Wp(C) v. The Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT:- THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN FRIDAY, THE 30TH DAY OF MAY 2014/9TH JYAISHTA, 1936 W.P.(C).No.4765 of 2014 (U) ----------------------------------------------- PETITIONER(S):- ------------------------ P.V.SREENIJIN, F 4, TRAVANCORE RESIDENCY, MANGATTU ROAD, ERNAKULAM, KOCHI - 682 029. BY ADVS.SRI.N.J.MATHEWS SMT.SUSAN MATHEW RESPONDENT(S):- -------------------------- 1. THE COMMISSIONER OF INCOME TAX (CENTRAL), 5TH FLOOR, KANDAMKULATHY TOWERS, M.G. ROAD, ERNAKULAM, KOCHI - 682 011. 5TH FLOOR, KANDAMKULATHY TOWERS, M.G. ROAD, ERNAKULAM, KOCHI - 682 011. 2. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I ALFA LIZA BUILDING, OPP. S.R.V. L.P SCHOOL, CHITTOOR ROAD, ERNAKULAM, KOCHI - 682 016. ALFA LIZA BUILDING, OPP. S.R.V. L.P SCHOOL, CHITTOOR ROAD, ERNAKULAM, KOCHI - 682 016. 3. THE JOINT COMMISSIONER OF INCOME TAX, CENTRAL RANGE, ALFA LIZA BUILDING, OPP. S.R.V. L.P SCHOOL, CHITTOOR ROAD, ERNAKULAM, KOCHI - 682 016. ALFA LIZA BUILDING, OPP. S.R.V. L.P SCHOOL, CHITTOOR ROAD, ERNAKULAM, KOCHI - 682 016. R1 TO R3 BY SENIOR COUNSEL FOR GOVT. OF INDIA (TAXES) SRI.P.K.R.MENON & STANDING COUNSEL FOR GOVT. OF INDIA (TAXES) SRI.JOSE JOSEPH. STANDING COUNSEL FOR GOVT. OF INDIA (TAXES) SRI.JOSE JOSEPH. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 30-05-2014, ALONG WITH WP(C).NO.4766/2014-U & CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:- ------------------------------------- APPENDIX PETITIONER(S)' EXHIBITS:- --------------------------------------- EXHIBIT-P1- TRUE COPY OF THE ASSESSMENT ORDER DATED 31/03/2013 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER.ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. EXHIBIT-P2- TRUE COPY OF THE LETTER DATED 22/08/2013 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER.2ND RESPONDENT TO THE PETITIONER. EXHIBIT-P3- TRUE COPY OF THE LETTER DATED 14/03/2013 ISSUED TO THE2ND RESPONDENT BY THE 3RD RESPONDENT AND ANNEXED TO EXHIBIT-P2.2ND RESPONDENT BY THE 3RD RESPONDENT AND ANNEXED TO EXHIBIT-P2. EXHIBIT-P4- TRUE COPY OF THE LETTER DATED 28/03/2013 ISSUED TO THE2ND RESPONDENT BY THE 3RD RESPONDENT AND ANNEXED TO EXHIBIT-P2.2ND RESPONDENT BY THE 3RD RESPONDENT AND ANNEXED TO EXHIBIT-P2. EXHIBIT-P5- TRUE COPY OF THE LETTER DATED 21/11/2011 ISSUED BY CIT-2 KOCHI, TRANSFERRING JURISDICTION TO 2ND RESPONDENT.KOCHI, TRANSFERRING JURISDICTION TO 2ND RESPONDENT. EXHIBIT-P6- TRUE COPY OF THE MEMORANDUM OF APPEAL DATED 22/09/2013PREFERRED BY THE PETITIONER AGAINST EXHIBIT-P1.PREFERRED BY THE PETITIONER AGAINST EXHIBIT-P1. EXHIBIT-P7- TRUE COPY OF THE NOTICE DATED 16/01/2014 ISSUED BY THE IST RESPONDENT TO THE PETITIONER.IST RESPONDENT TO THE PETITIONER. RESPONDENT(S)' EXHIBITS:- ----------------------------------------- NIL. ( true copy ) K.Vinod Chandran, J. ------------------------------------------------------------------ W.P.(C).Nos.4765 of 2014-U, 4766 of 2014-U, 4767 of 2014-U, 4994 of 2014-Y, 4995 of 2014-Y & 4996 of 2014-Y ------------------------------------------------------------------ Dated this the 30[th] day of May, 2014 JUDGMENT The issue raised in all the above writ petitions filed by two assessees, who are husband and wife, with respect to threeassessment years, being 2008-09, 2009-10 and 2010-11, is thelegality of the show cause notices issued by the Commissioner ofIncome Tax under Section 263 of the Income Tax Act, 1961 [forbrevity “the Act”]. The assessments were completed by the AssessingOfficer and the Commissioner, by separate orders under Section 263in the case of each of the assessees for the respective assessmentyears, sought to revise the assessment orders; produced as ExhibitP7 in all the writ petitions. 2. The factual aspects need not be gone into at this stage. ------------------------------------------------------------------ Dated this the 30[th] day of May, 2014 JUDGMENT The issue raised in all the above writ petitions filed by two assessees, who are husband and wife, with respect to threeassessment years, being 2008-09, 2009-10 and 2010-11, is thelegality of the show cause notices issued by the Commissioner ofIncome Tax under Section 263 of the Income Tax Act, 1961 [forbrevity “the Act”]. The assessments were completed by the AssessingOfficer and the Commissioner, by separate orders under Section 263in the case of each of the assessees for the respective assessmentyears, sought to revise the assessment orders; produced as ExhibitP7 in all the writ petitions. 