Vishnu Agarwal Son Of Shri Ram Bhagat Agarwal v. Income Tax Officer, Ward 3 (2), Jaipur

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR S.B. Civil Writs No. 23500/2018 Vishnu Agarwal Son Of Shri Ram Bhagat Agarwal, Aged About 50Years, Having Its Address At Flat No. 301, Monark Residency, D-227A, Tulsi Marg, Bani Park, Jaipur In The State Of Rajasthan ----Petitioner Versus Income Tax Officer, Ward 3 (2), Jaipur Having Its Address AtNew Central Revenue Building, Statue Circle, C-Scheme, JaipurIn The State Of Rajasthan ----Respondent For Petitioner(s) : Mr. Sidharth Ranka Adv. HON'BLE MR. JUSTICE ASHOK KUMAR GAUROrder Reportable26/10/2018 The instant writ petition has been filed by the petitioner challenging the impugned reassessment notice dt. 29[th] March,2018 and the notice/order dt. 13[th] September, 2018, passed bythe respondents deciding the objections in response to the noticeissued under Section 148 of the Income Tax Act, 1961. 2.Brief facts of the case, as pleaded in the petition, arethat the petitioner is carrying out the business of trading in Oil andGhee and is regularly getting his books of accounts audited andthereafter filing its Income Tax return from year to year.Petitioner has pleaded that for the financial year 2010-11 i.e., theAssessment Year 2011-12, the petitioner got his books of accountsaudited, filed his Income Tax return on 30[th] September, 2011,declaring the total income of Rs. 2,75,121/- and accordinglyIncome Tax was paid by the petitioner. 3.The petitioner has pleaded that a notice dt. 29[th] March,2018, was issued under Section 148 of the Act, 1961for theassessment year 2011-12 and it was proposed to assess/reassessthe income for the assessment year 2011-12 as respondentcarried a belief that income for said assessment years has escapedassessment. It is pleaded that in compliance of the impugnednotice, the petitioner submitted before the authorities, thatreturns were filed earlier on 30[th] September, 2011, and the taxwas paid. 4.The petitioner has pleaded that without providing thereasons for reassessment proceedings, the respondents issuednotices under Section 143 (2) of the Income Tax Act, 1961 andalso issued notice under Section 142 (1) of the Income Tax Act,1961 dt. 10[th] August, 2018, whereby certain queries were raised.The petitioner has pleaded that a request was made after receiptof notice dt. 29[th] March, 2018, to provide the reasons recorded forinitiation of reassessment proceedings. The petitioner has pleadedthat request was again made by letter dt. 21[st] August, 2018, toprovide copy of reasons for reassessment, as mandated by law. 5.The petitioner has pleaded that on 21[st] August, 2010,the respondents provided the reasons recorded for initiation ofreassessment proceedings and it emerged that the proceedingsunder Section 148 of the Act, were initiated on the basis of orderpassed by CIT(A) in the case of one Shri Munna Lal Pareek,wherein it was held that petitioner was the actual beneficiary-owner of the Bank A/c No. 1790101442770 and name of MunnaLal Pareek was used by the petitioner and amount of Rs.43,81,500/- escaped from assessment for tax purpose. 6.The petitioner has pleaded that on receipt of reasonsrecorded for issuance of notice under Section 148 of the Act, arequest was made to provide material available with the referenceto Munna Lal Pareek and the respondents provided the copy ofassessment order and appellate order passed in the case of MunnaLal Pareek by letter dt. 24[th] August, 2018. 7.The petitioner has further pleaded that in response tothe notice received by him under Section 148 of the Income TaxAct, 1961, he filed objections on 11[th] September, 2018 and asmany as 13 objections were raised. 6.The petitioner has pleaded that on receipt of reasonsrecorded for issuance of notice under Section 148 of the Act, arequest was made to provide material available with the referenceto Munna Lal Pareek and the respondents provided the copy ofassessment order and appellate order passed in the case of MunnaLal Pareek by letter dt. 24[th] August, 2018. 7.The petitioner has further pleaded that in response tothe notice received by him under Section 148 of the Income TaxAct, 1961, he filed objections on 11[th] September, 2018 and asmany as 13 objections were raised. 8.The petitioner has pleaded that the respondents by theimpugned speaking order dt. 13[th] September, 2018, has decidedthe objections in a cryptic manner and completely failed toappreciate and consider the objections raised by the petitioner inproper perspective and has rejected the objections with pre-conceived notions. 