1986 (1) TMI 73 - HC - Income Tax

Summary

Issues:
1. Impugned notices issued under section 147/148 of the Income-tax Act, 1961 for different assessment years.
2. Jurisdiction of the impugned notices in light of disclosure of material facts and assessment of income.
3. Validity of impugned notices under section 147(a) and potential applicability of section 147(b) read with section 153(3)(ii) of the Act.

Analysis:
1. The judgment addresses two Civil Writ Petitions challenging notices issued under section 147/148 of the Income-tax Act for different assessment years. The petitioner received compensation for acquired lands, leading to disputes and enhanced compensation orders. The impugned notices were issued after obtaining the Commissioner's sanction, alleging non-disclosure of income and interest spread over multiple years. The petitioner argued that returns were filed, income accrued post-judgment, and non-disclosure was not deliberate. The court consolidated both petitions for a common order.

2. The jurisdiction of the impugned notices was contested based on the petitioner's timely filing of returns, the nature of income, and the assessment orders. The petitioner's counsel argued that the notices lacked jurisdiction as the income was assessed as that of the Hindu undivided family, not the individual petitioner. The court noted discrepancies in the Department's contentions and found the notices lacked merit due to the nature of income and filing status. The court cited precedents and held that non-disclosure of pending legal proceedings did not warrant action under section 147(a).

3. The judgment delved into the validity of the notices under section 147(a) and the potential applicability of section 147(b) read with section 153(3)(ii) of the Act. The respondent's counsel sought to sustain the notices under section 147(b) citing case law. The petitioner's counsel countered, highlighting procedural deficiencies and statutory provisions. The court, however, focused on the Appellate Assistant Commissioner's order setting aside the assessment, directing income attribution to specific assessment years. The petitioner conceded compliance with the direction under section 148 read with section 150, suggesting the issuance of fresh notices for compliance. Ultimately, the court allowed the petitions, quashing the impugned notices without costs.