TMI Blog2011 (5) TMI 698X X X X Extracts X X X X X X X X Extracts X X X X ..... ecial Civil Application No. 16402 of 2010 - - - Dated:- 3-5-2011 - Akil Kureshi, Sonia Gokani, JJ. Manish J. Shah for the Appellant K.M. Parikh for the Respondent JUDGEMENT Per: Akil Jureshi: This petition is filed by an assessee praying for quashing and setting aside notice annexure E dated 29th March 2010 issued by the Assessing Officer, seeking to reopen assessment of the assessment year 1996-97 in the following factual background. 2. The petitioner is a proprietary concern and is engaged in the business of construction and other related activities. For the assessment year 1996-97, the petitioner filed return of income on 30th October 1996 declaring total income of Rs.4,79,460/-. The return was taken in scrutiny and assessment order was passed under section 143(3) of the Income Tax Act ('the Act' for short) on 26th March 1999. The Assessing Officer ruled against the petitioner-assessee on several contentious issues. In particular, Assessing Officer made addition of Rs.37,79,713/- in the income of the assessee towards "unaccounted receipt in the invoice of sale/on-money receipt". The petitioner carried the matter in appeal before the CIT(Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the assessment order upon remand from the Tribunal, the Assessing Officer, issued a fresh notice under section 148 of the Act on 29th March 2010 seeking to reopen the assessment previously framed. It is this notice that the petitioner-assessee has challenged in this petition. 6. The reasons recorded by the Assessing Officer for reopening the assessment were communicated to the petitioner. Such reasons read as under: "In this case, return of income was filed on 30.10.1996 declaring total income of Rs.4,79,460/-. The same was processed u/s.143(1)(a) of the I.T.Act. Order u/s.143(3) was passed on 26.3.99 determining total income at Rs.64,45,473/-. Additions were made on account of, i) Unsecured loan Rs.13,37,000 ii) Unaccounted receipt in the invoice of sale/on money receipt Rs.37,79,713 iii) Non genuine exp.of lift Rs. 2,50,000 iv) Undervaluation of closing stock Rs. 5,99,300 Aggrieved by the order, assessee preferred an appeal. CIT(A), vide his order No.CAB/I-77/99-2000 dt.31.3.2000 deleted all the additions. Aggrieved by the order of CIT(A)-I, Baroda, Department filed an appeal before ITAT. Hon'bel ITAT, vide its order no.ITA No.1612/Ahd/2000 dt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment. Such report cannot be made basis for reopening completed assessment proceedings. It was contended that notice under section 148 of the Act could not have been issued in view of the provisions contained in section 149(1)(b) of the Act after a lapse of more than six years from the end of assessment year in question. 7. The objections of the petitioner were disposed of by the Assessing Officer by order dated 9.12.2010. With respect to the objection on limitation for issuance of the notice, the Assessing Officer recorded that this is a case where previous assessment was set aside and finalized after six years of the relevant assessment and further that notice under section 148 was issued after obtaining necessary satisfaction of the Commissioner of Income Tax. The petitioner has, therefore, approached this Court challenging the notice of reopening. 8. In response to the notice issued, the respondents have appeared and filed affidavit in reply contending, inter alia, that the Tribunal had restored the issue regarding addition of Rs.37,79,713/- to the file of the Assessing Officer. As per the direction of the Tribunal, question of valuation of immovable property was refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to give effect to the Tribunal's directions. Though Valuer's report was called for at that time, the same was not being made available. In the meantime, the assessment was getting time-barred on 31st December 2009. Once the Valuer's report was available, the Assessing Officer realized that there is considerable gap in the valuation of the property. He, therefore, found that income chargeable to tax escaped assessment. Counsel further submitted that in any case, the petitioner has approached this Court at notice stage. He has an equally efficacious alternative remedy. This writ petition, therefore, should not be entertained. 12. Having thus heard the learned counsel for the parties and having perused the documents on record, we may note that the central issue that calls for consideration is whether, in the facts of the case, the Assessing Officer had the authority and jurisdiction to issue notice of reopening of the assessment. Answer to such question would depend on the combined effect of the provisions contained in sections 147, 148, 149 and 150 of the Act. 13. Section 147 of the Act, as is well known, pertains to the power of the Assessing Officer to assess or reasses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or revision, etc. Section 150 reads as follows: "150.