9.Learned counsel for the petitioner-Mr. Sidharth Ranka,has submitted that the order of disposal of objections byimpugned order is passed in gross abuse of exercise of judicial orquasi-judicial power, and the same is illegal, arbitrary, based onsurmises, without jurisdiction or in excess of jurisdiction, invalid,inoperative, vague, ineffective in law, without authority andcompetence, void-ab-initio, completely baseless, based on wrongreading of law and is a nullity in the eyes of law. 10.Counsel for the petitioner submitted that theproceedings under Section 148 of the Income Tax Act, 1961 canbe re-opened only on the basis of the “reasons to believe” and notonly on the mere basis of the “reasons to suspect”. Counselsubmitted that Section 148 of the Act, 1961, casts a duty on the Assessing Officer to first have the definite material andinformation and to form an opinion, as whether some income hasescaped assessment. 11.Counsel submitted that the information which isgathered by the Assessing Officer in respect of assessment madein the hands of different assessee, cannot itself lead to a situationwhere the Assessing Officer has to make up his mind for hisreasons to believe that income has escaped assessment. 12.Counsel further submitted that the impugned orderpassed by the respondents has not taken into account the variousguidelines laid down by the Apex Court as well as by different HighCourts. 13.This Court asked the learned counsel to satisfy aboutthe maintainability of the writ petition under Article 226 of theConstitution of India to set aside the orders passed by the IncomeTax Authority, deciding the objections in response to notice underSection 148 of the Income Tax Act, 1961. 14.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. Smt. Kiran Kanwar Vs. UOI [2017] 814 Taxmann.com281 (Rajasthan)]. 3. Cheer Sagar Vs. CIT [2012] SCC Online Raj. 1707(Rajasthan). 4. Sabh Infrastructure Ltd. Vs. ACIT [2017] 398 ITR 198(Delhi)]. 5. Krown Agro Food (P.) Ltd. Vs. ACIT [2015] 57 Taxmann. Com 355 (Delhi). 6. Hemant Traders Vs. ITO [2015] 59 Taxmann.com 234(Bombay). 7. CIT Vs. Indo Arab Air Services [2015] 64 Taxmann.com257 (Delhi). 8. Hari Kishan Sunderlal Virmani Vs. DCIT [2017] 88Taxmann.com 548 (Gujarat). 9. Varshaben Sanatbai Patel Vs. ITO [2015] 64Taxmann.com 179 (Gujarat). 10. PCIT Vs. Meenakshi Overseas (P.) Ltd. [2017] 82Taxmann. Com 300 (Delhi). 11.PCIT Vs. Shodiman Investment Pvt. Ltd. [2018] 93Taxmann.com 153 (Bombay). (SC) 2. Smt. Kiran Kanwar Vs. UOI [2017] 814 Taxmann.com281 (Rajasthan)]. 3. Cheer Sagar Vs. CIT [2012] SCC Online Raj. 1707(Rajasthan). 4. Sabh Infrastructure Ltd. Vs. ACIT [2017] 398 ITR 198(Delhi)]. 5. Krown Agro Food (P.) Ltd. Vs. ACIT [2015] 57 Taxmann. Com 355 (Delhi). 6. Hemant Traders Vs. ITO [2015] 59 Taxmann.com 234(Bombay). 7. CIT Vs. Indo Arab Air Services [2015] 64 Taxmann.com257 (Delhi). 8. Hari Kishan Sunderlal Virmani Vs. DCIT [2017] 88Taxmann.com 548 (Gujarat). 9. Varshaben Sanatbai Patel Vs. ITO [2015] 64Taxmann.com 179 (Gujarat). 10. PCIT Vs. Meenakshi Overseas (P.) Ltd. [2017] 82Taxmann. Com 300 (Delhi). 11.PCIT Vs. Shodiman Investment Pvt. Ltd. [2018] 93Taxmann.com 153 (Bombay). 15.Counsel has further placed reliance on the judgments inrespect of two yardsticks, required to be considered by theAssessing Officer, for issuing notice under Section 148 i.e. reasonsto suspect; or reason to believe. Counsel has placed reliance oncircular/notice dt. 9[th] December, 2016, issued by CBDT andjudgments of the Delhi High Court in the case of SabhInfrastructure Ltd. Vs. ACIT reported in [2017] 398 ITR 198(Delhi)], Krown Agro Food (P.) Ltd. Vs. ACIT reported in[2015] 57 Taxmann. Com 355 (Delhi) and other judgmentpassed by the Delhi High Court and Gujarat High Court. 16.I have heard the submissions made by learned counselfor the petitioner and perused the material on record.17.It would be appropriate to quote Sections 147 & 148 ofthe Income Tax Act, 1961:- “Section 147:- If the [Assessing] Officer [hasreason to believe] that any income chargeable to taxhas escaped assessment for any assessment year, hemay, subject to the provisions of sections 148 to 153,assess or reassess such income and also any otherincome chargeable to tax which has escapedassessment and which comes to his noticesubsequently in the course of the proceedings underthis section, or recompute the loss or the depreciationallowance or any other allowance, as the case may be,for the assessment year concerned (hereafter in thissection and in sections 148 to 153 referred to as therelevant assessment year): Provided that where an assessment under sub-section (3) of section 143 or this section has beenmade for the relevant assessment year, no action shallbe taken under this section after the expiry of fouryears from the end of the relevant assessment year,unless any income chargeable to tax has escapedassessment for such assessment year by reason of thefailure on the part of the assessee to make a returnunder section 139 or in response to a notice issuedunder sub-section (1) of section 142 or section 148 orto disclose fully and truly all material facts necessaryfor his assessment, for that assessment year: [Provided further that nothing contained in the firstproviso shall apply in a case where any income inrelation to any asset (including financial interest in anyentity) located outside India, chargeable to tax, hasescaped assessment for any assessment year:] [Provided [also] that the Assessing Officer mayassess or reassess such income, other than the incomeinvolving matters which are the subject matters of anyappeal, reference or revision, which is chargeable totax and has escaped assessment.] Explanation 1.