2. The factual aspects need not be gone into at this stage. Suffice it to notice that certain expenditure of the assessee, whichhad not been taken into account by the Assessing Officer as “income”and the allowance of deduction on expenditure far in excess of theincome received were the subject matter of all the notices issued. - 2 - The Commissioner's jurisdiction under Section 263 or rather thepalpable lack of it in the subject years is the grievance highlighted. 3. The learned counsel Sri.N.J.Mathews in his inimitablestyle, forcefully but with elegant restrain urges before Court that thepower exercised by the Commissioner under Section 263 in theinstant cases cannot at all be sustained and the show cause noticesare to be struck down by this Court. To invoke the jurisdiction underArticle 226 of the Constitution, the learned counsel places reliance onthe decision in Siemens Ltd. v. State of Maharashtra [2007 (1)KLT 88 (SC)], to contend that if the issuance of a show cause noticeis totally without jurisdiction, then necessarily this Court is competentto invoke its powers under Article 226, despite the opportunityavailable for the assessee to convince the Commissioner about theillegality of exercise of such revisory jurisdiction, as such; as also onfacts. The learned counsel would term the power available underSection 263 to be a composite power, clothing the Commissioner withthe power to issue notice, afford an opportunity for hearing theassessee and pass reasoned orders. But, however, only and only ifthe jurisdictional foundation to invoke such powers are satisfied. For - 3 - such jurisdictional foundation to be available, the two essential elements, specifically mandated by the words employed in Section263,being the erroneous nature of the orders, resulting in prejudiceto the revenue, should exist together. No proceedings could be takenonly on either of the aforesaid reasons being available and thejurisdictional foundation presupposes the existence of both. 4. The learned counsel places reliance on the decision of the Hon'ble Supreme Court in Malabar Industrial Co. Ltd. v. CIT[(2000) 243 ITR 83 (SC)] to buttress the aforesaid contention. Themeaning of “erroneous” is urged before this Court placing reliance onCIT v. Gabriel India Ltd. [(1993) 203 ITR 108 (Bom)] andC.I.T. v. Mehrotra Brothers [(2004) 270 ITR 157 (M.P.)]. Thelearned counsel has also placed reliance on C.I.T. v. EIMCO-K.C.P.Limited [(1984) 147 ITR 603 (Mad.], Rajendra Singh v.Superintendent of Taxes [(1990) 79 STC 10], Jindal PhotoFilms Ltd. v. Deputy Commissioner of Income Tax [(1998)234 ITR 170 (Delhi)],CIT v. Sunbeam Auto Ltd. [(2009) 332ITR 167 (Delhi)] and CIT v. Anil Kumar Sharma [(2010) 335ITR 83 (Delhi)]. 5.It is contendedthat when assessee has placed all 4. The learned counsel places reliance on the decision of the Hon'ble Supreme Court in Malabar Industrial Co. Ltd. v. CIT[(2000) 243 ITR 83 (SC)] to buttress the aforesaid contention. Themeaning of “erroneous” is urged before this Court placing reliance onCIT v. Gabriel India Ltd. [(1993) 203 ITR 108 (Bom)] andC.I.T. v. Mehrotra Brothers [(2004) 270 ITR 157 (M.P.)]. Thelearned counsel has also placed reliance on C.I.T. v. EIMCO-K.C.P.Limited [(1984) 147 ITR 603 (Mad.], Rajendra Singh v.Superintendent of Taxes [(1990) 79 STC 10], Jindal PhotoFilms Ltd. v. Deputy Commissioner of Income Tax [(1998)234 ITR 170 (Delhi)],CIT v. Sunbeam Auto Ltd. [(2009) 332ITR 167 (Delhi)] and CIT v. Anil Kumar Sharma [(2010) 335ITR 83 (Delhi)]. 5.It is contendedthat when assessee has placed all materials before the Assessing Officer and the same has beenconsidered by the officer passing the assessment orders, then therewould be no scope under Section 263 to re-open such assessments. Itis also urged that a computation error could be rectified by theDepartment under Section 154 and any new material coming to thenotice of the Assessing Officer could be applied by resort to are-opening under Section 147. On facts, it is submitted that ExhibitsP3 and P4 would indicate that the Commissioner of Income Tax, whohas now revised the order under Section 263, was consulted beforethe assessment order was passed. In view of the consultation, theCommissioner cannot now revise the order under Section 263 of theAct, is the plea. The assessee is entitled to seek a logical conclusionof proceedings; he/she having placed the entire transactions in therelevant years. The incompetence of the Assessing Officer cannotresult in the assessee being kept on tender hooks till exhaustion of'legal ingenuity' by the Department, is the argument. 