1999 (2) TMI 20 - HC - Income Tax

Court dismisses challenge to Income-tax Act notices for multiple assessment years, upholds Assessing Officer's actions

The court dismissed the writ petitions challenging notices under section 148 of the Income-tax Act for multiple assessment years. The Assessing Officer ... Reassessment, Writ Issues:Challenging notices under section 148 of the Income-tax Act for various assessment years, contention on reopening assessments, requirement of Commissioner's sanction, and limitation period.Analysis:The case involved writ petitions against notices issued under section 148 of the Income-tax Act for multiple assessment years. The original assessments had shown significant agricultural income from leased land and loans from various sources. Subsequent investigations revealed discrepancies as landholders and creditors denied their involvement. The Assessing Officer issued notices based on the belief that taxable income had escaped assessment. The petitioner argued that the assessments were already investigated, and there was no valid reason for reopening them. Additionally, it was contended that the Commissioner's sanction was not obtained within the prescribed time limit.The petitioner relied on a judgment from the Patna High Court and another from the Supreme Court to support their case. The Patna High Court ruling highlighted that assessments cannot be reopened based on subsequent inquiries if loans were accepted in the original assessment through proper channels. However, the present case lacked similar circumstances. The Supreme Court's decision emphasized that fresh and reliable information exposing the falsity of loans could justify reopening assessments, illustrating a distinction from drawing a fresh inference.Regarding the Commissioner's sanction and limitation period, the court found that for the assessment year 1992-93, the contention was irrelevant. The notices for other years explicitly mentioned obtaining the Commissioner's satisfaction, indicating no substantial basis for this plea. The court emphasized that the petitioner could challenge the notice validity during assessment and appellate proceedings, where all factual and legal aspects could be addressed. As there were no compelling circumstances warranting the court's intervention under Article 226 of the Constitution of India, the writ petitions were dismissed with costs awarded to the respondent.