—Production before the Assessing Officerof account books or other evidence from whichmaterial evidence could with due diligence have beendiscovered by the Assessing Officer will not necessarilyamount to disclosure within the meaning of theforegoing proviso. Explanation 2.—For the purposes of this section, thefollowing shall also be deemed to be cases whereincome chargeable to tax has escaped assessment,namely:— (a) where no return of income has been furnished bythe assessee although his total income or the totalincome of any other person in respect of which he isassessable under this Act during the previous yearexceeded the maximum amount which is notchargeable to income-tax; Explanation 1.—Production before the Assessing Officerof account books or other evidence from whichmaterial evidence could with due diligence have beendiscovered by the Assessing Officer will not necessarilyamount to disclosure within the meaning of theforegoing proviso. Explanation 2.—For the purposes of this section, thefollowing shall also be deemed to be cases whereincome chargeable to tax has escaped assessment,namely:— (a) where no return of income has been furnished bythe assessee although his total income or the totalincome of any other person in respect of which he isassessable under this Act during the previous yearexceeded the maximum amount which is notchargeable to income-tax; (b) where a return of income has been furnished bythe assessee but no assessment has been made and itis noticed by the Assessing Officer that the assesseehas understated the income or has claimed excessiveloss, deduction, allowance or relief in the return; [(ba) where the assessee has failed to furnish a reportin respect of any international transaction which hewas so required under section 92E;] (c) where an assessment has been made, but— (i) income chargeable to tax has been underassessed;or (ii) such income has been assessed at too low a rate;or (iii) such income has been made the subject ofexcessive relief under this Act; or (iv) excessive loss or depreciation allowance or anyother allowance under this Act has been computed;] [(d) where a person is found to have any asset(including financial interest in any entity) locatedoutside India.] [Explanation 3.—For the purpose of assessment orreassessment under this section, the Assessing Officermay assess or reassess the income in respect of anyissue, which has escaped assessment, and such issuecomes to his notice subsequently in the course of theproceedings under this section, notwithstanding thatthe reasons for such issue have not been included inthe reasons recorded under sub-section (2) of section148.] [Explanation 4.—For the removal of doubts, it ishereby clarified that the provisions of this section, asamended by the Finance Act, 2012, shall also beapplicable for any assessment year beginning on orbefore the 1st day of April, 2012.” “Section 148:-[(1)] Before making theassessment, reassessment or recomputation undersection 147, the Assessing Officer shall serve on theassessee a notice requiring him to furnish within suchperiod, [* * *] as may be specified in the notice, areturn of his income or the income of any other personin respect of which he is assessable under this Actduring the previous year corresponding to the relevantassessment year, in the prescribed form and verified inthe prescribed manner and setting forth such otherparticulars as may be prescribed; and the provisions ofthis Act shall, so far as may be, apply accordingly as ifsuch return were a return required to be furnishedunder section 139:] [Provided that in a case— (a) where a return has been furnished during theperiod commencing on the 1st day of October, 1991and ending on the 30th day of September, 2005 inresponse to a notice served under this section, and(b) subsequently a notice has been served under sub-section (2) of section 143 after the expiry of twelvemonths specified in the proviso to sub-section (2) ofsection 143, as it stood immediately before theamendment of said sub-section by the Finance Act,2002 (20 of 2002) but before the expiry of the timelimit for making the assessment, re-assessment orrecomputation as specified in sub-section (2) ofsection 153, every such notice referred to in thisclause shall be deemed to be a valid notice: Provided further that in a case— (a) where