Wp/21987/2000 Of M/S. Techtron Polylenses Limited v. The Joint Commissioner Of Income Tax

THE HONOURABLE SRI JUSTICE L. NARASIMHA REDDYandTHE HON’BLE SRI JUSTICE CHALLA KODANDA RAMWRIT PETITION No.21987 of 2000 ORDER:(per the Hon’ble Sri Justice L.Narasimha Reddy) This Writ Petition is filed challenging the notice dated09.06.2000 issued by the respondent in exercise of power underSection 148 of the Income Tax Act, 1961 (for short ‘the Act’). In a way,the relief is couched in a broader manner to restrain the respondentfrom reopening the proceedings at all. Briefly stated the facts are that the petitioner, an assessee underthe Act, submitted its returns for the Assessment Year 1992-93. One ofthe items mentioned in the returns was a sum of Rs.65,64,740/-received by it in the form of interest from investments before itcommenced the business. In the return itself, it was mentioned that thesaid amount is not liable to tax in view of certain precedents. On07.01.1995, the Assessing Officer, on the one hand, issued anintimation under Section 143(1)(a) of the Act disallowing the claim of the petitioner vis-à-vis the said amount and on the other hand, passed an order under Section 143 (3) of the Act. The petitioner filed two separate appeals before theCommissioner (Appeals) challenging the two orders, referred toabove. The appeals were dismissed by the Commissioner throughorder dated 26.06.1995. The petitioner approached Hyderabad Bench‘A’ of the Income Tax Appellate Tribunal by filingI.T.A.Nos.1216&1217/Hyd/95. The appeals were allowed and thematter was remanded to the Commissioner. On such remand, theCommissioner passed a common order dated 31.07.1996 upholdingthe intimation given under Section 143 (1)(a) of the Act, but settingaside the order passed under Section 143(3) of the Act. TheDepartment filed I.T.A.No.1402/Hyd/1997 before the Tribunal feeling aggrieved by the order of Commissioner. The appeal was dismissedthrough order dated 22.09.2000. The result was that the intimationunder Section 143(1)(a) was upheld and the order under Section 143(3) was set aside by the Tribunal. It is after these developments thatthe impugned notice was issued proposing to deal with the amount. The petitioner submits that issuance of notice cannot besustained in law and it is contrary to Sections 147 and 148 of the Act.The respondent filed a counter affidavit opposing the Writ Petition. It isstated that a show cause notice can be challenged, if only it is issuedby an authority, who is not conferred with the power and once theauthority is competent to issue notice, the recipient thereof has topresent his version by submitting explanation. Other grounds are alsourged. Heard Sri S. Ravi, learned Senior Counsel for the petitioner and Sri S.R.Ashok, learned Senior Counsel for the respondent. The notice issued by the respondent is silent about its details. Ageneral statement is made to the effect that it has come to hisknowledge that some amount referable to the concerned assessmentyear has escaped tax. It is not in dispute that Sections 147 and 148 of the Act conferpower upon the Assessing Officer to reopen an assessment subject, ofcourse to fulfillment of the conditions stipulated therein. The occasionfor this Court to interfere with the show cause notice would arise, if onlyit is issued by an authority not vested with the power or if it is otherwisebarred under law. The possibility of the very circumstances underwhich the above show cause notice was issued, being proved to benon-existent, cannot be a ground to interfere with the same. Therecipient of a notice can put forward all his contentions, touching onmerits and even his understanding about the provision of law in theexplanation. There is no reason to believe that the respondent wouldnot take such objections into account before he passes the final order. We, therefore, dismiss the Writ Petition leaving it open to the We, therefore, dismiss the Writ Petition leaving it open to the petitioner to submit his explanation, within six weeks from today. It isneedless to observe that the respondent shall take into considerationthe explanation that may be submitted by the petitioner before any finalorder is passed. There shall be no order as to costs. The Miscellaneous Petitions filed in this Writ Petition shall standdisposed of. L.NARASIMHA REDDY, J Date: 25.09.2014 Note: Issue C.C in one weekB/ova CHALLA KODANDA RAM, J