9911796707
TMI Blog1998 (8) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... It was stated at the Bar that not only assessment order pursuant to the impugned notice was passed subject to the result of this case but the appeal preferred by the petitioner against the said order has also since been dismissed whereafter it has filed second appeal before the Income-tax Appellate Tribunal, Patna Bench, which is pending disposal. Counsel for the petitioner has rightly, if I may say so, pressed this writ petition even though the assessment order has been passed and the appeal has also been dismissed in the meantime, because those orders have been passed subject to the result of this case, and in the event of the impugned notices being struck down by this court, the assessment order will automatically fall to the ground. However, in view of the pendency of the appeal before the Appellate Tribunal I propose to confine myself to the validity of the impugned notice under section 148 of the Act, which indeed is the scope of this writ petition, although counsel for the petitioner endeavoured to go into the facts of the case and assail the documents on the basis of which the assessment has been reopened and notice has been issued. Any observation made hereinafter with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contradictory to the certificate granted by the same authority, i.e., Executive Engineer, CPWD, Ranchi Central Division, on October 8, 1986, which had been filed along with the return for the assessment year 1986-87 and on the basis of which the aforesaid assessment order dated November 28, 1986, had been passed. The petitioner also filed xerox copies of some of the bills to substantiate its point. The Assessing Officer, however, issued the impugned notice under section 148 of the Act on March 12, 1993. The petitioner on receipt of the notice again submitted its objection on April 7, 1993. The Assessing Officer apparently did not accept the contentions and issued notice under section 142(1) of the Act on September 1, 1993. Mr. A. Moitra, learned counsel for the petitioner submitted that the petitioner had made a full and true disclosure of its income in its return which was supported by documents and the assessment order was passed after hearing and necessary enquiry under section 143(3) of the Act. Having disclosed the amount in question as secured advance it cannot be said that it had concealed its income or furnished inaccurate particulars of the income for which a proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished details of payment and recoveries along with his letter dated November 2, 1993, copy whereof has been marked annexure-A to the counter affidavit. It was only thereafter that the show-cause notice dated November 3, 1992, was issued to the petitioner, vide annexure-4 to the petition. It would thus appear that the contents of the certificate dated October 8, 1986, on the one hand, and the two letters dated October 29, 1992 and November 2, 1992, on the other, are diametrically opposite to each other. In writ jurisdiction the High Court does not sit as a court of appeal and in the writ petition arising out of notice under section 148 of the Act it is not supposed to go into the sufficiency or otherwise or the question of correctness of the materials leading to the notice. The court has merely to see whether there was any material before the Assessing Officer on the basis of which he came to form a reasonable belief that income had escaped assessment. Section 147 of the Act as it stood at the relevant time read as follows : "147. Income escaping assessment.--If-- (a) the Assessing Officer has reason to believe that, by reason of the omission or failure on the part o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the meaning of section 147(a) of the Act. This is what Explanation 2 to section 147 provides. The notice can also be justified under section 147(b) of the Act. Clause (b), as noticed above, empowers the Assessing Officer to reassess the income which he reasonably believes to have escaped assessment for the particular assessment year even in cases where there has been no omission on the part of the assessee to either file a return under section 139 or to make true and full disclosure of all material facts if he is in possession of some information and on the basis of which he forms such belief. Mr. Moitra submitted that if this court were to hold that the reassessment was under section 147(b), the show-cause notice would be barred by limitation as per the provisions by section 149 as it stood at the relevant time before its amendment by the Direct Tax Laws (Amendment) Act, 1987, with effect from April 1, 1989. In view of the observations in the earlier paragraphs it cannot be definitely said that there was full and true disclosure of material facts and, in any view, it is for the Assessing Officer to go into the related questions at the stage of reassessment proceedings in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther observed that mere production of the books of account or other evidence from which material facts could with due diligence have been discovered does not necessarily amount to disclosure within the meaning of section 34(1) of the Indian Income-tax Act, 1922, corresponding to section 147(a) of the Income-tax Act, 1961, as it stood at the relevant time. To the same effect is the decision of this court in Durga Sharan Udho Prasad v. CIT [1976] 103 ITR 270, which was the second decision relied upon by Mr. Moitra. The decisions in ITO v. Lakhmani Mewal Das [1976] 103 ITR 437 (SC) and Ganga Saran and Sons P. Ltd. v. ITO [1981] 130 ITR 1 (SC), are also of no avail to the petitioner. While interpreting the expression "has reason to believe" occurring in Section 147(a) of the Act, as it stood at the relevant time their Lordships held that although the court could not investigate into the adequacy or sufficiency of the reasons which have weighed with the Assessing Officer in coming to the belief, there must be some nexus or live link between the material coming to the notice of the Assessing Officer and the formation of his belief. If there is no rational and intelligible nexus betw ..... X X X X Extracts X X X X X X X X Extracts X X X X
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