a return has been furnished during theperiod commencing on the 1st day of October, 1991and ending on the 30th day of September, 2005, inresponse to a notice served under this section, and Provided further that in a case— (a) where a return has been furnished during theperiod commencing on the 1st day of October, 1991and ending on the 30th day of September, 2005, inresponse to a notice served under this section, and (b) subsequently a notice has been served underclause (ii) of sub-section (2) of section 143 after theexpiry of twelve months specified in the proviso toclause (ii) of sub-section (2) of section 143, but beforethe expiry of the time limit for making the assessment,reassessment or recomputation as specified in sub-section (2) of section 153, every such notice referredto in this clause shall be deemed to be a valid notice.] [Explanation.—For the removal of doubts, it is herebydeclared that nothing contained in the first proviso orthe second proviso shall apply to any return which hasbeen furnished on or after the 1st day of October,2005 in response to a notice served under thissection.][(2) The Assessing Officer shall, before issuing anynotice under this section, record his reasons for doingso.]” 18.The perusal of Section 147 & 148 makes it clear thatvery object of the provisions under the Income Tax Act, 1961, isto ensure that the suppressed materials or facts and the newavailability of material to the Department are also to be dealt with for the purpose of taxation. It is also very clear that in order tocover loopholes in the Tax Regime, and to control any evasion oftax by the individuals, the provisions of reopening of assessmentsare made and such provisions are to be invoked by following theprocedures contemplated under the Act. 19.The purpose of sections 147 & 148 of the Act, 1961 isto ensure that the assessees, who have suppressed the fact at thetime of filing of their income tax returns or if the Department is inpossession of certain new materials in respect of the assessmentof a particular year, then the assessee must be informed about thedecision to reopen the assessment and after such information isprovided, the procedure is required to be followed for the purposeof concluding the reassessment. 20.This Court finds that very initiation of procedures underSections 147 & 148 of the Income Tax Act, 1961 cannot beinterfered with by the Courts in a routine manner and judicialreview against such initiation is limited. 21.It is found that Section 147 requires that the reasonsmust be recorded in the notice and in the absence of any reasoncommunicated along with notice under Section 148 of the Act, theentire procedures can become null and void. The intention of thestatute is that the authorities on the receipt of new material factsor any suppression of materials by the assessee, is bound toinitiate proceeding in invoking under Section 147 & 148 of the Actof 1961. 22.The phraseology of “reasons to believe” has to beinterpreted that the Assessing Officer on receipt of any such newmaterial or materials in relation to suppression of fact by theassessee, has made out a prima-facie opinion that it is a case for reopening of the assessment and then issue notice under Section148 and thereafter, the procedure of furnishing the reasons,receiving objections and conducting scrutiny and all otherprocedures contemplated under the provisions of the Income TaxAct, 1961 will follow. 23.This Court finds that when notices are issued based oncertain material available with the Department and on receipt ofthe notice, assessee has got right to seek for the reasons from theDepartment and the Department is bound to provide reasons,enabling the assessee to submit his explanation/objections inorder to defend his case. reopening of the assessment and then issue notice under Section148 and thereafter, the procedure of furnishing the reasons,receiving objections and conducting scrutiny and all otherprocedures contemplated under the provisions of the Income TaxAct, 1961 will follow. 23.This Court finds that when notices are issued based oncertain material available with the Department and on receipt ofthe notice, assessee has got right to seek for the reasons from theDepartment and the Department is bound to provide reasons,enabling the assessee to submit his explanation/objections inorder to defend his case. 24.This Court finds that there is a provision for check onthe Income Tax officials under the Act and the word “reasons tobelieve” indicate that officials cannot reopen the assessment in aroutine and mechanical manner. The Assessing officer in theevent of receipt of new material information or suppression, musthave “reason to believe” and the reasons must be recorded in thefiles. The issuance of notice to the assessee and after supplyingthe reason, the Income Tax Officer is to adjudicate the matter inthe manner known to law. 25.This Court finds that High Court cannot use the powerof the Appellate Authorities in respect of the objections on themerits and demerits of the matter and the High Court cannotappreciate the question of law and facts at the initial stage, whennotice under Section 148 of the Income Tax Act, 1961 is issued tothe assessee for reopening the assessment. The complex factsand circumstances are required to be adjudicated by producingthe documents and adducing evidences by the parties concerned and such an exercise can not be done by the High Courts underArticle 226 of the Constitution of India. 