6. Learned Senior Counsel for Government of India(Taxes) Sri.P.K.R.Menon would contend that the plea of harassment - 5 - made by the petitioners cannot be looked into by this Court,especially since that cannot be a reason to strike down a show causenotice. The legislature in its wisdom having provided measures toplug evasion and ensure payment of revenue due; the action of theCommissioner neither can be assailed on the ground of harassmentnor can it be termed 'legal ingenuity'. The impugned orders beingonly a show cause notice, it is the argument of the learned SeniorCounsel that there is no reason why this Court should interfere at thisstage and all contentions could be raised before the Commissioner.The learned Senior Counsel would rely on the decisions in AppolloTyres Ltd. Deputy CIT [(2014) 360 ITR 36 (Ker)] and CIT v.English Indian Clays Ltd. [(2011) 331 ITR 219 (Ker)], tocontend that even when there was no application of mind by theAssessing Officer or when the procedure adopted is patently wrong,the Commissioner could invoke the powers under Section 263. 7. In Malabar Industrial Co. Ltd. (supra), the Hon'ble Supreme Court was concerned with a revision made by theCommissioner under Section 263 of the Act. The brief facts were thatthe assessee, having entered into an agreement for sale of an estate, - 6 - 7. In Malabar Industrial Co. Ltd. (supra), the Hon'ble Supreme Court was concerned with a revision made by theCommissioner under Section 263 of the Act. The brief facts were thatthe assessee, having entered into an agreement for sale of an estate, - 6 - was paid compensation by the purchaser, who was not able to satisfythe terms of payment; of consideration. The compensation paid wasclaimed as a deduction, since it was in lieu of loss of agriculturalincome. The claim having been allowed by the Assessing Officer, theCommissioner sought to revise the same. The Hon'ble Supreme Court,as pointed out by the learned counsel for the petitioner, found that toinvoke Section 263, necessary ingredients are the erroneous nature ofthe order and that it caused prejudice to the interests of the revenueand it was categorically declared that existence of one such reasonwould not clothe the authority with the power under Section 263.However, it was declared that “an incorrect assumption of facts or anincorrect application of law will satisfy the requirement of the orderbeing erroneous” (sic). Orders which are passed without applying theprinciples of natural justice or without application or mind were alsoheld to be falling within the category of “erroneous” orders. 8. With respect to the phrase “prejudicial to the interest ofthe revenue”, the expression was held to be of wide import and notconfined to loss of tax. The view expressed by the High Court ofMadras that prejudice would be caused only when the order establishes a bad trend or bad pattern on a general reckoning washeld to be an interpretation too narrow to merit acceptance. Everyloss of revenue as a consequence of an order of the Assessing Officerthough was not held to be possible of being treated as “prejudicial tothe interests of the revenue”, the Supreme Court by way of anillustration also noticed a case where there is a divergence of opinion,which would not in effect be considered as an order prejudicial to theinterest of the revenue. In the said case, the order of the AssessingOfficer, allowing the claim of exemption, was held to be one madewithout application of mind, since there was absolutely no material onrecord to show that the amount represented compensation foragricultural loss. The revision under Section 263 was, hence, upheld.9. Reliance was placed on Gabriel India Ltd. (supra) tocontend that an erroneous assessment refers to an assessmentrendered contrary to law or on a mistaken view of law or uponerroneous application of legal principles and does not at all refer tothe efficacy of the judgment of an Assessing Officer. The BombayHigh Court, in the said decision, was concerned with an expenditureclaimed by the assessee as 'revenue expenditure', the same having - 8 - been incurred in merging two industrial plants of the assessee. The Assessing Officer had called for an explanation from the assessee andhad considered the detailed explanation placed on record by theassessee before allowing the claim for deduction. However, there wasno discussion in so far as the allowance of the deduction and, hence,the Commissioner revised the order under Section 263 fornon-application of mind, since the Commissioner was of the opinionthat the expenditure would be a 'capital expenditure'. It was only insuch circumstance that the High Court of Bombay held that theopinion of the Commissioner alone cannot form the basis of therevision under Section 263. The Commissioner's view that there wasno