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Issues:
Challenge to notice under section 148 of the Income-tax Act, 1961 for reassessment of income for the assessment year 1979-80. Detailed Analysis: The petitioner, a firm engaged in civil construction contracts, challenged a notice dated March 14, 1990, issued by the Assistant Commissioner of Income-tax under section 148 of the Income-tax Act, 1961, for reassessment of income for the assessment year 1979-80. The petitioner's income for the relevant year was assessed at Rs. 20,690, but it had claims pending against another party for construction work done. An arbitrator awarded the petitioner a sum, which was challenged in court. The High Court allowed part of the appeal, and the Supreme Court later granted interest to the petitioner for the period allowed by the trial court. The petitioner's assessment for a subsequent year included the entire amount received based on the award and court judgment. Despite this, the Revenue insisted on pursuing the notice challenging the assessment for 1979-80. The main argument raised by the petitioner's counsel was that the notice was issued erroneously, as there was no failure to disclose material facts or income escapement for the relevant assessment year. The counsel contended that the notice was issued after eight years without proper approval, as required by law. Citing the decision in CIT v. Hindustan Housing and Land Development Trust Limited [1986] 161 ITR 524, the counsel argued that the disputed amount cannot be deemed as income accrued until the final resolution of the dispute. The Revenue claimed that the petitioner failed to disclose the full value of work done, alleging inaccurate particulars and income concealment. However, the court noted that the petitioner's claim was disputed, and the exact amount was uncertain until the legal proceedings concluded. The court rejected the argument that maintaining accounts on a mercantile system automatically deems disputed amounts as income, citing the Hindustan Housing case where a similar issue was addressed. The court found in favor of the petitioner, setting aside the notice dated March 14, 1990, as it was deemed unsustainable in law. The judgment allowed the writ petition without any order as to costs. In a concurring opinion, another judge agreed with the decision to set aside the notice, concluding the case with no further orders regarding costs.
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