1971 (2) TMI 12 - HC - Income Tax

Notices under section 148 proposing to reopen the assessment - petitioner moved this Court in writ jurisdiction after a lapse of about five years - delay and laches on part of petition - petitioner cannot be granted writ as it would undoubtedly cause prejudice to the respondents

Summary

Issues:
1. Jurisdiction of the Income-tax Officer to issue notices for reopening assessment.
2. Maintainability of the writ petition based on delay.

Analysis:

Jurisdiction of the Income-tax Officer:
The petitioner sought to quash notices under section 148 of the Income-tax Act, 1961, proposing to reopen assessments for the years 1957-58, 1958-59, and 1959-60. The main contention was that the impugned notices were issued without jurisdiction as the conditions precedent for such notices were allegedly absent. The Supreme Court's decisions in various cases established that the Income-tax Officer must have reasons to believe that the income was under-assessed due to the assessee's failure to disclose material facts. The question in this case was whether these conditions were met. The respondent claimed that undisclosed businesses in benami names led to under-assessment, while the petitioner denied these allegations. The court needed to determine if the reasons recorded justified issuing the notices under section 148 for reassessment.

Maintainability of the Writ Petition:
A preliminary objection was raised regarding the delay in filing the writ petition after the issuance of notices in 1965. The petitioner moved the court in 1970, almost five years later. The court noted the prolonged delay and lack of written objections by the petitioner during the assessment proceedings. The petitioner's argument of assurance by the Income-tax Officer to drop the proceedings was not substantiated. The court discussed the impact of delay on different types of writs, citing relevant judgments. Ultimately, the court found the delay prejudicial to the respondents, leading to a dismissal of the petition based on the petitioner's negligence and laches.

In conclusion, the court discharged the rule, finding the petition failed due to the delay in seeking judicial intervention. The court did not delve into the merits of the case, refraining from expressing any opinion on the contentions made by the petitioner. No costs were awarded in this matter.