M/S Mukesh Oil Mill Private Limited, E-59, Industrial Area,Khairthal Alwar, Through Shri Anmol Kumar v. Assistant Commissioner Of Income Tax, Circle -1, Income Taxoffice, Alwar

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR S.B. Civil Writs No. 24075/2018 M/s Mukesh Oil Mill Private Limited, E-59, Industrial Area,Khairthal Alwar, Through Shri Anmol Kumar, S/o Shri Chhajuram,Aged About 54 Years ----Petitioner Versus Assistant Commissioner Of Income Tax, Circle -1, Income TaxOffice, Alwar ----RespondentConnected With M/s Mukesh Oil Mill Private Limited, E-59, Industrial Area,Khairthal Alwar, Through Shri Anmol Kumar, S/o Shri Chhajuram,Aged About 54 Years. ----PetitionerVersus Assistant Commissioner Of Income Tax, Circle-1, Income TaxOffice, Alwar. ----Respondent For Petitioner(s) : Ms. Gunjan Pathak Adv. HON'BLE MR. JUSTICE ASHOK KUMAR GAUR 01/11/2018 Order The present writ petitions have been filed by the petitionerchallenging the reassessment proceedings for the assessmentyear 2015-16 & 2016-17. Petitioner is also aggrieved by rejectionof objections filed on reopening of the case under Section 148 ofthe Income Tax Act, 1961. Counsel for the petitioner-Ms. Gunjan Pathak has submittedthat the Assistant Commissioner of Income Tax, Circle-1, IncomeTax Office, Alwar has acted in haste and without verifying thedetails provided by the ADIT (Inv.) Jaipur and Pr. DIT (Inv.)Chandigarh, issued notice under Section 148 of the Income TaxAct, 1961. Counsel for the petitioner has submitted that the respondentdid not bother to investigate that the books of accounts of thepetitioner were already duly audited by the Charted Accountantunder Section 44AB of the Income Tax Act, 1961. Counsel for the petitioner submitted that the respondents byimpugned order dt. 24[th] August, 2018 disposed of the objections,raised by the petitioner against issuance of notice under Section148 of the Income Tax Act, 1961. Counsel submitted that theimpugned order has been passed in causal manner and sincethere is no alternative and efficacious remedy open to thepetitioner, the present writ petition has been filed by invoking theextra-ordinary jurisdiction of this Court, as provided under Article226 of the Constitution of India. This Court asked learned counsel for the petitioner aboutmaintainability of the writ petition under Article 226 of theConstitution of India against the order dt. 24[th] August, 2018,rejecting the objections of the petitioner, in response to noticeissued under Section 148 of the Income Tax Act, 1961. Counsel for the petitioner has placed reliance on thefollowing judgments of the Apex Court as well as different HighCourts on maintainability of the writ petition:- 1. Jeans Knit P. Ltd. Vs. DCIT [2017] 77 Taxmann.com 176(SC). 2.Commissioner of Income Tax Vs. Shree RajasthanSyntex Ltd. (2009) 313 ITR 0231 Raj.HC. 3.Commissioner of Income Tax Vs. Shiv Ratan Soni(2008) 217 CTR 0222 Raj.HC. 4.Rajath Leasing & Finance Ltd. Vs. AssistantCommissioner of Income Tax (1995) 129 CTR 0377 Guj.HC.5.harikishna Sunderlal Virmani Vs. Deputy Commissionerof Income Tax (2017) 394 ITR 0146 (Guj.). 6.ACIT Vs. Dhariya Construction Co. (2010) 328 ITR 515. 7.BIR Arina Enterprises Pvt. Ltd. Vs. Income Tax Officer(1993) 204 ITR 0258 JKHC. 8.Pr. Commissioner of Income Tax Vs. G & G PharmaIndia Ltd. (2016) 384 ITR 0147 (Delhi). 9.Commissioner of Income Tax. Vs. Radico Khaitan Ltd.(2017) 96 ITR 0644 (Delhi). This Court has considered the scope of Article 226 of theConstitution of India, in respect of proceedings taken by theIncome Tax Department by initiating the reassessmentproceedings by invoking Section 147/148 of the Income Tax Act,1961 in the case of S.B. Civil Writ Petition No. 23500/2018(Vishnu Aggarwal vs. Income Tax Officer) decided on 26[th]October, 2018. It would be appropriate to quote relevant paras of S.B. CivilWrit Petition No. 23500/2018, which read as under:- 6.ACIT Vs. Dhariya Construction Co. (2010) 328 ITR 515. 7.BIR Arina Enterprises Pvt. Ltd. Vs. Income Tax Officer(1993) 204 ITR 0258 JKHC. 8.Pr. Commissioner of Income Tax Vs. G & G PharmaIndia Ltd. (2016) 384 ITR 0147 (Delhi). 9.Commissioner of Income Tax. Vs. Radico Khaitan Ltd.