2002 (6) TMI 14 - HC - Income Tax

Reassessment- contention of the petitioner is that the petitioner had disclosed all material particulars of his income including his status in the return filed by him. As such there was no failure on his part to disclose fully and truly all material facts necessary for his assessment for the relevant year. In this back drop he further submits that there is no averment in the affidavit to assert that the escapement is by reason of the omission or failure on the part of the assessee to make return or to disclose fully or truly all material facts necessary for his assessment for the relevant assessment year. He therefore submits that in the absence of any averment in this behalf in the affidavit this court should legitimately presume that no reasons are recorded at least for complying with the second condition precedent required for issuing notice under section 148 of the Income-tax Act If the existence of these facts is challenged by the assessee before the court it was obligatory on the part of the Income-tax Officer to satisfy the court even on the second mandatory requirement of the section. In our view the submission is well made out. No material is to be found in the affidavit complying with this second mandatory requirement of section 148 - impugned notice under section 148 are set aside

Summary

Issues:
Challenge to notice issued under section 148 of the Income-tax Act, 1961 without recording reasons and complying with mandatory requirements.

Analysis:

The petitioner challenged a notice issued under section 148 of the Income-tax Act, 1961, for the assessment year 1986-87, alleging that the Income-tax Officer did not record reasons or comply with mandatory requirements. The petitioner requested disclosure of reasons before approaching the court. The respondents failed to produce evidence supporting the notice under section 148. The petitioner argued that the Income-tax Officer lacked material to believe income had escaped assessment, as required by law.

The court emphasized that the Income-tax Officer must establish the existence of conditions precedent for issuing a notice under section 148 when challenged by the assessee. Referring to previous judgments, the court highlighted that dismissing a petition without proper consideration is inappropriate when the party disputes the jurisdiction-conferring conditions under oath. In this case, despite a remand by the apex court, no material was presented to justify the notice under section 148.

The petitioner contended that all material particulars, including income status, were disclosed, and there was no failure to disclose necessary facts for assessment. The absence of averments in the affidavit regarding the omission or failure to disclose fully and truly all material facts further supported the petitioner's argument. The court noted the lack of material in the affidavit to meet the mandatory requirements of section 148.

Conclusion:

Considering the absence of evidence supporting the notice under section 148 and the failure to establish the necessary conditions precedent, the court quashed and set aside the impugned notice. The writ petition was allowed, and the court made the rule absolute in favor of the petitioner, with no order as to costs.