Bombay High Court
Morarjee Goculdas Spinning And Weaving ... vs P.N. Bansal And Another on 29 June, 1993
Equivalent citations: [1994]208ITR471(BOM)
JUDGMENT M.L. Pendse, J.
1. By notice dated February 23, 1983, the Inspecting Assistant Commissioner of Income-tax, Range-I, Bombay, in exercise of powers under section 148 of the Income-tax Act, 1961, informed the petitioners that it is proposed to reassess the income for the assessment year 1978-79, as the officer had reason to believe that income of Rs. 16,02,360 had escaped assessment within the meaning of section 147 of the Income-tax Act. On receipt of the notice, the petitioner called upon the respondents to furnish the details and reasons for exercise of powers. In response to the demand, letter dated November 16, 1983, was addressed by the Officer to the petitioners. The letter asserts that while completing the assessment on May 28, 1979, depreciation amount was not permissible under section 80J of the said Act. The letter also referred to an amount of refund received by the petitioners for additional excise duty. The petitioners thereafter filed the present petition under article 226 of the Constitution challenging the service of notice under section 148 of the Act.
2. Shri Dastoor, learned counsel appearing on behalf of the petitioners, submitted that exercise of jurisdiction by the respondents under section 148 of the Act is totally illegal and unsustainable. Learned counsel submitted that it is now well-settled by a catena of decisions that before exercise of the powers under section 148 of the Act, it is incumbent upon the officer to record the reasons for the exercise of such powers. Shri Dastoor submits and in our judgment very correctly, that the respondents have not cared to produce the reasons recorded by the officer before exercise of jurisdiction. It is also interesting to note that the respondents have not cared to file the return of the officer, who might have recorded the reasons. In the absence of recorded reasons and in the absence of any return from the officer, who might have recorded the reasons, the conclusion is inescapable that exercise of the powers was without any jurisdiction. Shri Jetly, learned counsel appearing on behalf of the Department, submitted that the reasons are set out in the letter are sufficient compliance with the requirements under section 148 of the Act. The submission of learned counsel is only required to be stated to be rejected. It has been repeatedly held that letter written by the officer are no substitute for the recorded reasons.
3. Accordingly, the petition succeeds and the rule is made absolute in terms of prayer clause (a). In the circumstances of the case, there will be no order as to costs.