(1) Notwithstanding anything contained in section 149, the notice under section 148 may be issued at any time for the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order passed by any authority in any proceeding under this Act by way of appeal, reference or revision or by a Court in any proceeding under any other law. (2) The provision of sub-section (1) shall not apply in any case where any such assessment, reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of which an assessment, reassessment or recomputation could not have been made at the time the order which was the subject-matter of the appeal, reference or revision, as the case may be, was made by reason of any other provision limiting the time within which any action for assessment, reassessment or recomputation may be taken." Section 153 of the Act pertains to time limit for completion of assessment and re-assessment. It is not necessary to reproduce the entire section. Suffice it to say that sub-sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e than one lakh rupees. Thus, for reopening of any assessment already framed, except in respect of the cases specified in section 150 of the Act, the Assessing Officer is required to issue notice for reopening in any case not later than six years from the end of the relevant assessment year. 17. Section 150 of the Act provides an exception to this rule and permits making of assessment or re-assessment or recomputation to give consequential effect to any finding or direction contained in order passed by any authority under the Act by way of appeal, reference or revision or by a court in any proceedings under any other law. Sub-section (1) of section 150 is a non-obstante clause and states that notwithstanding anything contained in section 149, notice under section 148 may be issued at any time for the above purposes. 18. We may notice that reopening of assessment is envisaged under section 147 or to the extent provided in section 150. As already noticed, reassessment or reopening of assessment under section 147 is governed by the provisions of section 148 and 149 of the Act and reopening would be permissible only within six years from the end of the relevant assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me frame. 21. There is yet another reason why we are inclined to take this view. The Assessing Officer was of the opinion that the assessment would get time barred if final order is not passed by 31st December 2009. Counsel for the petitioner, however, raised some doubt with respect to this belief. He referred to the provisions contained in section 153 and in particular sub-section (2A) and (3) thereof to contend that since the Tribunal had not set aside or cancelled the entire assessment, the case would fall under sub-section (3) of section 153 and no time limit would apply. We are, however, not confronted with this controversy. We proceed on the basis that the Assessing Officer was of the opinion that time limit was getting over on 31st December 2009. 22. Permitting the Assessing Officer to reopen an assessment already framed, which if he had not done in time would have been rendered time barred, that too several years after completion of six years from the end of relevant assessment year, in our opinion, is not supported by any statutory provisions. 23. This brings us to the question of alternative remedy raised by the counsel for the Revenue. It is by now well settl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfers on the High Courts the power to give relief it becomes the duty of the courts to give such relief in fit cases and the courts would be failing to perform their duty if relief is refused without adequate reasons. In the present case we can find no reason for which relief should be refused." 24.1 In the case of A.V.Venkateswaran v. R.S.Wadhwani, AIR 1961 SC 1506, the Apex Court observed that the rule that the party who applies for issuuance of writ should, before he approaches the Court have exhausted other remedies is not one which bars the jurisdiction of the High Court to entertain a petition or to deal with it, but is rather a rule which courts have laid down for the exercise of their discretion. 24.2 In the case of State of Madhya Pradesh v. Bhailal Bhai, AIR 1964 SC 1006, the Apex Court held and observed as under: "17. At the same time we cannot lose sight of the fact that the special remedy provided in Art. 226 is not intended to supersede completely the modes of obtaining relief by an action in a civil court or to deny defences legitimately open in such actions. It has been made clear more than once that the power to give relief under Art. 226 is a discretio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ished that an alternative remedy is not an absolute bar to the maintainability of a writ petition. When an authority has acted wholly without jurisdiction, the High Court should not refuse to exercise its jurisdiction under Art. 226 of the Constitution on the ground of existence of an alternative remedy. In the instant case, the Vice-Chancellor had no power of review and the exercise of such a power by her was absolutely without jurisdiction. Indeed, the order passed by the Vice-Chancellor on review was a nullity; such an order could surely be challenged before the High Court by a petition under Art. 226 of the Constitution and, in our opinion, the High Court was not justified in dismissing the writ petition on the ground that an alternative remedy was available to the appellant under Sec. 68 of the U.P. State Universities Act." 24.4 In the case of Whirlpool Corporation v. Registrar of Trade Marks, Mumbai, AIR 1999 SC 22, the Apex Court observed as under: "20. Much water has since flown beneath the bridge, but there has been no corrosive effect on these decisions which, though old, continue to hold the field with the result that law as to the jurisdiction of the High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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