26.This Court is also conscious of the legal principle thatwrit petition can be entertained, when the notices are issued bythe Competent Authority having no jurisdiction or if the allegationsof mala-fides are leveled or if the same is in violation of anystatutory rules. 27.This Court after going through the ingredients ofSection 147 of the Act, 1961 finds that the Assessing Officer haswider power, in respect of covering the escaped assessments forthe purpose of reopening the assessment. The power underSection 147 of the Act, 1961, is to be exercised in variouscircumstances enabling the Assessing Officer to assess or reassesssuch income other than the income involved in the matters, whichare the subject matters of any appeal, reference or revision. 28.This Court further finds that the High Court of Madras inthe case of Sun Direct TV Pvt. Ltd Vs. the AssistantCommissioner of Income Tax, Non-Corporate Circle-(20) 1has decided the similar controversy vide judgment dt. 10[th]October, 2018. 29.It would be appropriate to quote relevant paras of SunDirect TV Pvt. Ltd Vs. the Assistant Commissioner ofIncome Tax, Non-Corporate Circle, which read asunder:- “54. Considering the contentions raised by therespective parties to the cases on hand, this Court is ofan opinion that issuance of the notice under Section148 of the Act is nothing but initiation of theproceedings for reopening of the assessment alreadyfinalised. Undoubtedly, such reopenings are to be donecautiously and the reasons for reopening is alsomandatory. In the absence of any substantial reason,respective parties to the cases on hand, this Court is ofan opinion that issuance of the notice under Section148 of the Act is nothing but initiation of theproceedings for reopening of the assessment alreadyfinalised. Undoubtedly, such reopenings are to be donecautiously and the reasons for reopening is alsomandatory. In the absence of any substantial reason, the Assessing Officer cannot reopen the assessmentwhich was closed long back. the Assessing Officer cannot reopen the assessmentwhich was closed long back. 55. The very object of the provision under the IncomeTax Act is to ensure that the suppressed materials orfacts and the new availability of materials to theDepartment are also to be dealt with for the purpose oftaxation. In order to cover the loopholes in the TaxRegime, and to control and evasion of tax by theindividuals, the provision of reopening of assessmentsare made and such provisions are to be certainlyinvoked by following the procedures contemplatedunder the Act. 57. Mere issuance of notice cannot be construed as afinal order. Initiation of the proceedings are to beconstrued as informations to the Assessee and cannever be concluded as a final proceedings. Thus, theissuance of notice is an information provided to theAssessee, enabling him to avail of all furtheropportunities contemplated under the Statutes. Thus,the Court cannot come to the conclusion that nonquoting of the reasons formed by the Assessing Officerin the impugned notice will vitiate the entireproceedings. If such a proposition is adopted, then itwould be certainly difficult for the Executives to reopenthe cases as per the provisions of the Act. Theprocedures are contemplated under the Act, enablingthe Assessee to avail the opportunity and defend theircase in accordance with law. 58. Thus, certain aspects which is contemplated underthe provisions of the Act, cannot be interpreted, so asto defeat the purpose for which such a provision wasenacted by the Legislators. Constructive interpretationof the Act and the Rules are of paramount importance.The Rule of constructive interpretation requires that thepossible object and the purpose to be achieved is metout by adopting not only the balancing approach, butalso by providing all reasonable opportunities to thepersons, who all are connected or aggrieved 62. The amended phraseology of "reason to believe"must be interpreted that the Assessing Officer onreceipt of any such new material or materials inrelation to suppression of fact by the Assessee hasmade out a prima facie opinion that it is a case forreopening of the assessment, then he can issue noticeunder Section 148 and thereafter, the procedure offurnishing the reasons, receiving objections andconducting scrutiny and all other procedurescontemplated under the provisions of the Act will suitas follow. Thus, it is not as if at the very issuance ofnotice requires that the reasons must be recorded inthe notice itself. 