2015 (3) TMI 575 - HC - Income Tax

Revision u/s 263 - petitioner had prayed for cancellation of the show-cause notice dated February 3, 2014, issued under section 263 - whether said Commissioner had neither called for, examined nor considered the assessment proceedings before putting his signature in approval of the draft notice which notice was then issued to the petitioner also under his signature? - Held that - It appears from the records produced, during August, 2013, the DCIT, HQRS-2, Kolkata, writing on behalf of the said Commissioner to the Joint Commissioner of Income-tax, Range 4, 5 and 6, Kolkata, had requested that office to submit the list of cases in which review under section 263 of the 1961 Act had to be completed on or before March 31, 2014. It is, thereafter, 29 files, one of which relates to the appellant-petitioner, were received by the office of said Commissioner on January 29, 2014. Then a draft notice under section 263 of the 1961 Act was put up for signature of the said Commissioner. The said Commissioner had put his signature on the order sheet for putting up the draft notice under section 263 of the 1961 Act as well as issued the said show-cause notice as evident from annexure P2 to the writ petition appended to the application for stay. We hold that having put his signature in approval of the draft notice put up with the file and having issued the said show-cause notice dated February 3, 2014, the same is sufficient compliance by the said Commissioner in the facts and circumstances, discussed above. The Commissioner had complied with the provisions contained in section 263 of the 1961 Act in the matter of calling for, examining the records of the assessment proceedings to consider the necessity of issuing such show-cause notice. - Decided against assessee.

Summary

Issues:
- Challenge against the judgment and order dated May 8, 2014, passed by the learned single judge in the writ petition.
- Praying for cancellation of the show-cause notice issued under section 263 of the Income-tax Act 1961.
- Mandamus commanding respondent No. 2 to supply the satisfaction recorded before issuance of the show-cause notice.

Analysis:
The appeal was filed against the judgment and order dismissing the writ petition challenging the show-cause notice issued under section 263 of the Income-tax Act 1961. The petitioner sought cancellation of the notice and mandamus to supply the recorded satisfaction. The learned single judge observed that section 263 does not require separate recording of satisfaction before issuing the notice. The judge found the notice legal and valid as it indicated the error in the Assessing Officer's order. The petitioner was advised to seek remedy through appeal under section 253 of the Act.

The appellant argued that the Commissioner did not call for or examine the assessment records, rendering the notice invalid. The relevant portion of section 263 was cited to support the argument. However, the court found that the Commissioner had complied with the provisions by examining the records and issuing the notice. The judgment in various cases was considered, emphasizing the need for objective justifiability of the Commissioner's decision under section 263.

Further, the court examined the judgments cited by the appellant, including CIT v. G. M. Mittal Stainless Steel P. Ltd. and CIT v. Karam Chand Thapar and Sons Ltd. The court emphasized the necessity of careful consideration before passing an order under section 263. The judgment in Russell Properties Pvt. Ltd. v. A. Chowdhury was also considered, highlighting the requirement of objective conditions for the exercise of power by the Commissioner.

In conclusion, the court dismissed the appeal and application, returning the records to the appellant's advocate without any costs. The judgment emphasized the need for objective justifiability and careful consideration in passing orders under section 263 of the Income-tax Act 1961.