Jharkhand High Court
Navketan Enterprises vs Commissioner Of Income Tax, Central ... on 10 May, 2001
Equivalent citations: 2001(49)BLJR2182, 2001 AIR - JHAR. H. C. R. 257, (2002) 120 TAXMAN 474, (2001) 250 ITR 508, 2001 BLJR 3 2182, (2001) 169 CURTAXREP 562, 2002 (167) SCC (CRI) 54
Author: M.Y. Eqbal
Bench: M.Y. Eqbal
JUDGMENT V.K. Gupta, C.J.
1. A very short point is involved for consideration in this case. The petitioner challenges the initiation of proceedings under Section 147 of the Income Tax Act and with regard to the issuance of the Notices in terms of Section 148 of the Income Tax Act, 1961 on the ground that the Assessing Officer has wrongly obtained the approval of the Joint Commissioner before issuing the impugned notices whereas he should have obtained the approval of the Board because that was the requirement of law as it stood in the year 1988, relating to the Assessment Year 1988-89.
2. Admittedly the petitioner received a notice in terms of Section 148 of the Income Tax Act. 1961 (the notice is dated 8.12.1998) whereby the petitioner was informed by the Assessing Officer that he had reasons to believe that his income chargeable to tax for the Assessment Year 1988-89 had escaped assessment within the meaning of Section 147 of the Act and that, therefore, the Assessing Officer proposed to reassess the income for the aforesaid assessment year and accordingly notice under Section 148 of the Act was issued asking the petitioner to deliver to the Assessing Officer within 30 days from the date of service of the notice return in the prescribed form of his Income for the relevant Assessment Year.
3. The petitioner was assessed under Section 143(1) of the Income Tax Act for the Assessment Year 1988-89 and since the proceedings under Section 147 of the Act with respect to the re- assessment of the income were to be initiated by the Assessing Officer, issuance of notice under Section 148 of the Act being a mandatory requirement of law, the said notice was issued.
4. Conditions precedent for issuance of a notice under Section 148 of the Act are to be found in Section 151 of the Act. Section 151, reads thus :
"(1) In a case where an assessment under sub-section (3) of Section 143 or Section 147 has been made for the relevant assessment year, no notice shall be issued under Section 148, by an Assessing Officer, who is below the rank of Assistant Commissioner or Deputy Commissioner unless the Joint Commissioner is satisfied on the reasons recorded by such Assessing Officer that it is a fit case for the issue of such notice :
Provided that after the expiry of four years from the end of the relevant assessment year, no such notice shall be issued unless the Chief Commissioner or Commissioner is satisfied on the reasons recorded by the Assessing Officer aforesaid, that it is a fit case for the issue of such notice.
(2) In a case other than a case falling under sub- section (1), no notice shall be issued under Section 148 by an Assessing Officer, who is below the rank of Joint Commissioner, after the expiry of four years from the end of the relevant assessment year, unless the Joint Commissioner is satisfied on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of such notice."
5. Whereas Sub-section (1) of Section 151 deals with only such cases where the assessment earlier was made under Section 143(3) or under Section 147 of the Act, subsection (2) deals with all other assessments which were earlier made, but which were sought to be reopened under Section 147 of the Act. In this case, since the assessment for the year 1988-89 was made in terms of Section 143(1) of the Act, we are concerned only with Sub-section (2) of Section 151 of the Act.
6. It is worth noticing that Section 151 of the Act was amended by the Direct Tax Laws (Amendment) Act, 1987. This amendment was to take effect from 1.4.1989. Prior to its amendment, Section 151 stood as under :
"151(1). No notice shall be issued under Section 148 of the Act after the expiry of eight years from the end of the relevant assessment year unless the Board is satisfied on the reasons recorded by the Assessing Officer that it is a fit case for issue of such notice.
(2) No notice shall be issued under Section 148 after the expiry of four years from the end of the relevant assessment year unless the Chief Commissioner or Commissioner is satisfied on the reasons recorded by the Assessing Officer that it is a fit case for the issue of such notice."