(2017) 96 ITR 0644 (Delhi). This Court has considered the scope of Article 226 of theConstitution of India, in respect of proceedings taken by theIncome Tax Department by initiating the reassessmentproceedings by invoking Section 147/148 of the Income Tax Act,1961 in the case of S.B. Civil Writ Petition No. 23500/2018(Vishnu Aggarwal vs. Income Tax Officer) decided on 26[th]October, 2018. It would be appropriate to quote relevant paras of S.B. CivilWrit Petition No. 23500/2018, which read as under:- 19.“The purpose of sections 147 & 148 of the Act,1961 is to ensure that the assessees, who havesuppressed the fact at the time of filing of their incometax returns or if the Department is in possession ofcertain new materials in respect of the assessment ofa particular year, then the assessee must be informed about the decision to reopen the assessment and aftersuch information is provided, the procedure is requiredto be followed for the purpose of concluding thereassessment. 20.This Court finds that very initiation of proceduresunder Sections 147 & 148 of the Income Tax Act, 1961cannot be interfered with by the Courts in a routinemanner and judicial review against such initiation islimited. 21.It is found that Section 147 requires that thereasons must be recorded in the notice and in theabsence of any reason communicated along withnotice under Section 148 of the Act, the entireprocedures can become null and void. The intention ofthe statute is that the authorities on the receipt of newmaterial facts or any suppression of materials by theassessee, is bound to initiate proceeding in invokingunder Section 147 & 148 of the Act of 1961. 22.The phraseology of “reasons to believe” has to beinterpreted that the Assessing Officer on receipt of anysuch new material or materials in relation tosuppression of fact by the assessee, has made out aprima-facie opinion that it is a case for reopening ofthe assessment and then issue notice under Section148 and thereafter, the procedure of furnishing thereasons, receiving objections and conducting scrutinyand all other procedures contemplated under theprovisions of the Income Tax Act, 1961 will follow. 23.This Court finds that when notices were issuedbased on certain material available with theDepartment and on receipt of the notice, assessee hasgot right to seek for the reasons from the Departmentand the Department is bound to provide reasons,enablingtheassesseetosubmithisexplanation/objections in order to defend his case. 24.This Court finds that there is a provision forcheck on the Income Tax officials under the Act andthe word “reasons to believe” indicate that officialscannot reopen the assessment in a routine andmechanical manner. The Assessing officer in the eventof receipt of new material information or suppression,must have “reason to believe” and the reasons mustbe recorded in the files. The issuance of notice to theassessee and after supplying the reason, the Income Tax Officer is to adjudicate the matter in the mannerknown to law. 25.This Court finds that High Court cannot use thepower of the Appellate Authorities in respect of theobjections on the merits and demerits of the matterand the High Court cannot appreciate the question oflaw and facts at the initial stage, when notice underSection 148 of the Income Tax Act, 1961 is issued tothe assessee for reopening the assessment. Thecomplex facts and circumstances are required to beadjudicated by producing the documents and adducingevidences by the parties concerned and such anexercise can never be done by the High Courts underArticle 226 of the Constitution of India. Tax Officer is to adjudicate the matter in the mannerknown to law. 25.This Court finds that High Court cannot use thepower of the Appellate Authorities in respect of theobjections on the merits and demerits of the matterand the High Court cannot appreciate the question oflaw and facts at the initial stage, when notice underSection 148 of the Income Tax Act, 1961 is issued tothe assessee for reopening the assessment. Thecomplex facts and circumstances are required to beadjudicated by producing the documents and adducingevidences by the parties concerned and such anexercise can never be done by the High Courts underArticle 226 of the Constitution of India. 26.This Court is also conscious of the legal principlethat writ petition can be entertained, when the noticesare issued by the Competent Authority having nojurisdiction or if the allegations of mala-fides areleveled or if the same is in violation of any statutoryrules. 