2002 (12) TMI 648 - HC - Income Tax

Summary

Issues Involved:
1. Maintainability of the writ petitions.
2. Legality of the notice issued under section 148 of the Income-tax Act, 1961.
3. Requirement of sanction under section 151 of the Income-tax Act, 1961.
4. Supply of the copy of the sanction order to the petitioner.

Issue-wise Detailed Analysis:

1. Maintainability of the Writ Petitions:
The respondent's counsel raised preliminary objections regarding the maintainability of the writ petitions, arguing that the petitioner had alternative statutory remedies available. The petitioner had already made a representation against the notice, which was pending before the Assessing Officer. The respondent emphasized that the petitioner could appeal before the Commissioner of Income-tax (Appeals) and further to the Income-tax Appellate Tribunal and the High Court under sections 250, 252, and 260A of the Income-tax Act, respectively. The court agreed with the respondent's contention, stating that writ jurisdiction under Article 226 should only be exercised under exceptional circumstances and not when alternative remedies are available.

2. Legality of the Notice Issued Under Section 148:
The petitioner challenged the notice dated 8-1-2002 issued under section 148 of the Income-tax Act on the grounds that it was without jurisdiction, illegal, and inoperative. The petitioner argued that the notice was issued without the necessary sanction as required under section 151 and in contravention of Article 265 of the Constitution of India. The court examined the provisions of sections 147 and 148, noting that the Assessing Officer must have reason to believe that income chargeable to tax had escaped assessment to issue such a notice. The court found that the notice was issued following the procedure laid down in section 148 after obtaining the necessary sanction.

3. Requirement of Sanction Under Section 151:
The petitioner contended that the sanction for issuing the notice under section 148 was accorded by the Additional Commissioner of Income-tax, who was not authorized under section 151. The petitioner argued that only a Joint Commissioner could grant such sanction. The court examined section 151 and concluded that it does not disqualify a higher officer, such as the Additional Commissioner, from according the sanction. The provision ensures that the sanction should not be accorded by an officer below the rank of Joint Commissioner. Therefore, the court held that the sanction accorded by the Additional Commissioner was in accordance with section 151 and not contrary to its provisions.

4. Supply of the Copy of the Sanction Order:
The petitioner argued that the reasons for reassessment and the sanction order should be supplied to them. The court referred to the relevant judgments and concluded that there was no legal requirement to supply the sanction order to the petitioner before issuing the notice under section 148. The court noted that the Assessing Officer had recorded the reasons for reassessment, which were examined by the Additional Commissioner before according the sanction. The court held that the reasons for issuing the notice were sufficient and did not require interference.

Conclusion:
The court dismissed the writ petitions, stating that there was no gross violation in issuing the notice under section 148. The petitioners were granted the liberty to raise all legal and factual objections before the competent authority, which was expected to decide the objections and pass the final order in accordance with the law within two months.