63. The very meaning of the word "Notice" is that"information that tells you or warns you aboutsomething that is going to happen". Thus, the merenotice providing an information to the Assessee thatthe authorities have got every reason to believe toreopen the assessment does not mean that all opinionsand reasons formulated by the Assessing Officer mustbe communicated to the Assessee in the very noticeissued under Section 148 of the Act. 63. The very meaning of the word "Notice" is that"information that tells you or warns you aboutsomething that is going to happen". Thus, the merenotice providing an information to the Assessee thatthe authorities have got every reason to believe toreopen the assessment does not mean that all opinionsand reasons formulated by the Assessing Officer mustbe communicated to the Assessee in the very noticeissued under Section 148 of the Act. 72. In respect of exhausting the appellate remedyavailable under the provisions of the Act, this Court isof an opinion that the writ petitioner has to exhaust theremedy provided under the Act, this Court cannotentertain the writ petition, when there is a remedyavailable to the aggrieved person under the Statute.The High Court cannot usurp the power of the AppellateAuthorities in respect of the adjudication of the meritsand the demerits of the matter. The High Court cannotappreciate the mixed question of law and facts, at theinitial stage, when a notice under Section 148 of theIncome Tax Act, 1961 was issued to the Assessee forreopening the assessment. Such complex facts andcircumstances are to be adjudicated by producingdocuments and by adducing evidences by the partiesconcerned. Such an exercise can never be done by theHigh Courts under Article 226 of the Constitution ofIndia. Thus, entertaining a writ petition at the noticestage, must be sparingly and cautiously done. The HighCourts must be restrained from entertaining such writpetitions when the very notice itself is under challenge. 73. Undoubtedly, the legal principles settled in thisregard that the writ petition can be entertained if thenotice has been issued by an incompetent authorityhaving no jurisdiction or if the allegation of mala fidesare raised or if the same is in violation of any StatutoryRules in force. Even in the case of raising an allegationof mala fides, the authorities against whom such anallegation is raised to be impleaded as partyrespondent in his personal capacity. In the event of notestablishing any such legal ground, no writ proceedingscan be entertained against a notice in a routine mannerand the judicial review in this regard is certainlylimited. 78. The Income Tax Department may not be aware ofthe income of the individual Assessees. They areassessing the tax based on the returns filed by therespective Assessees. Thus, the very concept ofassessment is that the Officer who is scrutinising thereturns did not aware of the income of an individual.For this reason only Act provides adequate power todeal with the cases, where there is evasion or suppression or otherwise by the Assessees. The verysource of assessment is the returns filed by theAssessee concerned. Only after the filing of the returns,the Department of Income Tax came to understand thatthe income of the person concerned. Thus, thereassessment may arise on several occasions and onseveral grounds. The Income Tax Department mayreceive informations from many other sources. TheIncome Tax Department may get some externalmaterials as well as from various other sources. It isthe process of investigation. On receipt of suchmaterials or informations from various other sources, insuch circumstances, the authorities must be in aposition to reopen the assessment and impose tax. Inthe absence of any such lucid provision, enabling theDepartment reopening a case, there is a possibility ofescapement of payment of tax by large number ofAssessees. The very nature of the Act is to ensure thatthe informations and the materials collected or receivedfrom various other sources are also dealt with by theDepartment of Income Tax appropriately and withreference to the provisions of the Act. 81. The language employed in Section 147(1) of theAct is that "which comes to his notice subsequently inthe course of the proceedings under the Section". Thuseven after initiation of reopening of assessmentproceedings under Section 147 of the Act. If during thecourse of the proceedings if any materials orinformations are received by the Assessing Officer thatalso can be taken into consideration for the purpose ofreassessment. It is crystal clear that the reasonsrecorded before the initiation of the