Delhi High Court
Jagdish Preshad Gupta vs Jt. Commissioner Of Income-Tax, ... on 7 July, 2005
Equivalent citations: (2005)197CTR(DEL)292, 122(2005)DLT178, 2005(83)DRJ372, [2006]283ITR585(DELHI)
Author: Swatanter Kumar
Bench: Swatanter Kumar, Madan B. Lokur
JUDGMENT Swatanter Kumar, J.
1. In the present writ petition, the petitioner prays for quashing of the impugned notice dated 20.05.2004 in relation to the assessment years 1998-99, 1999-2000, 2000-01 and 2002-03 issued by the Income-Tax authorities under Section 148 of the Income Tax Act and also prays for awarding of compensation and costs for the inconvenience and harassment caused to the petitioner as a result of issuance of notice and proceedings taken up by the authorities.
2. At the very outset, we may notice that petitioner had earlier filed a writ petition being WP(C) No. 5562/2005 which was disposed of by a Division Bench of this court while passing the following direction:-
"We are not impressed with the contention. The order of assessment was passed by the AO after duly considering the objections filed by the assessed in response to the notice under Section 147 of the Act. All the objections raised in this writ petition can conveniently be raised before the Commissioner of Income Tax Appeals by the assessed by filing an statutory appeal available to him under the provisions of the Act. Without commenting upon the merits of he order and the contentions raised by the petitioner before us in relation thereto, we dispose of this writ petition with liberty to the petitioner to file an appeal in accordance with law. The petitioner would be at liberty to take up all the contentions raised in this writ petition.
Dismissed as withdrawn.
Liberty as prayed, granted."
3. In response to notice issued by the respondents under Section 148 of the Act, the petitioner filed detailed objections/reply on 19.05.2005 copy of which is annexed to the writ petition as Annexure-P3. In this reply, the petitioner has taken detailed objections on merits as well as relating to the legal aspect of the very issuance of notice in question. No order has been passed by the respondents as yet disposing of the objections of the petitioner as the petitioner filed the present writ petition on 25th May, 2005 not even a week later than the filing of the objections before the competent authority.
4. The learned counsel appearing for the petitioner while relying upon the judgments of this court in Delhi Tourism & Transport Development Corpn. Ltd. v. Assistant Commissioner of Income-tax (2004) 141 TAXMAN 361 (Delhi) & Sita World Travel (India) Ltd. v. Commissioner of Income-tax (2004) 140 TAXMAN 381 (Delhi); (2005) 274 ITR 186 (Delhi) contended that it is not obligatory upon the part of the petitioner to await the passing of the order disposing of the objections/reply filed by the petitioner in response to notice under Section 148 of the Act and as there is apparent illegality in issuance of the said notice and the respondents are trying to harass the petitioner, the petitioner can rightly invoke the jurisdiction of this court under Article 226 of the Constitution of India.
5. On the other hand, the learned counsel appearing for the revenue while relying upon the judgments in G.K.N. Driveshafts (India) Ltd. v. Income-Tax Officer and Ors. (2002) Vol. 257 ITR 702 (Delhi), GKN Driveshafts (India) Ltd. (2003) Vol. 259 ITR 19 (SC) & GKN Driveshafts (India) Ltd. v. Income Tax Officer and Ors., contended that the present writ petition is an abuse of the process of law. The petitioner is obliged to wait for the disposal of his objections by the competent authority on merits. The order of assessment would be passed upon reassessment and petitioner can also avail of the statutory remedy of appeal available to him. There is no patent error or illegality in the order passed by the authorities in issuing the notice under Section 148 which has been issued upon due application to mind for good reasons and has been passed with the approval of Deputy Commissioner of Income Tax, Circle-22(1), New Delhi. The petitioner had filed a return showing loss of 1,37,36,350/- on 31st August, 1995 for the assessment year 1995-96. Notice to the assessed under Section 143(2) issued on 26th July, 1996 which was served upon the assessed on 8.8.1996. The case was initially processed at a loss of Rs. 1,37,33,852/- on 26th March, 1997. The assessed is proprietor of various concerns namely M/s. Jindal Motors, M/s. Pradeep Oil Corporation and M/s. Jagson International. After having served the notice as afore-referred, the Assessing Officer vide his order dated 27.3.1998 disallowed certain deduction claims and made additions to the return of the assessed. A total income of Rs. 52,61,891/- was assessed to tax as against return loss of 1,37,36,350/-. This order was challenged in appeal by the assessed before the CIT(A). The appeal was partly allowed by the CIT(A) who gave a relief of Rs. 1,72,593/-, the actual payment which had been made by the assessed to DESU. Against the order of the CIT(A), an appeal was preferred by the revenue as well as cross-objections were preferred by the assessed before the Income Tax Appellate Tribunal. The ITAT partly allowed the appeal of the revenue for statistical purposes and cross-objections preferred by the assessed were dismissed by detailed order dated 22.11.2004. On 19th March, 2004, the Assessing Officer passed an order of assessment making similar observations as well as recomputed the total income at Rs. 1,26,49,286/- for assessment year 2001-02. Against this order, the assessed preferred an appeal before the CIT(A) who vide his order dated 31.05.2004 allowed the appeal and the disallowance made was ordered to be deleted. As far as the notices issued by the authorities under Section 148 of the Income Tax Act for the year assessment years 1998-99, 1999-2000, 2000-01 and 2002-03, the assessed questioned their correctness and legality in WP(C) No. 5562/2005 wherein he had also prayed for quashing of the order of assessment dated 30th March, 2005. This writ was disposed of as already noticed above in regard to the notices issued by the Assessing Officer for the year 2001-2002. The petitioner has challenged the notices in the present writ petition. It is undisputed case before us that the petitioner has filed objections/reply to the grounds taken by the Assessing Officer for invoking the provision of Section 148 of the Income Tax Act. These objections were filed on 19th May, 2005 and even before expiry of the week, the petitioner has filed the present writ petition. It is stated that the issuance of notice under Section 148 of the Act by the Assessing Officer is without jurisdiction as it is merely based upon change of opinion on the same facts. It is also stated that the objection of the petitioner has already been held in favor of the petitioner by acceptance of his appeal before the CIT(A) in relation to the assessment year 2001-2002 by the CIT(A). A Division Bench of this court in the case of Delhi Tourism & Transport Development Corporation Ltd. v. Assistant Commissioner of Income-tax (supra) while relying upon the judgment of the Supreme Court in the case of G.K.N. Driveshafts (India) Ltd. v. ITO (supra) had disposed of the writ with the direction to the respondent to consider the objections filed by the assessed and decide the same by passing a speaking order.
