Dismissed petitions challenging tax notices under Income Tax Act, emphasizing jurisdiction and fair assessment process.

The court dismissed the writ petitions challenging the validity of the notices issued under Section 148 of the Income Tax Act, 1961. It emphasized the necessity of valid jurisdiction and authority for such notices, requiring a "reason to believe" that income has escaped assessment based on new materials or information. The court directed the Income Tax Department to disclose the reasons for reopening the assessments to the petitioners within a specified period, allowing them to file objections. The Assessing Officer was instructed to adjudicate the matter fairly and pass assessment orders in accordance with the law.

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Issues Involved:
1. Jurisdiction and authority to issue notice under Section 148 of the Income Tax Act, 1961.
2. Issuance of notice beyond the statutory time limit.
3. Requirement of "reason to believe" for reassessment.
4. Change of opinion as a basis for reassessment.
5. Obligation to disclose reasons for reopening assessments.
6. Validity of reopening assessments based on new materials or information.

Detailed Analysis:

1. Jurisdiction and Authority to Issue Notice:
The petitioner contended that the notices issued under Section 148 were without jurisdiction and authority. The notices were issued after the expiry of the statutory time limit, making them invalid. The petitioner argued that the assessment orders for the years 1995-1996, 1996-1997, and 1997-1998 were properly assessed under Section 143(3) and scrutinized by the Income Tax Department. The block assessments were quashed by the ITAT, indicating no "reason to believe" for reassessment under Sections 147 to 153. The court emphasized that the authorities must have valid jurisdiction and authority to issue such notices.

2. Issuance of Notice Beyond the Statutory Time Limit:
The petitioner argued that the notices were issued beyond the statutory time limit prescribed under the Income Tax Act. The court cited various judgments, including Commissioner of Income Tax Versus ELGI Finance Limited and Fenner (India) Limited Vs. Deputy CIT, which clarified that the Assessing Officer must record a reasonable belief that income has escaped assessment within the statutory period. Failure to do so would vitiate the notice and the entire proceedings.

3. Requirement of "Reason to Believe" for Reassessment:
The court reiterated that for initiating reassessment proceedings under Sections 147 to 153, there must be a "reason to believe" that income has escaped assessment. The petitioner cited several judgments, including Assistant Commissioner of Income Tax Mumbai and others Versus ICICI Securities Primary Dealership Limited, emphasizing that mere change of opinion does not constitute a valid reason for reassessment. The court highlighted that the reasons for reopening must be based on new materials or information not previously disclosed by the assessee.

4. Change of Opinion as a Basis for Reassessment:
The petitioner argued that the notices were issued based on a change of opinion, which is not a valid ground for reassessment. The court referred to the judgments in Foramer Versus Commissioner of Income Tax and others and Madras Suspensions Limited Versus Deputy Commissioner of Income Tax, which held that reassessment based on a change of opinion is invalid. The court emphasized that reassessment must be based on new or additional material facts not previously considered.

5. Obligation to Disclose Reasons for Reopening Assessments:
The petitioner contended that the reasons for reopening the assessments were not disclosed, violating the principles laid down in GKN Driveshafts (India) Ltd. Versus Income Tax Officer and others. The court acknowledged that the reasons for reopening must be communicated to the assessee to enable them to file objections. The court directed the Income Tax Department to provide the reasons for reopening the assessments within a specified period.

6. Validity of Reopening Assessments Based on New Materials or Information:
The court discussed the necessity of new materials or information for reopening assessments. The court referred to the judgment in M/S. Phool Chand Bajrang Lal vs Income-Tax Officer And Another, which stated that reassessment is justified if new materials or information are discovered. The court concluded that the reassessment proceedings in the present case must be based on new materials or information, and the reasons for reopening must be communicated to the assessee.

Conclusion:
The court dismissed the writ petitions, directing the Income Tax Department to furnish the reasons for reopening the assessments to the petitioners within four weeks. The petitioners were instructed to submit their objections and documents within four weeks of receiving the reasons. The Assessing Officer was directed to adjudicate the matter, providing an opportunity to all parties and passing assessment orders on merits and in accordance with law.

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