1999 (8) TMI 55 - HC - Income Tax

Court quashes Income-tax Officer's notice under section 148 for lack of evidence and mala fides.

The court quashed the notice issued by the Income-tax Officer under section 148 of the Income-tax Act, 1961, due to the failure of the Revenue to provide ... Reassessment, Notice, Writ Petition Issues:Challenge to notice under section 148 of the Income-tax Act, 1961 without proper authority and material; Existence of conditions precedent for issuance of notice under section 148 challenged; Failure to file counter-affidavit by the Revenue; Allegations of mala fides and improper motives against the Income-tax Officer; Effect of failure to file counter-affidavit on allegations made.Analysis:The petitioners challenged a notice issued by the Income-tax Officer under section 148 of the Income-tax Act, 1961, claiming it was without proper authority. They argued that the notice lacked the necessary sanction from the Commissioner of Income-tax or the Central Board of Direct Taxes and was based on insufficient grounds. Despite being served, the Revenue did not file a counter-affidavit. The petitioners relied on legal precedents, including a Supreme Court judgment, to support their claim that in the absence of a counter-affidavit, the court should accept their allegations and quash the notice. The court highlighted the importance of the Income-tax Officer providing evidence to disprove the challenge to the conditions precedent for issuing the notice. Without such evidence, the court cannot dismiss the petition.In a significant observation, the court emphasized that when an assessee challenges the existence of conditions precedent for a notice under section 148, it is the responsibility of the Income-tax Officer to provide evidence to justify the notice. Failure to do so can result in the petition being accepted. The court referred to a Supreme Court decision to support this principle, emphasizing the need for the Income-tax Officer to meet the challenge with relevant records and affidavits. In this case, the court noted the absence of any material from the Revenue to support the jurisdiction of the Income-tax Officer, leading to the conclusion that the notice should be quashed.Regarding allegations of mala fides and improper motives against the Income-tax Officer, the court highlighted the importance of filing a counter-affidavit to address such claims. The court referenced a Supreme Court judgment to stress the need for authorities to present denials or their version of events when faced with allegations. In this case, the Income-tax Officer did not appear, file a counter-affidavit, or provide any records. As a result, the court relied on the petition and supporting documents to make its decision. The court concluded that without any contrary evidence, the notice issued by the Income-tax Officer should be quashed.In light of the above analysis, the court decided to quash and set aside the notice issued by the Income-tax Officer under section 148 of the Act, making the rule absolute in favor of the petitioners. The court disposed of the writ petition accordingly, with no order as to costs.