elaborate discussion was held to be insufficient to invoke thepowers under Section 263. With respect to the power under Section263, the Division Bench clearly said so: “It must be an order which is not in accordance with thelaw or which has been passed by the Income-taxOfficer without making any enquiry in undue haste”. The decision of the Gauhati High Court in Rajendra Singh (supra) is a verbatim reproduction of the above principle, but relating to a “It must be an order which is not in accordance with thelaw or which has been passed by the Income-taxOfficer without making any enquiry in undue haste”. The decision of the Gauhati High Court in Rajendra Singh (supra) is a verbatim reproduction of the above principle, but relating to a revision under the sales-tax enactment. 10. Mehrotra Brothers (supra) was a case in which the Assessing Officer had considered the records, the evidence producedand expressed satisfaction about the genuineness of a cash credittransaction. The order passed under Section 263, on the vagueground that the Assessing Officer did not make a proper enquiry, wasset aside by the Tribunal, which was confirmed by the High Court ofDelhi. 11. EIMCO-K.C.P. Limited (supra) considered the question whether the pendency of an appeal by the assessee beforethe first Appellate Authority would disentitle the Commissioner fromexercising power under Section 263. The Court found the powerunder Section 263 does not in any manner conflict with the appellatepower. 12. The Delhi High Court in Sunbeam Auto Ltd. (supra)looked at an order under Section 263 seeking to revise anassessment order allowing the claim of revenue expenditure withrespect to the expenses incurred by an automobile spare partsmanufacturer, on purchase of tools and dyes. The revision was WP(C).No.4765 of 2014 &connected cases. - 10 - attempted on the ground that the assessment order merely allowed the claim without any discussion. The High Court having found fromthe records that the Assessing Officer had made enquiries about theexpenditure, upon which the assessee had offered detailedexplanation, held that the mere lack of elaborate discussions cannotbe held to be erroneous. Following Malabar Industrial Co. Ltd.(supra), it was also held that mere difference in view cannot lead to afinding of prejudice being caused to the Revenue. 13. The finding in Sunbeam Auto Ltd. (supra), whichhas some bearing in the instant case is: “There must be some prima facie material on record to show thattax which was lawfully exigible has not been imposed or that by theapplication of the relevant statute on an incorrect or incompleteinterpretation a lesser tax than what was just has been imposed”. The Court drew a distinction between “lack of inquiry” and “inadequate inquiry” and held that only in the case of the former;Section 263 could be invoked. Anil Kumar Sharma (supra) followedthis decision and the revision attempted was found to be bad againfor the reason of the records having revealed an enquiry having been - 11 - properly undertaken, and the apparent lack of reasons in the order for allowing a claim being not sufficient ground to invoke Section 263. 14. Jindal Photo Films Ltd. (supra) was concerned witha reopening of assessment under Section 147, made for reason onlyof a deduction having been granted wrongly. It was held that theAssessing Officer was not seized of any new material or informationand the mere change of opinion could not lead to reopening on theground of escaped assessment. Touching upon the jurisdictionalinfirmity, it was held so in para 20: “It is also equally well settled that if a notice undersection 148 has been issued without the jurisdictionalfoundation under Section 147 being available to theAssessing Officer, the notice and the subsequentproceedings will be without jurisdiction, liable to be struckdown in exercise of writ jurisdiction of this court. If 'reasonto believe' be available, the writ court will not exercise itspower of judicial review to go into the sufficiency oradequacy of the material available. However, the presentone is not a case of testing the sufficiency of materialavailable. It is a case of absence of material and hence theabsence of jurisdiction in the Assessing Officer to initiatethe proceedings under sections 147/148 of the Act”. 