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TMI Blog2019 (4) TMI 1826X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 148 (2) of the Act (Annexure P-5) to opine that income has escaped assessment for the Assessment Year 2011-12 and 2012-13, respectively by the respondent No.2 as without jurisdiction. 3. Learned counsel appearing for the petitioners would argue that re-assessment notice is required to have prior sanction under Section 151 (1) by satisfying the condition prescribed in the said provision, however, proper reasons to believe for issuance of notice being absent in both the cases the sanction under Section 151 of the Act and the consequent notices are illegal. 4. Learned counsel would further argue that there is only reason to suspect that income has escaped without there being any foundational fact or tangible material withheld by the petitioner at the time of assessment. Mere suspect that the companies in question were paper companies by itself is insufficient to re-open the assessment unless the Assessment Officer had further information that these companies were non-existent after making further enquiries into the matter. Learned counsel would next submit that the petitioners having made true and full disclosure at the time of assessment, the reasons recorded and the consequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital, share premium and share application money during A.Y. 2011-12, 2012-13 & 2016-16 by the three companies namely; M/s Desire Procon Pvt. Ltd.; M/s Aprajita Enclave Pvt. Ltd.; and M/s Bholanath Vanijya Pvt. Ltd. was not available during the scrutiny proceedings made earlier, but was found during survey under Section 133A of the Act and, thus, the assessee has failed to disclose fully and truly on material facts during assessment made earlier. 10. The law as to when exercise of power to record reasons under Section 151 (1) read with Sections 147 & 148 (2) of the Act for issuance of re-assessment of notice under Section 148 (1) would be treated as a valid exercise of power has been dealt with by the Supreme Court, time and again. 11. In Assistant Commissioner of Income-Tax v. Rajesh Jhaveri Stock Brokers Pvt. Ltd. [2007] 291 ITR 500 (SC) the Supreme Court spelt out the twin requirements which had to be satisfied as a sine qua non for a valid reassessment notice: "firstly the AO must have reason to believe that income profits or gains chargeable to income tax have escaped assessment, and secondly he must also have reason to believe that such escapement has occurred by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax Officer and examine whether there was any material available on the record from which the requisite belief could be formed by the Income-tax Officer and further whether that material had any rational connection or a live link for the formation of the requisite belief." 13. In Income Tax Officer, Calcutta v Selected Dalubrand Coal Co. Pvt. Ltd. (1997) 10 SCC 68), the Supreme Court held as follows: "At the stage of the issuance of the notice, the only question is whether there was relevant material, as stated above, on which a reasonable person could have formed the requisite belief. Since we are unable to say that the said letter could not have constituted the basis for forming such a belief, it cannot be said that the issuance of notice was a invalid. Inasmuch as, as a result of our order, the reassessment proceedings have now to go on, we do not and we ought not to express any opinion on merits." 14. In Phool Chand Bajrang Lal (supra) the Supreme Court has held that the Assessment Officer may start reassessment proceedings either because some fresh facts had come to light which were not previously disclosed or some information with regard to the facts previously disclos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been taken itself contains a mechanism for redressal of grievance still holds the field. Therefore, when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation. 16. In the instant case, the Act provides complete machinery for the assessment/ reassessment of tax, imposition of penalty and for obtaining relief in respect of any improper orders passed by the Revenue Authorities, and the assessee could not be permitted to abandon that machinery and to invoke the jurisdiction of the High Court under Article 226 of the Constitution when he had adequate remedy open to him by an appeal to the Commissioner of Income Tax (Appeals). The remedy under the statute, however, must be effective and not a mere formality with no substantial relief. In Ram and Shyam Co. v. State of Haryana {(1985) 3 SCC 267} this Court has noticed that if an appeal is from "Caesar to Caesar's wife" the existence of alternative remedy would be a mirage and an exercise in futility." 17. Even at the inception the writ petition was only for questioning the notice under Section 148 (1), the sanction under Section 151 (1) and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e matter as the Writ Petition was filed without even reply to the show cause notice. This Court further observed as follows: "3....In the circumstances, we could have dismissed these civil appeals only on the ground of failure to exhaust statutory remedy, but for the fact that huge investments involving the large number of industries is in issue." 15. We are fortified by the decision of this Court in Indo Asahi Glass Co. Ltd. v. ITO, (2002) 10 SCC 444, wherein the assessee had approached this Court against the judgment and order of the High Court which had dismissed the Writ Petition filed by the assessee wherein challenge was made to the show cause notice issued by the Assessing Authority on the ground that alternative remedy was available to the assessee. This Court concurred with the findings and conclusions reached by the High Court and dismissed the said appeal with the following observations: "5. This and the other facts cannot be taken up for consideration by this Court for the first time. In our opinion, the High Court was right in coming to the conclusion that it is appropriate for the appellants to file a reply to the show-cause notice and take whatever defence is op ..... X X X X Extracts X X X X X X X X Extracts X X X X
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