2009 (3) TMI 157 - HC - Income Tax

Notice for re assessment - writ petition for challenging the notice under section 147 of the Income-tax Act 1961 assessee claimed that notice has been issued beyond the maximum period of six years fixed under section 149(b) of the Act therefore the notice is ex facie bad in law. According to him the notice has been issued for the assessment year 2002-03 held that - It is correct to say that if the issuance of notice or passing of any order is absolutely without jurisdiction alternative remedy cannot be held to be bar but when factually we find that the period of six years under section 149(b) of the Act is not expired we cannot hold and say that the issuance of notice on account of escapement of assessment is absolutely beyond jurisdiction - Alternatively right to challenge the decision of the Assessing Officer by the assessee is composite in nature which includes the nature of subjective satisfaction by the Joint Commissioner. Therefore at this stage we do not find any reason to interfere with the notice writ petition dismissed

Summary

Issues:
Challenge to notice under section 147 of the Income-tax Act, 1961 issued for the assessment year 2002-03 beyond the six-year period fixed under section 149(b) of the Act.

Analysis:
The petitioner contested the notice dated February 27, 2009, under a writ petition, arguing that it was issued beyond the six-year period specified under section 149(b) of the Income-tax Act, 1961. The High Court noted that by March 31, 2009, the six-year period had not elapsed. The petitioner relied on the case of Sesa Goa Ltd. v. Joint CIT but the court found the present case factually distinguishable from the cited case where the ten-year period had already expired. The Revenue's counsel referred to the Supreme Court's decision in GKN Driveshafts (India) Ltd. v. ITO, emphasizing the importance of the noticee filing a return and seeking reasons for the notice, which the Assessing Officer must provide within a reasonable time for the noticee to file objections. The court dismissed the civil appeals in the case, directing the appellate authority to expedite the appeals process.

In another reference, the petitioner cited the case of Sunil Kumar Jain v. ITO, where the Division Bench of the High Court held that upon receiving a notice under section 148 of the Act, the proper course of action is to file objections, including those related to jurisdiction. The court clarified that if an objection pertains to jurisdiction and is apparent on the face of the notice or reasons, the assessee is not obligated to await an order from the Assessing Officer. The petitioner also relied on the case of S. K. Traders v. Additional Commissioner, Trade Tax to establish that in matters of natural justice, an alternative remedy is not a bar.

The court addressed the petitioner's argument that only the Joint Commissioner can allow the Assessing Officer to issue a notice regarding an escapement of assessment under section 147 of the Act, and the challenge can only be made against the Assessing Officer's order arising from the Joint Commissioner's satisfaction. However, the court emphasized the importance of understanding the situation without prematurely challenging the issue. It noted that the petitioner had filed a reply and return, entitling them to receive reasons for the notice and file objections, with the assessing authority bound to provide reasons and the petitioner retaining the right to challenge the order. The court concluded that since the six-year period under section 149(b) had not expired, the notice was not beyond jurisdiction. It allowed the petitioner to file objections after obtaining reasons for the notice, without interfering with the notice at that stage.

The judgment was agreed upon by both judges, with no costs imposed.