M/S Singhal Industries v. Deputy Commissioner Of Income Tax, Circle Bharatpur

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANAT JAIPUR BENCH, JAIPUR O R D E R (1) S.B. CIVIL WRIT PETITION NO. 7473/2002 M/s SINGHAL INDUSTRIES Vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE BHARATPUR & (2) S.B. CIVIL WRIT PETITION NO. 7474/2002M/s SINGHAL INDUSTRIES DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE BHARATPUR DATE: 17.12.2007. HON'BLE MR. JUSTICE K.S. RATHORE Mr. R.P. Garg for the petitioners. Mr. Abhay Jain for Mrs. Parinitoo Jain for the respondent.**** Since both these writ petitions involve similar question of facts and law, therefore, they arebeing decided by this common order. The facts of the case of S.B.C.W. Petition No. 7473/2002 are taken as leading case. By way of this writ petition, the petitioner has challenged theimpugned notice dated 28.03.2002 (Annexure-1) and thereasons for re-opening the case under Section 147 dated30.04.2002 (Annexure-3) on the ground that the noticesare against the facts available on record and law applicable and the same deserve to be quashed and set-aside. It is further challenged that the notice underSection 148 of the Income Tax Act dated 28.03.2002 isserved to the petitioner without issuing any notice andproviding opportunity of hearing to the petitioner. The petitioner has further challenged theimpugned notice on the ground that the said notice isneither speaking nor any reasons have been disclosed bythe respondent and the assessment was already completedin the case twice on 30.03.2000 and 20.03.2001 afterperusal of all the material available on record. Therespondent has no material for re-opening the case andas per the provisions of Section 148 of the Income TaxAct and settled preposition of law, there should be newmaterial or information before initiating proceedingsunder Section 148 of the Income Tax Act. On the other hand, the respondent has raised preliminary objections regarding maintainability of thewrit petition as the petitioner has got alternativeremedy of filing appeal before the Commissioner ofIncome Tax (Appeals) under Section 246 of the IncomeTax Act against the order passed under Section 147 ofthe Income Tax Act. Further if aggrieved by the orderof Commissioner of Income Tax (Appeal), the petitionermay approach before the Income Tax Appellate Tribunal under Section 253 of the Income Tax Act and if anyadverse order is passed by the Income Tax AppellateTribunal, the same can be challenged under Section 260-A of the Income Tax Act before this Court and withoutavailing the alternative efficacious remedy availableto the petitioner, the present writ petition has beenfiled which is not maintainable. Learned counsel for the respondent has furtherchallenged the maintainability of the writ petition onthe ground that the petition against the notice issuedunder Section 148 of the Income Tax Act is notmaintainable as per the settled preposition of law aslaid down by the Division Bench of this Court and theHon'ble Apex Court as the Hon'ble Apex Court hasobserved that the High Court should not exerciseextraordinary power vested under Articles 226 and 227of the Constitution of India in the notice issued underSection 148 of the Income Tax Act. In reply to the preliminary objections raisedon behalf of the respondent, it is contended by thelearned counsel for the petitioner that the writpetition is maintainable even against the notice issuedunder Section 148 of the Income Tax Act and placedreliance on the judgment rendered by the Division Benchof the Madhya Pradesh High Court in the case of Satish Chandra Arya Vs. Income-Tax Officer, Special & Survey In reply to the preliminary objections raisedon behalf of the respondent, it is contended by thelearned counsel for the petitioner that the writpetition is maintainable even against the notice issuedunder Section 148 of the Income Tax Act and placedreliance on the judgment rendered by the Division Benchof the Madhya Pradesh High Court in the case of Satish Chandra Arya Vs. Income-Tax Officer, Special & Survey Ward Circle-I, Indore, 1984 (Vol.146) Income TaxReports 334, wherein the Division Bench of the MadhyaPradesh High Court has held that ITO had nojurisdiction to issue notice to the assessee underSection 148 and the notice was liable to be quashed.He also placed reliance on the judgmentrendered by the Division Bench of the Gujarat HighCourt in the case of Shri Vallabh Glass Works Ltd. Vs.Income-Tax Officer, Companies Circle VIII And Others,1995 (Vol.212) Income Tax Reports 433, wherein theDivision Bench of the Gujarat High Court has observedthat when the Act permits the filing of a revisedreturn, it is expected to be considered by theassessing authority, if the same is filed before theorder is made by it; otherwise the very purpose ofgiving such a right would be frustrated.Learned counsel appearing for the respondentin