2001 (8) TMI 91 - HC - Income Tax

Summary

Issues Involved:
Challenge to show-cause notice under sections 154/155 of the Income-tax Act, 1961 for assessment year 1990-91.

Analysis:
The petitioner challenged a show-cause notice issued by authorities under sections 154/155 of the Income-tax Act, 1961, contending that the authorities lacked competence, authority, and jurisdiction to initiate proceedings for the assessment year 1990-91. The petitioner argued that the notice was invalid, illegal, and arbitrary, issued without proper application of mind, and the alleged mistake was not apparent on the record but debatable, not meeting the conditions precedent for jurisdiction. The petitioner also claimed that since the assessment for the year in question was completed, the authorities had no right to issue the notice. Dr. Pal relied on a judgment to support the contention that the notice should be quashed.

The respondents, on the other hand, explained that the notice was issued to verify certain amounts noted by the auditor in the return for the assessment year, which appeared to be related to earlier years without specific timing of ascertainment. They argued that the notice was issued in good faith to ascertain the admissibility of the amounts mentioned by the auditors. The respondents contended that the Assessing Officer had jurisdiction to issue the notice, and the petitioner had ample opportunity to explain their case and avail alternative remedies provided by law. They cited judgments to support their argument that the notice should not be quashed if there was no irregularity or lack of jurisdiction.

Upon considering the facts and circumstances, the judge opined that the cited judgment by Dr. Pal was not relevant to the case. The judge found that the authorities had issued a show-cause notice, allowing the petitioner to present their case and records, indicating a fair opportunity for rectification proceedings. The judge concluded that there was no irregularity or illegality in the issuance of the notice, directing the petitioner to appear before the authorities for a hearing and a reasoned order within a specified timeframe. The judge decided not to interfere at that stage, emphasizing the petitioner's opportunity to present their case before the authorities.

Therefore, the application challenging the show-cause notice under sections 154/155 of the Income-tax Act, 1961 for the assessment year 1990-91 was disposed of, with the petitioner directed to appear before the authorities for further proceedings.