AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2003 (11) TMI 32
X X X X Extracts X X X X
X X X X Extracts X X X X
....ively. The legality and validity of the said notices and the reasons appended thereto are sought to be challenged primarily on the ground that the action on the part of respondent No.1 in issuance of the said notice is ex facie illegal and without jurisdiction, and the same is ex facie revealed from the reasons appended to the said notice. The notice is also challenged on various other grounds. At the outset, the learned advocate appearing for the respondents, has raised a preliminary objection regarding non-maintainability of the petitions on the ground that the same are premature inasmuch as the petitioners have efficacious alternative remedy in the form of reply to the said notices and even in relation to the point pertaining to the lack of jurisdiction or absence of power to issue the notices in a given set of facts can be raised in such reply, and the order passed thereon can be subjected either to appeal or even intervention by this court in writ jurisdiction, and in that regard, heavy reliance is placed in the decision of the apex court in GKN Driveshafts (India) Ltd. v. ITO [2003] 259 ITR 19. The decision of the apex court in GKN's case [2003] 259 ITR 19 was in an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....appellate authority, however, the notices relating to the other five assessment years, viz., 1992-93, 1993-94, 1994-95, 1997-98 and 1998-99, were the subject matter of the appeals before the apex court. A plain reading of the decision of the apex court in GKN's case [2003] 259 ITR 19 would, therefore, disclose that it had refused to interfere in the order of the High Court of Delhi dismissing the writ petition on the ground that the same was premature as the petitioners had approached the High Court immediately on receipt of the notice without availing of an opportunity of filing the reply and the objections to the notice. Simultaneously, it was observed that the "proper course of action for the noticee is to file a return and if, he so desires, to seek reasons for issuing notices when a noticee receives a notice under section 148 of the said Act" The apex court has further observed that the noticee is entitled to insist on adjudication of the objections to the issuance of notice and to invite a speaking order from the adjudicating authority in relation to such objections, whereupon, the Assessing Officer would be enjoined to dispose of such objections by a speaking order. I....
X X X X Extracts X X X X
X X X X Extracts X X X X
....reof. He has further submitted that the decision of the apex court in GKN's case [2003] 259 ITR 19 does not lay down the law to the effect that the jurisdiction of the High Court under article 226 of the Constitution of India is barred to entertain such matters unless the parties approach the Assessing Officer with their replies and objections on receipt of the notice under section 148 of the said Act. The apex court in Calcutta Discount Co. Ltd. [1961] 41 ITR 191, while dealing with matters relating to notice which was issued under section 34 of the Indian Income-tax Act, 1922, and dealing with the point of jurisdiction of the High Court to entertain such matters, has observed that at the stage when the Income-tax Officer issues the notice he does not act judicially or quasi judicially and, therefore, a writ of certiorari or prohibition may not be issued, yet has further ruled that: "it is well settled however that though the writ of prohibition or certiorari will not issue against an executive authority, the High Courts have power to issue in a fit case an order prohibiting an executive authority from acting without jurisdiction. Where such action of an executive authority....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d have rejected the petition on this ground. However, in the peculiar facts and circumstances of this case, we are not inclined to dismiss the petition in limine because the reasons now disclosed by the Assessing Officer, on the face of it, show that there is nothing in the reasons to indicate failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment" It was further observed that: "the court finds ex facie that the Assessing Officer has sought to reopen the assessment on certain erroneous assumptions." It is well settled that no judgment can be read as a statute. Every decision is an authority for what it actually decides and not what follows from it, and that has been repeatedly stated by the apex court in various decisions. The elaborate decisions on the said point are in the matter of Union of India v. Dhanwanti Devi [1996] 6 SCC 44 and Islamic Academy of Education v. State of Karnataka, AIR 2003 SCW 4240. If one reads the decision of the apex court in GKN's case [2003] 259 ITR 19, as rightly submitted by the learned advocate for the petitioners, it nowhere lays down the law to the effect that the party is totally debar....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of basic jurisdictional facts, the assessee does not have to exhaust the available statutory remedy before seeking a writ and the High Court can stay assessment proceedings at its inception. We have no hesitation in expressing our agreement with the said ruling of the Madras High Court. In fact, the law in that regard is well settled by the various decisions of the Supreme Court which include the rulings in the matters of State of U.P. v. Mohammad Nooh, AIR 1958 SC 86 and Whirlpool Corporation v. Registrar of Trade Marks, AIR 1999 SC 22. In Mohammad Nooh's case, AIR 1958 SC 86, it was held by the apex court that: "If an inferior court or Tribunal of first instance acts wholly without jurisdiction or patently in excess of jurisdiction or manifestly conducts the proceedings before it in a manner which is contrary to the rules of natural justice and all accepted rules of procedure and which offends the superior court's sense of fair play the superior court may, we think, quite properly exercise its power to issue the prerogative writ of certiorari to correct the error of the court or Tribunal of first instance even if an appeal to another inferior court or Tribunal was ava....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vit-in-reply filed by the Assistant Commissioner of Income-tax in these writ petitions discloses a statement to the effect that his predecessor had reasons to believe that the assessee-company had suppressed the purchases, i.e., direct cost on export of trading goods and increased the profits and thereby had claimed excess deduction under section 80HHC and the petitioners had failed to disclose fully and truly all material facts necessary for assessment by not submitting the supporting documents or invoices to substantiate the details of purchases and also supporting documents with regard to the trading goods which had resulted into escapement of income during the assessment. A bare reading of the reasons in support of the notice disclose that the conclusion regarding escapement of the income was on the basis that non-disclosure of the invoice-wise details of purchases of trading goods exported and the failure to co-relate the trading export sales with invoice-wise purchase of trading goods exported, whereas the affidavit-in-reply claims non-disclosure of the materials in support of such details. In other words, the details were in fact disclosed by the petitioners and, therefor....