2009 (10) TMI 566 - HC - Income Tax

Reassessment writ court cannot consider facts return submitted by assessee survey showing undisclosed income - Income-tax Officer (Assessing Officer) is now directed to complete the assessment/reassessment proceedings strictly in accordance with law after affording an opportunity to the assessee as contemplated in section 143(2) Notice for reassessment was valid

Summary

Issues:
Challenge to notice under section 147 of the Income-tax Act, 1961 for assessment year 1997-98.

Analysis:
The petitioner, an assessee, challenged a notice issued by the Income-tax Officer under section 147 of the Income-tax Act, 1961, for the assessment year 1997-98. The petitioner contended that the notice was issued without proper application of mind, in the absence of any assessment, and without disclosing the status of the assessee. The Revenue defended the notice and its upholding. The High Court found justification for the notice under section 147/148 based on factual material obtained during a survey at the petitioner's business premises. The Court held that there was a basis for reassessment and that the notice was validly issued.

The Court emphasized that a notice under section 147 can be challenged on limited jurisdictional grounds in writ petitions and not on factual matters. The petitioner's objections regarding the notice were deemed to lack merit. It was noted that the notice clearly mentioned the assessee's name and description, fulfilling the requirement. The Court rejected the argument that in the absence of any assessment, no notice for reassessment could be issued, stating that section 147 applies to all cases, including reassessment.

Additionally, the Court highlighted that the adequacy of reasons for issuing the notice could not be questioned unless they were found to be perverse or against the law, which was not the case here. The Court dismissed the writ petition, directing the Assessing Officer to complete the assessment/reassessment proceedings within three months, following the law and providing the assessee with an opportunity to participate. The Court also mentioned that the decisions cited by the petitioner were not applicable to the facts of this case, leading to the dismissal of the petition.

In conclusion, the High Court upheld the validity of the notice under section 147 for reassessment for the assessment year 1997-98, finding no jurisdictional error requiring intervention. The Court directed the Assessing Officer to proceed with the assessment/reassessment proceedings in accordance with the law within a specified timeline, dismissing the petition and ordering no costs to be awarded.