6. No doubt it is a settled principle of law that where all relevant facts and material were placed before the Assessing Officer and the Officer consciously considered the facts and arrived at the decision, the same cannot be reopened merely because subsequently the Officer changes his opinion or some other Officer takes a different view. In this regard, reference can be made to the above referred case of Sita World Travel (India) Ltd.
7. Even in the case of Jindal Photo Films Ltd. v. Deputy Commissioner of Income Tax Anr. (1998) Vol. 234 ITR 170, the court had taken the view that the Assessing Officer would not be competent to re-open the assessments and withdraw the deduction granted earlier under Section 80-I particularly when there was no change of circumstances, no further material was placed or information received by the Assessing Officer. This being a change in opinion could not be a ground for reopening the assessment proceedings. This view was approved by a Full Bench of this court in the case of Commissioner of Income -Tax v. Kelvinator of India Ltd. (2002) Vol. 256 ITR 1. This legal principle is hardly in controversy before us. Learned counsel while relying upon the case of GKN Driveshafts (India) Ltd. (supra) vehemently contended that when a notice under Section 148 of the Income Tax Act is issued, the proper course for the assessed is to file the return objections to the notice. As the petitioner has already filed objections he has to await the result of the objections which the Assessing Officer would dispose of by passing a speaking order. According to him invoking the writ jurisdiction of this court at this stage may not be permissible and in this regard he also relies upon the judgment of this court in G.K.N. Driveshafts (India) Ltd. (supra).
8. Normally where a statutory remedy is available to an assessed this court would be reluctant to entertain a writ petition under Article 226 of the Constitution of India unless the action complaint of the respondents is without jurisdiction, is on assumption of power not vested in the Officer or the action is patently illegal or arbitrary. There cannot be an absolute principle of law that the jurisdiction of this court under Article 226 of the Constitution of India would be debarred Further, there is an alternative remedy available to the assessed under the provisions of the enactment. The Bombay High Court in the case of Ajanta Pharma Ltd. v. Assistant Commissioner of Income-Tax and Ors. (2004) Vol. 267 ITR 200 (BHC) took the view that where the exercise of power ex facie appears to be without jurisdiction, the court would be inclined to interfere but even there, such lack of jurisdiction would have to be revealed from the notice and reasons on the face thereof and not by discussion on merits. The Assessing Officer has for the relevant year disallowed the deductions and made the additions rightly or wrongly is not a question which can be gone into by us in the present writ petition. The order of the CIT(A) may persuade the concerned authority to take a view in favor of the petitioner, at this stage, it cannot be said to be a ground which would render the proceedings before the Assessing Officer taken in contemplation of Section 148 of the Act to be entirely without jurisdiction and that too ex facie. It is obligatory upon the part of the Assessing Officer to pass a speaking order in relation to the objections filed by the assessed. In the objections filed, the assessed has not only narrated various facts but has strongly relied upon various judgments to substantiate his objection that it is a case of change of opinion and issuance of notice under Section 148 was not justified. The plea of the petitioner basically is in relation to the justification or otherwise for issuance of such notice but and is no way a case of without jurisdiction. These objections have to be considered by the competent authority and dealt with by passing a speaking order in accordance with law as laid down by the Supreme Court in GKN Driveshafts (India) Ltd.(supra). We have already passed an order in relation to other years in WP(C) No. 5562/2005 and we see no reason to pass a different order in the present case. The petitioner is obviously at liberty to agitate all these issues before the Assessing Officer as he has already raised these objections before that authority. This court has to determine the issue of lack of inherent jurisdiction or without jurisdiction without determining the merits of the assessment orders. The petitioner has in detail given the grounds which according to him constitute a mere change of opinion and not a substantive reason for justifying the reopening of assessment proceedngs in terms of Section 148 of the Act. We are of the considered view that the authorities should deal with these objections and pass a speaking order in accordance with law expeditiously. The petitioner obviously would have the right to question the legality or validity of the said order in appropriate proceedings.
9. The writ petition is accordingly disposed of while leaving the parties to bear their own costs.
10. Accordingly, C.M. Nos. 6986/05, 6987/05 also stand disposed of.