15. That the power under Section 263 is available to the 15. That the power under Section 263 is available to the Department only on the order being “erroneous in so far as it isprejudicial to the interests of the revenue”, calls for no debate orargument. Section 263 provides for the Commissioner to call for andexamine the record of any proceedings under the Act and in the eventof there being any error which results in prejudice to the interest ofthe revenue, it also confers the power to revise the order passed bythe Assessing Officer either by enhancing or modifying or cancellingassessment or directing a fresh assessment to be made. Theproceedings under Section 263, as rightly pointed out by the learnedSenior Counsel, along with the powers for rectification and re-openingunder Section 154 and 147, are powers available to the Departmentand its officers to ensure that the entire tax is assessed as levied bythe statute. While the assessee has remedies under the statute tochallenge that portion of an assessment causing prejudice to him/her;the aforesaid provisions ensure avoidance of prejudice to theRevenue. As held by the Division Bench judgment of the Madras HighCourt in EIMCO-K.C.P. Limited (supra); Section 263 contemplates“not so much a power but a duty on the Commissioner's part to set WP(C).No.4765 of 2014 &connected cases. - 13 - right an order passed by the ITO” (sic). The Commissioner, underSection 263, is the “custodian of the interests of the Revenue” (sic). Itis the illegality of the order of an Assessing Officer or the totalnon-application of mind which is sought to be curbed by the revisorypowers conferred under Section 263. 16. The decisions of the various High Courts relied upon by the petitioners dilates on the power under Section 263 inconsonance with the decision of the Hon'ble Supreme Court inMalabar Industrial Co. Ltd. (supra). The said well-establishedproposition does not at all aid the petitioners in the instant case, sincethe action contemplated herein is again in consonance with suchpowers. Furthermore, two Division Benches of this Court has delvedupon this question. English Indian Clays Ltd. (supra) was a case inwhich two claims of depreciation were allowed, one in part and theother in whole. The assessee was found to have claimed a similardepreciation in the earlier year, which was found to be bogus and itwas conceded by the assessee by settling the tax liability under theKar Vivad Samdahan Scheme. The Commissioner found that the claimwas allowed by the Assessing Officer without reference to the original WP(C).No.4765 of 2014 &connected cases. - 14 - assessment and without examining the eligibility of the assessee. The assessment having been made in a cursory manner granting hugeamount as depreciation, was found to be erroneous in so far ascausing prejudice to the interests of the revenue. The records werefound to have revealed that the depreciation claimed was totallyunsubstantiated. The Division Bench of this Court reversed the orderof the Tribunal which set aside the order of the Commissioner underSection 263. 17. Appollo Tyres Ltd. (supra). was a case in which the Commissioner invoked Section 263 to consider specifically the ninepoints on which the Assessing Officer had failed to apply his mind.The contention that the Assessing Officer did consider the said ninepoints and was not required to make a roving enquiry item-wise,while accepting the returns of the assessee, was found to be notsustainable. 18. In the present case, one of the contentions raised isthat the assessment order has been passed after 21 months and thesame was finalised after discussion with the Commissioner of IncomeTax. The petitioner relies on Exhibit P3 and P4 to contend that the - 15 - same would clearly reveal that consultation was made with the 17. Appollo Tyres Ltd. (supra). was a case in which the Commissioner invoked Section 263 to consider specifically the ninepoints on which the Assessing Officer had failed to apply his mind.The contention that the Assessing Officer did consider the said ninepoints and was not required to make a roving enquiry item-wise,while accepting the returns of the assessee, was found to be notsustainable. 18. In the present case, one of the contentions raised isthat the assessment order has been passed after 21 months and thesame was finalised after discussion with the Commissioner of IncomeTax. The petitioner relies on Exhibit P3 and P4 to contend that the - 15 - same would clearly reveal that consultation was made with the Commissioner of Income Tax by the Assessing Officer prior to thefinalisation of the same. This Court, however, on Exhibit P3 and P4alone is not to assume that such consultation had been made. Thequasi-judicial authorities under the enactment will have to act withinthe jurisdiction conferred by the statute and independently as also notunder dictates of the superior officers. But for Exhibits P3 and P4there is nothing on record to show that Exhibit P1 has been passedafter consultation with the Commissioner, who has passed theimpugned orders, Exhibit P7; nor is it pleaded that there is any suchoffice procedure available. 