27.This Court after going through the ingredients ofSection 147 of the Act, 1961 finds that the AssessingOfficer has wider power, in respect of covering theescaped assessments for the purpose of reopening theassessment. The power under Section 147 of the Act,1961, is to be exercised in various circumstancesenabling the Assessing Officer to assess or reassesssuch income other than the income involved in thematters, which are the subject matters of any appeal,reference or revision. 31.The judgment cited by learned counsel for thepetitioner in the case of Jeans Knit P. Ltd. Vs. DCIT(Supra), the Apex Court has though remanded thematter back to the High Court where it did notentertain the writ petition against issuance of notice &also made it clear that each case is to be examined onits own merits keeping in view the scope of judicialreview while entertaining such matters. 32.This Court finds, that in the instant case, in thenotice which was communicated to the petitioner, itwas informed to the petitioner that he was the actualbeneficiary owner of some bank account in the case ofone Munna Lal Pareek. This Court finds that theAssessing Officer has further given sufficient materialto the petitioner by furnishing copy of assessment order of Munna Lal Pareek and order passed by the CIT(Appeals) in the case of Munna Lal Pareek. The saidmaterial or information available with the AssessingOfficer has led the Assessing Officer to think thatpetitioner is required to be confronted by giving noticeto explain the income, which was to be assessed in thehands of petitioner as the same is correct or not. 33.The submission of learned counsel for thepetitioner that the writ petition would lie even againstthe show cause notice, if it suffers from illegality &error is apparent on the face of record, this Court findsthat the exercise of writ jurisdiction may lie evenagainst the show cause notice but the self imposedrestriction to substitute its opinion on the view takenby the authorities, is also an important factor. 34.The submission of learned counsel for thepetitioner that the case of Co-ordinate Bench of thisCourt in the case of Cheer Sagar Vs. CIT (Supra) hasentertained a petition against notice issued underSection 148 of the Income Tax Act, this Court findsthat in the case of Cheer Sagar Vs. CIT (supra), theissue was with respect to the bar of limitation and thesame was projected as the issue of ‘jurisdiction’. ThisCourt considering the bar of limitation as an issue ofjurisdiction, directed the Income Tax Authorities todecide the objections as preliminary objection. 35.This Court finds in the instant case that there isno issue of jurisdiction which can be said to be raisedby the petitioner and it is only allegation in respect ofcryptic order passed by the Assessing Officer withouthaving any reasons to believe or to initiate theproceedings under Section 148 of the Act, 1961. 35.This Court finds in the instant case that there isno issue of jurisdiction which can be said to be raisedby the petitioner and it is only allegation in respect ofcryptic order passed by the Assessing Officer withouthaving any reasons to believe or to initiate theproceedings under Section 148 of the Act, 1961. 36.This Court further finds that the petitioner, who isgiven notice under Section 142 (1) to further explainand to place before the Assessing Officer the relevantfacts relating to income which is now sought to beassessed, can always satisfy the authorities that theincome which is now taken to be the income of thepetitioner instead of one Shri Munna Lal Pareek, is wellexplained by their own sources. 37.Considering, all the facts, this Court finds thatthere is no infirmity in the orders passed by theIncome Tax Authorities and if any order ofassessment/reassessment is passed, petitioner isalways free to file an appeal contemplated under the Income Tax Act, 1961. The present writ petition is notmaintainable before this Court and accordingly, thepresent writ petition stands dismissed. No orders as to costs.” This Court, following the view expressed in the case of Vishnu Aggarwal vs. Income Tax Officer (supra), dismiss thepresent writ petitions. Accordingly, the present writ petitions stand dismissed. (ASHOK KUMAR GAUR),J Monika