reopening of theassessment alone need not be a ground forreassessment. Even after reopening of the assessmentif any materials or informations are received by theAssessing Officer that also shall be included part andparcel of the proceedings and sufficient explanationsshall be called for from the Assessee and accordingly areassessment order can be passed. Thus, twocircumstances arise after the conclusion of theassessment. Firstly, if the assessment is finalised, thereopening in respect of the escaped assessments canbe made if any new materials or suppression ofmaterials are identified. On such reopening of theassessment and during the course of the proceedings,if the Assessing Officer noticed any other materials orinformations in respect of escaped assessment and thesame also can be treated as part and parcel of thereassessment proceedings which is reopened. 82. On going through the said ingredients of theSection 147, this Court has no hesitation to concludethat the Assessing Officer has got wider power inrespect of covering the escaped assessments for the purpose of reopening the assessment. The proviso toSection 147 states that "provided further that theAssessing Officer may assess or reassess such income,other than the income involving matters which are thesubject matters of any appeal, reference or revision,which is chargeable to tax and has escapedassessment". This also provides various circumstancesenabling the Assessing Officer to assess or reassesssuch income other than the income involving thematters which are the subject matters of any appeal,reference or revision. The wideness of the power hasbeen further clarified in the said proviso clause. 89. In the present writ petition, this Court is of anopinion that undoubtedly notice was issued based onthe reasons recorded by the Assessing Officer underSection 147 of the Act. However, the reasons arrivedhad not been communicated to the writ petitioner. Butthe writ petitioner requested the reasons to befurnished. Responding to the letter sent by the writpetitioner, the Assessing Officer communicated thereasons to the Assessee/writ petitioner and theobjections were rejected. Thus, the writ petitioner hasnot been prejudiced in respect of the proceedingscommunicated by the Assessing Officer. Thus, thisCourt, has to consider the very fact that, whether anyprejudice has been caused to the Assessee resultingany injustice or otherwise in the present writ petitionon hand. The writ petitioner very well can respond tothe Assessing Officer and establish his genuinity orotherwise by producing the materials available with himand by providing informations known to him. Withoutdoing so, the writ petitioner filed the present writpetition, challenging the notice. 90. Let us now look into Section 148 of the Act.Section 148 speaks about "the issuance of notice whereincome has escaped assessment". Section 148stipulates that "the Assessing Officer shall, beforeissuing any notice under this Section, record hisreasons for doing so". Whether the said provision canbe interpreted as if recorded reasons by the AssessingOfficer should be communicated along with the notice.The very purport of the Act is to ensure that theAssessing Officers are acting with reasons andjudiciously. The Statute provides that the AssessingOfficer should record the reasons only with an object toensure that the Assessing Officers/CompetentAuthorities cannot act with callousness and without anybasis. 91. Every actions of the Authorities Competent mustbe on reasonings and the same must be recorded infiles. The reasons to be recorded by the AssessingOfficer for taking decision to reopen the escaped assessment does not mean that such reasons are to becommunicated along with the notice itself. The noticedirects the Assessee to submit his returns. If theAssessee is of an opinion that he requires the reasonsrecorded by the Assessing Officer for reopening of theassessment, then he can made a request andaccordingly the same shall be furnished by theAssessing Officer to the Assessee. 93. In case of M/S. Phool Chand Bajrang Lal vs.Income-Tax Officer And Another [MANU/SC/0361/1993:1993 203 ITR 456], it has been held as follows:- "One of the purposes of Section 147, appears to us tobe, to ensure that a party cannot get away by wilfullymaking a false or untrue statement at the time oforiginal assessment and when that falsity comes tonotice, to turn around and say "you accepted my lie,now your hands are tied and you can do nothing". Itwould be travesty of justice to allow the assessee thatlatitude." 