9911796707
TMI Blog2001 (11) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 148 of the said Act and pass a final order but the same shall not be given effect to or communicated to the petitioner till January 15, 1995, or until further orders of this court whichever is earlier. The directions for affidavits were also given and the affidavits have been filed and the matter has come before this court for final hearing. The facts of the case briefly are as follows: The respondents issued five notices all dated July 29, 1994, under section 148 of the said Act for reopening the assessment under section 147 of the said Act for the assessment years 1985-86 to 1989-90. The petitioner is carrying on its business of commissioning of plant for treatment of industrial wastage, effluents and for softening of w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 91 (SC); AIR 1961 SC 362, and contended that the conditions precedent to the exercise of jurisdiction under section 34 of the Indian Income-tax Act, 1922, did not exist. Therefore, the Income-tax Officer had no jurisdiction to issue the impugned notices under section 34 in respect of the assessment years after the expiry of four years. He also relied upon another judgment reported in Indra Co. Ltd. v. ITO [1971] 80 ITR 559 (Cal), and contended that there was no failure to disclose any material facts for the purpose of the assessment, so far as the loss arising from the bonus shares was concerned, section 147(a) could not be invoked and the notice must be struck down. His further contention that mere change of opinion cannot be a valid grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the reasons have no rational connection or relevant bearing on the formation of the belief. Rational connection postulates that there shall be a direct nexus or live link between the material coming to the notice of the Income-tax Officer and the formation of his belief that there has been escapement of income of the assessee from assessment in the particular year because of his failure to disclose fully and truly all material facts. In support of such submission, he relied upon a judgment reported in ITO v. Lakhmani Mewal Das [1976] 103 ITR 437 (SC). He also relied upon another judgment reported in Panchanan Hati v. CIT [1978] 115 ITR 336 (Cal). He also contended that the notice itself was bad in law, there was no reason to carry on with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion has also been reaffirmed by the Supreme Court in the case of Builders Associations of India v. Union of India [1994] 209 ITR 877. Under these facts and circumstances of this case, he submitted that the petitioner has failed to disclose truly and faithfully before the Income-tax Officer. He also relied upon another judgment reported in Laxmanrao Narayanrao Charmalkar v. Appropriate Authority [1996] 220 ITR 537 (Guj), and submitted that the petitioner has enough opportunity to explain his case before the Assessing Officer. He further contended in these circumstances that the Assessing Officer has reason to believe that the income has escaped assessment and as such the notice has been issued by the Assessing Officer and accordingly he subm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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