The court established that the notice under Section 147/148 is not vitiated merely for the reason that notice under Section 143(2) had not been issued, and the condition precedent for proceeding under Section 147/148 is that the Assessing Officer should have reason to believe that income has escaped assessment.

Jawahar Lal Gupta, J.

1. Is the action of the respondent-Joint Commissioner of Income-tax, Special Range, Patiala, in issuing notice dated March 29, 2001, under Section 148 of the Income-tax Act, 1961, rendered illegal merely for the reason that notice under Section 143(2) had not been issued to the petitioner ? This is the short question that arises for consideration in this petition under Article 226 of the Constitution. A few facts may be noticed.

2. On December 24, 1999, the petitioner filed its return of income for the assessment year 1999-2000. It declared an income of Rs. 1,45,26,10,930. On May 23, 2000, the respondent informed the petitioner that after adjusting the tax already paid, it was liable to pay an amount of Rs. 1,46,88,952. A copy of this "intimation" is at annexure P-2 with the writ petition. The petitioner filed an appeal claiming that the amount of Rs. 1,70,20,247 charged by way of interest under Section 234C was not leviable. Vide order dated November 23,2000, the Commissioner of Income-tax (Appeals) accepted the petitioners claim.

3. On February 25, 2001, the Assessing officer issued notice under Section 154/ 155 for amendment of the intimation under Section 143(1). On March 8, 2001, the petitioner filed its reply. It also filed a revised return of income on March 19, 2001.

4. On March 31, 2001, the petitioner received a notice dated March 29, 2001, under Section 148 of the Act. A copy of this notice is at annexure P-3 with the writ petition. The petitioner filed its reply on April 28, 2001. Thereafter, on May 17, 2001, the petitioner requested the respondent to disclose the reasons for reopening of the assessment under Section 148 of the Act. A copy of this communication is at annexure P-4 with the writ petition. The reasons were supplied by the respondent with letter dated July 31, 2001. A copy has been produced as annexure P-5 with the writ petition. Having received the communication, the petitioner submitted an application dated September 6, 2001, to the respondent that the proceedings be dropped. The petitioner alleges that no reply has been received. Thus, it has filed the present writ petition.

5. The petitioner alleges that the initiation of proceedings by issuance of "notice under Section 147/148 suffers from . . . legal infirmities." It is, inter alia, alleged that if the Assessing Officer felt that there was "any understatement of income in the return submitted and wanted to verify its correctness, it was obligatory on his part to issue a notice under Section 143(2) of the Act ...". Having failed to do so, "he cannot now say that income should be deemed to have escaped assessment and issue a notice under Section 147/148 after the expiry of twelve months from the end of the month in which the first return was submitted." Various other grounds have also been raised. It has been further alleged that if the respondent is to "make an assessment under Section 143(3} after issuing notice under Section 143(2), the period for making assessment available will be up to March 19, 2002, whereas if he is allowed to make an assessment under Section 147/148, the period of limitation will be up to March 31, 2003. Such a discriminatory device cannot legitimately be permitted to be adopted by the respondent so as to extend the period of limitation." On these premises, the petitioner prays that the notice dated March 29, 2001, a copy of which has been produced as annexure P-3, be quashed.

6. We have heard Mr. G. C. Sharma, learned counsel for the petitioner. The solitary contention raised by learned counsel is that the assessment having not been finalised and no notice under Section 143(2) having been issued, the impugned notice cannot be sustained. Learned counsel has referred to the decisions in Kamal Textiles v. ITO [1991] 189 ITR 339 (MP); Pradeep Kumar Har Saran Lal v. Assessing Officer [1998] 229 ITR 46 (All) and Mahanagar Telephone Nigam Ltd. v. Chairman, CBDT [2000] 246 ITR 173 (Delhi).

7. The sho