1994 (9) TMI 26 - HC - Income Tax

Court quashes illegal tax notice under section 148, rules in favor of petitioner.

The court allowed the writ petition in favor of the petitioner, quashing the notice issued under section 148 of the Income-tax Act for the assessment year ... Notice Of Reassessment, Writ Petition Issues:Challenge to notice under section 148 of the Income-tax Act, 1961 for assessment year 1980-81 based on lack of disclosed reasons.Analysis:The petitioner challenged a notice dated February 6, 1985, served under section 148 of the Income-tax Act, 1961, for the assessment year 1980-81, contending that no reasons were disclosed by the assessing authority for sending the notice. The petitioner argued that the assessment for the year had been completed earlier, and all relevant income details were disclosed. The petitioner submitted a detailed reply through a chartered accountant, emphasizing that there was no omission or violation in income disclosure. The petitioner also cited the submission of partnership firm accounts and partnership deed to the assessing authority. The petitioner further contended that the notice under section 147(b) read with section 148 was illegal, without jurisdiction, and requested its withdrawal. The Revenue was informed that all necessary facts for assessment had been voluntarily disclosed, and the proceedings were requested to be dropped.Upon receiving no reply from the Revenue despite court notices, the court deemed the petitioner's averments as admitted and reliable. The petitioner relied on the judgment of the Calcutta High Court in Indra Co. Ltd. v. ITO, emphasizing the duty of the Revenue to disclose reasons for issuing notices under sections 147 and 148 of the Act. Additionally, references were made to the apex court judgments in Madhya Pradesh Industries Ltd. v. ITO, highlighting the need for valid reasons and jurisdiction for issuing notices under the Income-tax Act.After considering the submissions, relevant documents, and legal precedents, the court concluded that the Income-tax Officer lacked justification for issuing the impugned notice without disclosing reasons. The court found the notice illegal and without jurisdiction, quashing and setting it aside. The writ petition was allowed in favor of the petitioner.