s 143(1) of the Act after accepting the return. On November 25, 1988, however, a notice was issued u/s 154 of the Act and an order was made on January 27, 1989. Being aggrieved by the said order, the petitioner preferred an appeal before the Commissioner of Income Tax (Appeals) who after considering the matter on the merits quashed the order of the assessing authority, vide annexure-4. The Department then went in appeal before the Income Tax Appellate Tribunal who decided the matter in favour of the petitioner. As quoted in the writ petition, the learned Tribunal held :
"In view of the circumstances of the case, it cannot be said that there was apparent and patent mistake from record which could be rectified u/s 154."
3. In this background, the impugned notice u/s 148 to reopen the matter is alleged to be wholly unwarranted and uncalled for and the petitioner in order to obtain efficacious remedy has visited the writ court, inasmuch as his grievance is that without satisfaction of the pre-conditions and for non-application of mind, the issuance of the notice in question is not permissible under law.
4. Mr. Mohanti has strongly highlighted that the entire facts are to be viewed and issuance of the notice u/s 148 is bad in law.
5. By order dated August 26, 1996, we directed the Income Tax authorities to produce the relevant records to satisfy us whether the reasons have been recorded for issuance of notice as envisaged u/s 148 of the Income Tax Act. Pursuant to such order, the records have been produced before us and we have perused the recorded reasons in the presence of Mr. Mohanti.
6. Mr. Mohanti has also drawn our attention to Section 147, in particular to the Explanation thereto, regarding the scope of issuance of such notice u/s 148. In support of his contention, he has referred to a decision in P. Palaniswami Vs. Commissioner of Income Tax. There, a Division Bench of the Madras High Court held that the finding of the Appellate Assistant Commissioner was that there was no mistake on the part of the officer in allowing depreciation and hence there was no escapement of taxable income and this order had become final as the Department not only did not file any appeal against the said order but actually took a decision to accept it. Secondly, the finality that attached to the said order of the Appellate Assistant Commissioner extends also to the conclusion of the Appellate Assistant Commissioner in the said order that there was no escapement of tax and hence this is also final and once it has become final, it was not open to the officer subsequently to destroy the finality by purporting to take action u/s 147(b). It was concluded that the Tribunal was, therefore, not right in holding that the reassessment proceedings u/s 147(b) were valid notwithstanding the order of the Appellate Assistant Commissioner.
7. Regard being had to the materials on record, we are of the view that since a proceeding u/s 154 of the Income Tax Act could not be sustained, that itself would not mean that no proceeding can be initiated u/s 148. Certainly we are not going to consider the merits of the case as it is still premature. It is open to the petitioner assessee to appear pursuant to the notice u/s 148 and raise all objections either on the point of limitation, if any, which is strongly opposed by Mr. Misra controverting the submission of Mr. Mohanti, or any other point including