support of his submissions with regard tomaintainability of the writ petition, has placedreliance on the judgment rendered by the Division Benchof this Court in the case of Assistant Commissioner ofIncome-Tax And Others Vs. Banswara Syntex Ltd., 2005(Vol.272) Income Tax Reports 642, wherein the Division Bench of this Court has observed as under:- “The assessing authority hasjurisdiction to reopen the assessmentunder section 147 of the Income-TaxAct, 1961, by issuing notice undersection 148 of the Act after fouryears from the end of the relevantyear in case the assessing authorityhas reason to believe that on accountof omission or failure on the part ofthe assessee to file the return or onaccount of failure on his part todisclose fully and truly all materialfacts necessary for assessment forthat particular year, income hadescaped assessment. The sufficiency ofthe reasons for forming the belief isnot for the court to judge.” Similar view has been taken by the Division Bench of this Court in the case of Udaipur Mineral Development Syndicate Pvt. Ltd. Vs. Assistant Commissioner of Income-Tax And Another, 2004 (Vol.269)Income Tax Reports 279, wherein the Division Bench ofthis Court has held as under:- Dismissing the appeal, thatsanction for notice under section 148of the Income-tax Act, 1961 had beengrantedbytheAdditionalCommissioner.TheAdditionalCommissioner was the officer superiorin the hierarchy to the JointCommissioner in the Department.Certainly, the superior officer in thehierarchy was competent to grantsanction for issuance of the noticesto the assessee under section 148. Itwas clear from the findings of thesingle judge that it could not be saidthat the notice was ex facie a nullityor totally without jurisdiction. The alternative remedy of filing of theobjections against show cause noticeavailable to the appellant had beenavailed of. The notice could not bequashed.” Hon'ble the Apex Court in the case of GKN Driveshafts (India) Ltd. Vs. Income Tax Officer & Ors., (2003) 179 CTR Reports 11, has held as under:- alternative remedy of filing of theobjections against show cause noticeavailable to the appellant had beenavailed of. The notice could not bequashed.” Hon'ble the Apex Court in the case of GKN Driveshafts (India) Ltd. Vs. Income Tax Officer & Ors., (2003) 179 CTR Reports 11, has held as under:- “There is no justifiablereason to interfere with the orderunder challenge. When a notice unders. 148 is issued, the proper courseof action for the notice is to filereturn and if he so desires, to seekreasons for issuing notices. The AOis bound to furnish reasons within areasonable time. On receipt ofreasons, the noticee is entitled tofile objections to issuance of noticeand the AO is bound to dispose of thesame by passing a speaking order. Inthe instant case, as the reasons havebeen disclosed in these proceedings,the AO has to dispose of theobjections, if filed, by passing aspeaking order, before proceedingwith the assessment.” respective parties and carefully perused the relevant provisions of law as well as the impugned notice issuedunder Section 148 of the Income Tax Act, which is underchallenge in these writ petitions. judgments referred by the respective parties. To decide the preliminary issues which havebeen raised by the learned counsel for the respondentwhether these writ petitions are maintainable againstthe notice issued under Section 148 of the Income TaxAct, as observed by the Hon'ble Apex Court in the caseof GKN Driveshafts (India) Ltd. Vs. Income Tax Officer& Ors. (supra), referred by the learned counsel forthe respondent, that if any reason has not beenassigned while issuing notice under Section 148 of theIncome Tax Act, the petitioner is given liberty toraise the objection before the AO and on sucheventuality, the AO has to dispose of the objections iffiled by the petitioner by passing a speaking orderbefore proceeding with the assessment. In view of the ratio decided by the Hon'bleApex Court in the case of GKN Driveshafts (India) Ltd. Vs. Income Tax Officer & Ors. (supra), the petitionerwas given liberty to raise objection which, admittedly,has not been raised by the petitioner and filed thesewrit petitions. Therefore, in view of the ratio decided by theHon'ble Apex Court in the case of GKN Driveshafts(India) Ltd. Vs. Income Tax Officer & Ors. (supra),both these writ petitions are not maintainable as thepetitioner has got alternative efficacious remedy and even the petitioner has got remedy to raise objectionsbefore the assessing authority, as held by the Hon'bleApex Court in the aforementioned case. Consequently, both the writ petitions fail being devoid of merit and the same are herebydismissed. The interim order dated 02.12.2002 granted inS.B.C.W. Petition No. 7473/2002 and dated 11.11.2002granted in S.B.C.W. Petition No. 7474/2002 standrejected. The stay applications also stand dismissed. (K.S. RATHORE),J. /KKC/