19. The next contention urged by the learned counselappearing for the petitioners is that a revision under Section 263could be made only if there is a legal infirmity in the order. Thepresent orders, all having dealt with fact situations, are essentiallyadditions attempted to be made, which the Commissioner does nothave the authority under Section 263, is the contention. It is to benoticed that the Commissioner, while passing Exhibit P7 orders, whichare separately produced in all the writ petitions, has specifically - 16 - noticed that the Assessing Officer has failed to take into account theentire information available with the Department. The contention ofthe petitioners that what is now sought to be included under Section263, has already been considered, is not evident from the assessmentorders. The issues specifically dealt with in the impugned notices arenot seen discussed by the Assessing Officer, except the expenditurefor foreign travel. This is a case where the entire materials on recordwere not considered by the Assessing Officer. The Commissioner hadtaken into account the information available to the Department, asrevealed from the records called for under Section 263, and foundmany transactions to have been omitted to be considered by theAssessing Officer. 20. The Commissioner has found that the order iserroneous for reason of the Assessing Officer having not applied hismind to a number of factual aspects available in the records. Theseinter alia relate to the expenditure incurred by the assessees indeveloping landed property, construction of buildings, renovation andalteration of residential apartments and those incurred in travelling tovarious countries abroad. It also takes note of expenditure allowed far - 17 - in excess of that permissible; and even beyond the income declared. The same would, hence, definitely be an erroneous procedureadopted by the Assessing Officer, wherein the entire materialsavailable to the Department had not been taken into account,resulting in prejudice to the interests of the revenue. TheCommissioner, by the impugned orders has not attempted asubstitution of his opinion to that of the Assessing Officer; but hastaken cognizance of the 'lack of enquiry' with respect to certaintransactions as distinguished from 'insufficient enquiry'. This revealsclear non-application of mind by the Assessing Officer; as has beennoticed by the two separate Division Benches of this Court in AppolloTyres Ltd. and English Indian Clays Ltd. (both supra). in excess of that permissible; and even beyond the income declared. The same would, hence, definitely be an erroneous procedureadopted by the Assessing Officer, wherein the entire materialsavailable to the Department had not been taken into account,resulting in prejudice to the interests of the revenue. TheCommissioner, by the impugned orders has not attempted asubstitution of his opinion to that of the Assessing Officer; but hastaken cognizance of the 'lack of enquiry' with respect to certaintransactions as distinguished from 'insufficient enquiry'. This revealsclear non-application of mind by the Assessing Officer; as has beennoticed by the two separate Division Benches of this Court in AppolloTyres Ltd. and English Indian Clays Ltd. (both supra). 21. On the strength of the above findings, this Court is ofthe definite opinion that no interference can be made at the stage ofshow cause notice. The petitioners would have their remedies beforethe Commissioner of Income Tax, who shall definitely consider theobjections placed before him and pass reasoned orders as ismandated under Section 263. With respect to the power of theCommissioner under Section 263 to issue a show cause notice in the nature of the orders impugned in the writ petitions, this Court is of the opinion that it was perfectly proper and legal and within thepowers of the Commissioner under Section 263 of the Act to haveissued such notices. In the result, the writ petitions shall stand dismissed; declining invocation of the extra-ordinary powers under Article 226.However; making it clear that this Court has not looked at any of theadditions, or materials which are the basis of the revision notified bythe Commissioner, as noticed in the impugned orders, thesustainability of which is open to challenge by the petitioners herein,before the Commissioner. The parties are directed to suffer theirrespective costs. vku. Sd/- K.Vinod Chandran, Judge ( true copy )