1998 (12) TMI 22 - HC - Income Tax

Summary

Issues Involved:
The petitioner sought a writ of prohibition against the respondent for reassessment for the assessment year 1989-90 under section 148 of the Income-tax Act, 1961.

Assessment and Reassessment:
The petitioner, a non-resident partner in certain firms, filed returns for the assessment year 1989-90, which were processed under section 143(1)(a) of the Income-tax Act, 1961. However, the respondent issued a notice for reassessment under section 148, alleging escaped assessment, which the petitioner challenged through a writ petition.

Jurisdiction of Assessing Officer:
The petitioner argued that the respondent lacked jurisdiction to issue the notice under section 148 as per section 182(3) of the Act, contending that the income of the petitioner through the firms is not assessable from him personally but only from the firms. The petitioner relied on a Division Bench decision to support this argument.

Legal Interpretation and Conclusion:
The court examined sections 147, 148, and 182 of the Income-tax Act, emphasizing that the Assessing Officer must have reason to believe that income has escaped assessment before issuing a notice under section 148. In this case, as per section 182(3), the tax on the petitioner's share in the firms' income is to be assessed on the firms, not on the petitioner personally. Therefore, the court found the notice issued under section 148 to be illegal and without jurisdiction, ultimately allowing the writ petition.