1977 (4) TMI 27 - HC - Income Tax

Summary

Issues Involved:

1. Validity of notices u/s 148 of the Income-tax Act, 1961.
2. Limitation period for issuing notices u/s 148.
3. Interpretation of the term "issued" in section 149.
4. Existence of reasons for belief that income had escaped assessment.
5. Availability of alternative remedies under the Income-tax Act.

Summary:

1. Validity of Notices u/s 148:
The petitioner challenged the validity of notices issued u/s 148 for the assessment years 1965-66, 1966-67, and 1969-70, arguing that they were issued without jurisdiction and beyond the period of limitation prescribed by section 149(1)(b).

2. Limitation Period for Issuing Notices u/s 148:
The court noted that the notices fell under section 147(b) and thus the period of limitation was four years. For the assessment years 1965-66 and 1966-67, the notices were issued beyond the prescribed period and were quashed. However, for the assessment year 1969-70, the notice was issued within the limitation period.

3. Interpretation of the Term "Issued" in Section 149:
The petitioner argued that the term "issued" in section 149 meant "served," relying on the Supreme Court decision in Banarsi Debi v. Income-tax Officer. The court distinguished the provisions of the 1922 Act from the 1961 Act, noting that while the former prescribed limitation for the service of notice, the latter prescribed limitation for the issuance of notice. The court held that in the context of the 1961 Act, the term "issued" should be given its natural meaning and not be equated with "served."

4. Existence of Reasons for Belief that Income had Escaped Assessment:
The petitioner contended that there was no new information justifying the reassessment and that it was merely a change of opinion by the Income-tax Officer. The court did not delve into this issue due to the formidable objection raised by the revenue that the petitioner had alternative remedies available under the Income-tax Act.

5. Availability of Alternative Remedies under the Income-tax Act:
The court emphasized that under the amended provisions of Article 226 of the Constitution, it was precluded from entertaining the petition if any other remedy was provided by or under any other law for the time being in force. The petitioner had the opportunity to raise the issue before the assessing authority, the Appellate Assistant Commissioner, and the Appellate Tribunal.

Conclusion:
C.W.P. Nos. 2808 and 2809 of 1975 were allowed, quashing the notices for the assessment years 1965-66 and 1966-67. C.W.P. No. 2810 of 1975 was dismissed, upholding the notice for the assessment year 1969-70, but without costs.