Madhya Pradesh High Court
Triple A Trading And Investment Pvt. ... vs Assistant Commissioner Of Income-Tax ... on 25 September, 2000
Equivalent citations: [2001]249ITR109(MP)
Author: A.M. Sapre
Bench: A.M. Sapre
JUDGMENT A.M. Sapre, J.
1. The short question that falls for consideration in this writ filed by the petitioner (assesses) is whether the impugned notice issued under Section 148 of the Income-tax Act, 1961 (annexure P-4), is legal and proper ? A few facts to decide this short question need mention.
2. The petitioner is a private limited company. It is engaged in the business of stitching garments.
3. The petitioner filed a return of their income for the year 1988-89 on May 15, 1989. The concerned Assessing Officer accepted the return as per the provisions of Section 143(1) as it then stood after making prima facie adjustment. In other words, the order that was passed by the Assessing Officer was not an order falling under Section 143(3) ibid as a regular assessment order but it was only in the nature of adjustment of the total income of the petitioner (assessee) as contemplated under Section 143(1)(b) ibid which enabled the Assessing Officer to accept the returned income. It was accordingly communicated to the assessee on January 28, 1989.
4. On March 25, 1993, the Income-tax Department (concerned officer) issued a notice under Section 148 for reopening of the said assessment (1988-89) (annexure P-4). It is this notice which is impugned by the assessee (petitioner) in this petition.
5. The respondent (Revenue) filed a return and defended the issuance of the impugned show cause. According to the respondent, there are valid reasons for issuance of notice for reassessment which even could not be done as a regular assessment under Section 143(3) ibid. It was contended that the reasons that compelled the Revenue to issue notice were very much available on record and they were valid reasons empowering the Department to issue the notice in question: In support of the return, a copy of the reasons recorded prior to issuance of the impugned notices were filed as annexure P-1. It was on this factual basis and relying upon the legal requirement, the Revenue contended that the impugned show cause is valid, legal and proper. It has to therefore sustain.
6. Heard Shri S. S. Samvatsar, learned counsel for the petitioner. None for the respondents, though served.
7. The main submission of learned counsel for the petitioner while questioning the legality and validity of the impugned notice was that it did not contain any reasons, that what it contained was only the change of opinion, and that there was a full disclosure of facts. It was on these three premises, the notice was questioned.
8. Having heard the submission of learned counsel for the petitioner and having perused the record of case, I have come to the conclusion that petition has no substance. In other words, the impugned notice issued under Section 148 (annexure P-4), dated March 24, 1993, has to sustain.
9. The scope in writ jurisdiction to consider the legality and validity of such notice is limited as also well settled. The Act as it then stood does not provide for recording of reasons in the notice itself nor it provided for its communication to the assessee. What is decisive is the existence of reasons which necessitated the issuance of notice under Section 148 ibid. Admittedly, this exercise has been done by the respondent (Revenue) when the concerned Assessing Officer duly recorded the reasons in the file (annexure P-1). The respondent has therefore, on affidavit disclosed the reasons in the return and also filed the copy of the said reasons for the perusal of this court. This court cannot examine the adequacy or inadequacy of the reasons that led to issuance of notice in question.
10. It is however, averred that there was no regular assessment made in the case of an assessee under Section 143(3) ibid. It is then averred that the assessee being a new assessee had filed their first return for the year August 8, 1989. It is, inter alia, alleged that in the later years when the returns for the subsequent years were taken up for scrutiny, it was noticed, inter alia, that the lease rent is excessively paid in contravention to the provisions of Section 40A in the assessment year in question. It was alleged that taking into account these facts, a detailed note recording reasons and justifying the facts, the impugned notice was issued.
11. Perusal of R-1, i.e., reasons in my opinion do constitute a ground for issuance of notice under Section 147/148 of the Act. There are valid and legal grounds for sustaining the notice. As observed supra, it is not a case of no reasoning, nor is it a case of no disclosure of reasoning.
12. Taking into account the aforesaid aspects of the case, the totality of entire factual scenario, and the fact that no regular assessment was made, the petition is found to be devoid of substance, it is accordingly dismissed. As a consequence, the impugned notice annexure P-4 issued under Section 148, dated March 24, 1993, is upheld.
13. Since this court had stayed the further proceedings pursuant to the impugned notice, the stay order dated April 23, 1993, is vacated and the concerned Assessing Officer is free to proceed to complete the proceedings in accordance with law.