96. This being the principles to be followed, the writpetitioner has miserably failed to establish any legallyacceptable ground for the purpose of interfering withthe actions initiated by the respondent by invoking theprovisions of the Income Tax Act, 1961. Thus, there isno infirmity as such, in respect of the initiation of theproceedings for reopening of the assessment under theAct and the writ petition is devoid of merits. Therespondent is empowered to proceed further inaccordance with law. Accordingly, the writ petitionstands dismissed. However, there shall be no order asto costs. Consequently, connected miscellaneouspetition is also dismissed.” 30.The submission of learned counsel for the petitioner that the Assessing Officer undertakes the proceedings ofreassessment, only on the basis of suspicion, without having anyreasons to believe, this Court finds that the writ petition would notbe maintainable against an order passed deciding the objectionsunder Section 148 of the Income Tax Act, 1961. The AssessingOfficer, if has “reasons to believe” that a particular income hasescaped assessment and he is not proceeding only on hearsay/conjectures, no fault can be found in such action, undoubtedlyreopening is to be done cautiously & reasons for reopening is mandatory. In the absence of any substantial reason, theAssessing Officer cannot reopen the assessment which was closedlong back. 31.The judgment cited by learned counsel for thepetitioner in the case of Jeans Knit P. Ltd. Vs. DCIT (Supra), theApex Court has though remanded the matter back to the HighCourt where it did not entertain the writ petition against issuanceof notice & also made it clear that each case is to be examined onits own merits keeping in view the scope of judicial review whileentertaining such matters. mandatory. In the absence of any substantial reason, theAssessing Officer cannot reopen the assessment which was closedlong back. 31.The judgment cited by learned counsel for thepetitioner in the case of Jeans Knit P. Ltd. Vs. DCIT (Supra), theApex Court has though remanded the matter back to the HighCourt where it did not entertain the writ petition against issuanceof notice & also made it clear that each case is to be examined onits own merits keeping in view the scope of judicial review whileentertaining such matters. 32.This Court finds, that in the instant case, in the noticewhich was communicated to the petitioner, it was informed to thepetitioner that he was the actual beneficiary owner of some bankaccount in the case of one Munna Lal Pareek. This Court findsthat the Assessing Officer has further given sufficient material tothe petitioner by furnishing copy of assessment order of Munna LalPareek and order passed by the CIT (Appeals) in the case ofMunna Lal Pareek. The said material or information available withthe Assessing Officer has led the Assessing Officer to think thatpetitioner is required to be confronted by giving notice to explainthe income, which was to be assessed in the hands of petitioner asthe same is correct or not. 33.The submission of learned counsel for the petitionerthat the writ petition would lie even against the show causenotice, if it suffers from illegality & error is apparent on the face ofrecord, this Court finds that the exercise of writ jurisdiction maylie even against the show cause notice but the self imposed restriction to substitute its opinion on the view taken by theauthorities, is also an important factor. 34.The submission of learned counsel for the petitionerthat the case of Co-ordinate Bench of this Court in the case ofCheer Sagar Vs. CIT (Supra) has entertained a petition againstnotice issued under Section 148 of the Income Tax Act, this Courtfinds that in the case of Cheer Sagar Vs. CIT (supra), the issuewas with respect to the bar of limitation and the same wasprojected as the issue of ‘jurisdiction’. This Court considering thebar of limitation as an issue of jurisdiction, directed the IncomeTax Authorities to decide the objections as preliminary objection. 35.This Court finds in the instant case that there is noissue of jurisdiction which can be said to be raised by thepetitioner and it is only allegation in respect of cryptic orderpassed by the Assessing Officer without having any reasons tobelieve or to initiate the proceedings under Section 148 of the Act,1961. 36.This Court further finds that the petitioner, who is givennotice under Section 142 (1) to further explain and to place beforethe Assessing Officer the relevant facts relating to income which isnow sought to be assessed, can always satisfy the authorities thatthe income which is now taken to be the income of the petitionerinstead of one Shri Munna Lal Pareek, is well explained by theirown sources. 37.Considering, all the facts, this Court finds that there isno infirmity in the orders passed by the Income Tax Authoritiesand if any order of assessment/reassessment is passed, petitioneris always free to file an appeal contemplated under the Income Tax Act, 1961. The present writ petition is not maintainablebefore this Court and accordingly, the present writ petition standsdismissed. No orders as to costs. (ASHOK KUMAR GAUR),J Monika