9911796707
TMI Blog2003 (11) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... s waive service in all the aforesaid writ petitions. By these present petitions, the petitioners seek to challenge the action on the part of respondent No.1 in relation to issuance of notices dated January 28,2003, under section 148 of the Income-tax Act, 1961 hereinafter called the said Act ), and the accompanying reasons recorded for the same seeking to reassess the income for the assessment years 1998-99, 1999-2000 and 2000-2001 by reopening the original assessment orders dated December 27, 2000, March 8, 2002 and April 30, 2002, respectively. The legality and validity of the said notices and the reasons appended thereto are sought to be challenged primarily on the ground that the action on the part of respondent No.1 in issuance of the said notice is ex facie illegal and without jurisdiction, and the same is ex facie revealed from the reasons appended to the said notice. The notice is also challenged on various other grounds. At the outset, the learned advocate appearing for the respondents, has raised a preliminary objection regarding non-maintainability of the petitions on the ground that the same are premature inasmuch as the petitioners have efficacious alternative r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing factors: (i) that the High Court had taken the view that the appellant could have taken all objections in their replies to the notices and that, therefore, at that stage, the writ petition was premature. (ii) that counsel appearing for the appellant had brought to the notice of the apex court that the impugned notices related to seven assessment years and that during the pendency of the appeals before the apex court, the assessment for two years, i.e., 1995-96 and 1996-97, was completed against which the appeals were filed before the appellate authority, however, the notices relating to the other five assessment years, viz., 1992-93, 1993-94, 1994-95, 1997-98 and 1998-99, were the subject matter of the appeals before the apex court. A plain reading of the decision of the apex court in GKN's case [2003] 259 ITR 19 would, therefore, disclose that it had refused to interfere in the order of the High Court of Delhi dismissing the writ petition on the ground that the same was premature as the petitioners had approached the High Court immediately on receipt of the notice without availing of an opportunity of filing the reply and the objections to the notice. Simultaneous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application of mind on the part of the authorities before invoking powers under section 148 of the said Act. He further submitted that the decision of the Constitutional Bench of the apex court has dearly ruled that when the authority acts without jurisdiction compelling a party to follow lengthy proceedings and to face unnecessary harassment at the instance of such an authority, then in such a case, it can be a fit case for invoking writ jurisdiction and for issuance of appropriate writ for quashing such proceedings right in the beginning thereof. He has further submitted that the decision of the apex court in GKN's case [2003] 259 ITR 19 does not lay down the law to the effect that the jurisdiction of the High Court under article 226 of the Constitution of India is barred to entertain such matters unless the parties approach the Assessing Officer with their replies and objections on receipt of the notice under section 148 of the said Act. The apex court in Calcutta Discount Co. Ltd. [1961] 41 ITR 191, while dealing with matters relating to notice which was issued under section 34 of the Indian Income-tax Act, 1922, and dealing with the point of jurisdiction of the High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice and thereupon the Assessing Officer has to dispose of the same by passing a speaking order. At the same time referring to the facts of the case in Caprihans India Ltd. [2004] 266 ITR 566 (Bom), the Division Bench proceeded to observe that: it is true that the assessee should have filed its return pursuant to the notice under section 148 and, on that basis, the assessee should have sought reasons for issuing such notice as laid down by the Supreme Court in GKN Driveshafts (India) Ltd. v. ITO [2003] 259 ITR 19. That was not done. We would have rejected the petition on this ground. However, in the peculiar facts and circumstances of this case, we are not inclined to dismiss the petition in limine because the reasons now disclosed by the Assessing Officer, on the face of it, show that there is nothing in the reasons to indicate failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment It was further observed that: the court finds ex facie that the Assessing Officer has sought to reopen the assessment on certain erroneous assumptions. It is well settled that no judgment can be read as a statute. Every decision is an author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the factual aspect may be necessary. In that case, certainly primarily the assessee will have to approach the Assessing Officer. That does not mean that the assessee is invariably bound to approach the Assessing Officer in each and every case. There can be the cases, like the one in hand, where he may be entitled to approach the court directly under article 226 of the Constitution of India. The Madras High Court in L.V. Veeri Chettiar v. STO [1970] 26 STC 579; AIR 1971 Mad 155, has held that when a taxing authority acts despite the absence of basic jurisdictional facts, the assessee does not have to exhaust the available statutory remedy before seeking a writ and the High Court can stay assessment proceedings at its inception. We have no hesitation in expressing our agreement with the said ruling of the Madras High Court. In fact, the law in that regard is well settled by the various decisions of the Supreme Court which include the rulings in the matters of State of U.P. v. Mohammad Nooh, AIR 1958 SC 86 and Whirlpool Corporation v. Registrar of Trade Marks, AIR 1999 SC 22. In Mohammad Nooh's case, AIR 1958 SC 86, it was held by the apex court that: If an inferior court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id Act was made by the said orders dated December 27, 2000, March 8, 2002 and April 30, 2002, however, the petitioners had not filed invoice-wise details of purchases of trading goods exported and did not correlate the trading export sales with invoice-wise purchase of trading goods exported and thus suppressed the purchases, i.e., the direct cost on the export of trading goods and had increased the profits and hence sought the deduction under section 80HHC in respect of export of trading goods which resulted in escapement of income. The affidavit-in-reply filed by the Assistant Commissioner of Income-tax in these writ petitions discloses a statement to the effect that his predecessor had reasons to believe that the assessee-company had suppressed the purchases, i.e., direct cost on export of trading goods and increased the profits and thereby had claimed excess deduction under section 80HHC and the petitioners had failed to disclose fully and truly all material facts necessary for assessment by not submitting the supporting documents or invoices to substantiate the details of purchases and also supporting documents with regard to the trading goods which had resulted into escapemen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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