TMI Blog2014 (5) TMI 672X X X X Extracts X X X X X X X X Extracts X X X X ..... h remedy is required to be resorted by the asseessee - Decided against Assessee. - W. P. No. 281 of 2014 - - - Dated:- 8-5-2014 - The Hon ble Justice Harish Tandon,JJ. For the Petitioner : Mr. R. Bharadwaj, Mr. Bhaskar Sengupta For the Respondent : Prithu Dudhoria ORDER Harish Tandon, J : Assailing the show cause notice dated 3rd February, 2014 passed by the Commissioner of Income Tax under Section 263 of the Income Tax Act, 1961, the petitioner has filed the instant writ petition. The challenge to the said notice is basically founded on the ground that the Commissioner has not recorded his satisfaction relating to error in the order passed under Section 148 of the said Act affecting the interest of the revenue. The undisputed facts are that the petitioner filed a return under Section 143 (1) of the said Act declaring a loss of Rs. 19,428/-. Subsequently a notice for reassessment under Section 148 of the said Act was issued on 7th April, 2011 on the premise that the petitioner being a Non-Industrial Company has written off preliminary expenses in access of Rs. 9,000/- and, therefore, is not eligible to wright off the expenses for increase in the aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before arriving the conclusion that the order is erroneous as held in case of Commissioner of Income Tax -vs Gabriel India Ltd. reported in (1993) 203 ITR 108. By relying upon a judgment of this Court in case of Commissioner of Income Tax -vs- G.M. Mittal Stainless Steel (P) Ltd. reported in 263 ITR 255, the petitioner says that the Commissioner is statutorily bound to record reasons before coming to the conclusion that the order of the Assessing Officer is erroneous and prejudicial to the interest of the revenue. Lastly he submits that if the show cause notice suffers from incurable infirmity and lacks material particulars, the High Court in exercise of power of judicial review can it set aside as held in B.P. Agarwalla Sons Ltd -vs- Commissioner of Income-tax Others reported in (1994) 208 ITR 863 (Cal). The department, in turn, says that prior to the issuance of show cause notice under Section 263 of the Act, the records were placed before the Commissioner who after careful examination instructed the Deputy Commissioner of Income Tax to draft the said notice which after approval was issued upon the petitioner. He further submits that an opportunity of hearing was given to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the order being erroneous. The order cannot be branded as erroneous as the Commissioner is not satisfied with the conclusion arrived by the Assessing Officer. The order can be brought within the purview of erroneous order if it involves an error by deviating from law or upon erroneous application of legal principle as held by Bombay High Court in case of Gabriel India Ltd;(supra) in these words: We find that the expressions erroneous , erroneous assessment and erroneous judgment have been defined in Blacks Law Dictionary. According to the definition, erroneous means involving error; deviating from the law . Erroneous assessment refers to an assessment that deviates from the law and is, therefore, invalid, and is a defect that is jurisdictional in its nature, and does not refer to the judgment of the Assessing Officer in fixing the amount of valuation of the property. Similarly, erroneous judgment means one rendered according to course and practice of court, but contrary to law, upon mistaken view of law; or upon erroneous application of legal principles . Form the aforesaid definitions it is clear that an order cannot be termed as erroneous unless it is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proper inquiry in this regard should have been conducted by the Assessing Officer. In case of Karam Chand Thapar Sons Ltd (supra), the Court noticed the judgment of the Supreme Court delivered in case of Barium Chemical Ltd and Anr. -vs- A. J. Rana Ors; reported in AIR 1972 SC 591 on an issue wherein the word considers implies the authorities to deliberate upon the matter with careful thinking and due application of mind. If the circumstances indicated in the show cause notice manifest the examining of the documents and existence of the ingredients to brand the order to be erroneous and prejudicial to the interest of the authority, it shall constitute the sufficient compliance with the requirement of the statute. The notice is the foundation of the invocation of jurisdiction under Section 263 of the Act and is the source of the power of the Commissioner to invoke its jurisdiction. The High Court can certainly interfere with the show cause notice under Article 226 of the Constitution, if the show cause notice is brought within the purview of any of the contingencies laid down in case of B. P. Agarwalla Sons Ltd. (supra). The following passage can be aptly quoted in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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