Reassessment notice and full disclosure disputes should be decided by tax authorities, not routinely in writ proceedings.

Writ jurisdiction is ordinarily not exercised to quash a reassessment notice when the assessee can raise objections before the income-tax authorities and the dispute turns on factual issues. Reassessment may proceed where there is material giving rise to a reason to believe that income has escaped assessment and the alleged failure concerns full and true disclosure of material facts. Here, questions about the assessee's accounting method for protested bills and accrued interest required factual proof and could not be resolved on writ review. The reassessment notice was therefore not quashed, and the objections were left to be decided in the statutory assessment process.

---

---

Issues: (i) Whether the writ petition challenging the reassessment notice was not maintainable because the assessee had an alternative statutory remedy; (ii) whether the notice under section 148(1) read with section 147(a) of the Income-tax Act, 1961 was without jurisdiction for want of full and true disclosure of material facts, including the method of accounting adopted for protested bills and accrued interest.

Issue (i): Whether the writ petition challenging the reassessment notice was not maintainable because the assessee had an alternative statutory remedy.

Analysis: The existence of an alternate remedy does not by itself bar writ jurisdiction, but the High Court ordinarily declines to interfere where the dispute turns on facts and the statutory authorities are competent to examine objections in reassessment proceedings. At the stage of notice, the assessee can raise all objections before the assessing authority, and disputed factual issues are not normally resolved in writ proceedings.

Conclusion: The objection based on alternate remedy did not warrant interference under writ jurisdiction.

Issue (ii): Whether the notice under section 148(1) read with section 147(a) of the Income-tax Act, 1961 was without jurisdiction for want of full and true disclosure of material facts, including the method of accounting adopted for protested bills and accrued interest.

Analysis: Reassessment can be initiated where there is material to form a reason to believe that income has escaped assessment and the escapement is attributable to omission or failure to disclose fully and truly all material facts necessary for assessment. On the record, the assessee had shown mercantile accounting in its return, while the asserted treatment of protested bills on cash or mixed basis and the claim of changed accounting practice were matters requiring factual proof before the tax authorities. The Court held that it could not, on the materials then available, conclude that the notice was without jurisdiction or that the assessee had established full disclosure.

Conclusion: The reassessment notice was not quashed and the challenge on jurisdiction failed.

Final Conclusion: The court declined to interfere with the reopening proceedings and left the factual and legal objections to be decided in the statutory assessment process.

Ratio Decidendi: In writ jurisdiction, a reassessment notice will not be quashed where there is some material to form a reason to believe that income has escaped assessment and the alleged failure of disclosure raises disputed questions of fact that should be decided by the income-tax authorities.

---