7. It would, thus, be seen that whereas prior to 1.4.1989. Section 151 provided that no notice would be issued under Section 148 of the Act after the expiry of 8 years from the end of the relevant assessment year unless the Board was satisfied on the reasons recorded by the Assessing Officer that it was a fit case for issuance of such notice. In the amended Section 151, as it presently stands, Sub-section (2) provides only for the approval of the Joint Commissioner of Income Tax with respect to the reasons recorded by the Assessing Officer if the reassessment under Section 147 of the Act is to be carried out at a point of time beyond four years after the passing of the assessment order originally under Section 143(1) of the Act. It thus means that whereas under the old Section 151(1) of the Act, the approval of the Board was required, Sub-section (2) of Section 151, as it presently stands, requires approval of the Joint Commissioner, if the proceedings have to be initiated by an Assessing Officer of the rank below Joint Commissioner at a point of time four years after the original assessment order was passed.
8. The contention of Mr. Moitra, learned counsel appearing for the petitioner is that since in the present case approval of the Joint Commissioner and not the Board has been obtained by the Assessing Officer, the proceedings initiated as based on the notice issued under Section 148 of the Act are invalid because the law applicable to the case of the petitioner is under Section 151(1) of the Act as it stood prior to its amendment by the Direct Tax Laws (Amendment) Act, 1987 because the assessment year involved is 1988-89 and further because the aforesaid amendment was to take effect from 1.4.1989. We are not in agreement with the aforesaid contention of Mr. Moitra.
9. Section 151 of the Income Tax Act, 1961 is in the nature of procedural law. Power to invoke Section 147 undoubtedly is subject to issuance of notice under Section 148 of the Act. The manner of issuing such a notice and the requirements to he complied with, with regard thereto, are contained in Section 151 of the Act. If, therefore, an Assessing Officer contemplates initiating proceedings under Section 147 of the Act and before he does so since he has to issue a notice under Section 148 of the Act, the requirements as contained in Section 151 of the Act have to be complied with. These procedural requirements are relatable either to the nature of the original assessment order, whether it was passed under Section 143(3) or Section 147 of the Act or whether it was passed otherwise and how much period has elapsed between the passing of the original assessment order and initiation of reassessment proceedings under Section 147 of the Act. The law as it presently stands, therefore, has to be pressed into aid to apply the aforesaid procedural requirements for invoking Section 147 and thus, for issuing notice under Section 148, the Assessment Officer is supposed to look at the law as it presently stands and apply the same. He has not to go back to a law which stood at a point of time when the original assessment order was passed. Obtaining the approval of a superior officer is procedural in nature. Whether the approval of the Board is to be obtained or that of the Joint Commissioner is not substantive in nature. Therefore, for the purpose of obtaining the approval, the Assessing Officer has to apply the law as it stands on the date when he decides, by recording his reasons, to invoke Section 147 of the Act and, thus, decides to issue notice under Section 148 of the Act. For doing this, he has not to look at the law which stood at a point of time when the original assessment order was passed.
10. There is another angle to this aspect of the applicability of the law on the subject. As Section 147 clearly suggests, the decision to initiate proceedings for reassessment in respect of an order already passed is taken by the Assessing Officer much after the original assessment order has already been passed. Let us take the example of our case. In our case, the original assessment order was passed in the year related to the Assessment Year 1988-89. That event is since long over. Taking of the decision or making up of the mind with regard to reopening of the assessment in terms of Section 147 of the Act has nothing to do with the assessment year in question, nor the passing of the original as-
sessment order with respect to that Assessment Year. The decision to initiate proceedings under Section 147 can be taken at any time after the passing of the original assessment order. It is, therefore, the point of time when this decision is taken which determines the applicability of the law on the subject. In other words, whenever the Assessing Officer decides to initiate proceedings for reassessment, it is only at that point of time that he is to look to the law as it exists then for its proper application, to the procedure that he would apply for issuing notice in terms of Section 148 of the Act. The contention of Mr. Moitra is, therefore, totally devoid of any force because the law as it stood at a point of time relatable to the assessment year in question is totally irrelevant and has no applicability whatsoever.
11. In the result, therefore, the petition is dismissed, but without any order as to costs. The interim direction is vacated.
12. Petition dismissed.