TaxTMI 
TaxTMI 
2005 (8) TMI 71
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....e following short question comes to surface for our consideration and adjudication in this writ petition: "Whether initiation and subsequent completion of the impugned reassessment order under section 148 of the Act has been without jurisdiction, as there was no 'reason to believe' as provided in section 147 of the Act, as the authority had no supporting material?" With a view to appreciate the merits of the petition let us first have the skeleton projection of the factual matrix and the chronology of the events leading to the rise of this petition under article 226 of the Constitution of India: A search and seizure operation was conducted by the respondent authority on May 8, 2003, under the Act. Thereafter, the jurisdiction of the case was transferred to the authority who has passed the assessment order in question on account of the fact that the reassessment proceedings were initiated upon issuance of notice under section 148 read with section 147 of the Act on March 10, 2004. Search and seizure operation had been carried on in terms of the provisions of section 132 of the Act in the residential premises of the assessee. During the course of search, seized documen....
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....e was eventually filed on December 13, 2004. Again the authority issued a notice under section 142(1) dated December 24, 2004, with a written communication to the assessee informing that a considerable length of time has already passed in seeking reasons recorded under section 148(2) before making any compliance which was not justified. More so on account of the fact that the assessment was delayed. The assessee replied and relied on the decision of the Supreme Court in the case of GKN Driveshafts (India) Ltd. v. ITO [2003] 259 ITR 19. Upon consideration of the facts and circumstances and hearing, the assessing authority passed the reassessment order in question holding that the total income of the assessee for the year in question was determined at Rs. 19,84,930 only with interest as per the provisions of law under sections 234A, 234B and 234C. The authority further directed in the reassessment order that penalty proceedings under section 271(1)(c) of the Act be initiated for concealment and for filing inaccurate particulars of income and directed to issue notice of demand in which an amount of Rs. 19,09,200 has been demanded. Hence this petition with the aid of article 2....
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....one without jurisdiction. At the best it could be said to be wrong exercise of the jurisdiction vested in the assessing authority under sections 147 and 148 and the impugned order could be said to be without jurisdiction, when the authority has no express or implied jurisdiction or when the jurisdiction is assumed on the premise of some material which is extraneous to the issue in question or exercise of such jurisdiction is contrary to the express statutory provisions as held by the judicial pronouncements. Failure or wrong exercise or error in exercising jurisdiction or insufficiency of the material could not be said to be divesting of power of authority authorised under the statutory provision as enshrined under sections 147 and 148 of the Act. We are therefore of the clear opinion that the alleged ground that mere insufficiency or inadequacy of the reasons or materials in support of forming the opinion leading to "reason to believe" is an exercise of powers under the statute which is appealable under section 246(1) of the Act. It cannot be said even for a moment that the impugned order is manifesting lack of jurisdiction even when the undisputed facts are examined and apprec....
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....mpugned order in the higher forum. The inbuilt statutory mechanism having jurisdiction to hear the appeal under section 246(1) of the Act is distinguishably provided under the Act whereas constitutional powers of this court enshrined under article 226 of the Constitution of India are as such decidedly, plenary, extraordinary, equitable and discretionary. Ordinarily, the writ court would be inclined to interfere where under the statutory provisions in question the impugned orders are not appealable. So is not the position in the case on hand. We are, therefore, of the clear opinion that no person can be allowed to short circuit or circumvent the statutory provisions of the Act. For an appeal provision for deposit of amount is a tempting factor for article 226. Reliance is placed on the decision of the hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd. v. ITO [2003] 259 ITR 19, wherein it has been propounded that upon notice to the assessee under section 148 of the Act the proper course of action for the noticee-assessee in this case is to file the return and, if he so desires, to seek reasons for issuing the notices. The Assessing Officer is bound to furnish reason....
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....id case law are attracted or not will depend upon the factual profile of each case. Decisions are rendered in the light of the facts which are variable in each case. We have considered the aforesaid decisions in case law relied on and we find that they are not helpful to the petitioner in the factual profile of the present case. Learned standing counsel for the Income-tax Department has placed reliance on a decision rendered by the Allahabad High Court in the case of K.M. Bansal v. CIT [1992] 195 ITR 247. In this decision various judicial pronouncements on the point in issue in this petition have been considered and the following conclusions are highlighted: "The above discussion yields the following propositions: (i) While the recording of reasons as contemplated by sub-section (2) of section 148 is obligatory, the reasons so recorded need not be communicated to the assessee along with the notice under sub-section (1) of section 148. It is also not open to the assessee to straightaway call upon the Assessing Officer to disclose or communicate reasons to him, as soon as he receives the notice under section 148(1). He must first file his return or a revised return, as the c....