TMI Blog2005 (8) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... tt C.J.-In this writ petition, by invocation of the provisions of article 226 of the Constitution of India, the challenge is against the initiation of the proceedings and further resultant impugned reassessment order, in terms of the provisions of section 148 read with section 147 of the Income-tax Act, 1961 ("the Act"), recorded on March 31, 2005, by the Assistant Commissioner of Income-tax, Central Circle-4, Patna, of the Income-tax Department, in relation to the assessment for the year 1997-98 against the petitioner, who carries on the work of running a school known as "International School" in New Patliputra Colony, at Patna, mainly, on the one premise, that the grounds stated in the impugned reassessment order under section 148 read with section 147 of the Act are without jurisdiction, and in the result, the following short question comes to surface for our consideration and adjudication in this writ petition: "Whether initiation and subsequent completion of the impugned reassessment order under section 148 of the Act has been without jurisdiction, as there was no 'reason to believe' as provided in section 147 of the Act, as the authority had no supporting material?" With ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further followed with a notice under section 142(1) of the Act on September 7, 2004, with an enclosed questionnaire of even date sent to the assessee. In response thereto a written communication dated September 14, 2004, came to be received by the authority, wherein, the assessee offered clarification in respect of the documents seized together with a request that the reassessment proceedings for the year under consideration should be dropped. The authority had suitably replied to the assessee by letter dated November 29, 2004, whereupon the assessee once again was to ensure compliance with the statutory notice served under section 148 by filing a return of income as well as the questionnaire issued as enclosure to the notice under section 142(1) of the Act. It be noted that the return of income was eventually filed on December 13, 2004. Again the authority issued a notice under section 142(1) dated December 24, 2004, with a written communication to the assessee informing that a considerable length of time has already passed in seeking reasons recorded under section 148(2) before making any compliance which was not justified. More so on account of the fact that the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to be without jurisdiction. It is, therefore, forcefully submitted that the assessee is not bound to first avail of the statutory remedy of appeal against the impugned order of reassessment. He has further submitted that the petitioner has a right to invoke the provisions of article 226 of the Constitution of India as the formation of the opinion with regard to the aforesaid expression "reason to believe" is without supporting material and hence without jurisdiction. Upon consideration of the submissions on this point and keeping in mind the factual profile emerging from the record of the present case, as well as the relevant provisions of section 147 "reason to believe" we have no slightest hesitation in finding that the impugned order of reassessment could not be branded or labelled as one without jurisdiction. At the best it could be said to be wrong exercise of the jurisdiction vested in the assessing authority under sections 147 and 148 and the impugned order could be said to be without jurisdiction, when the authority has no express or implied jurisdiction or when the jurisdiction is assumed on the premise of some material which is extraneous to the issue in question or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is accepted on its face value in the light of the specific provisions in the Act and clear factual profile, we are afraid, that may lead to a paralytic impact on the exercise of powers and jurisdiction in terms of the prescribed statutory provisions under the Act. We are, therefore, of the opinion that the impugned reassessment order is not without jurisdiction and therefore in the result ordinarily though it is not a ban or bar in exercise of this constitutional writ jurisdictional power under article 226 of the Constitution of India in the light of the settled proposition of law and the prudence as well. The assessee is first obliged to take recourse to statutory appellate provision under the Act. He cannot be permitted to short circuit the provisions prescribed for challenging the impugned order in the higher forum. The inbuilt statutory mechanism having jurisdiction to hear the appeal under section 246(1) of the Act is distinguishably provided under the Act whereas constitutional powers of this court enshrined under article 226 of the Constitution of India are as such decidedly, plenary, extraordinary, equitable and discretionary. Ordinarily, the writ court would be incline ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o understand as to how this decision could be pressed into service on behalf of the assessee. On the contrary, it helps the Department. Learned counsel for the assessee-petitioner has also placed reliance on the following judicial pronouncements in order to convince us that the notice under section 147 read with section 148 of the Act was without jurisdiction and for correct interpretation of the statutory provision "reason to believe": (i) Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191 (SC); (ii) Madhya Pradesh Industries Ltd. v. ITO [1965] 57 ITR 637 (SC); (iii) Sheo Nath Singh v. AAC of I.T. [1971] 82 ITR 147 (SC); and (iv) ITO v. Lakhmani Mewal Das [1976] 103 ITR 437 (SC). The aforesaid case law cannot be disputed. However, whether the decisions in the aforesaid case law are attracted or not will depend upon the factual profile of each case. Decisions are rendered in the light of the facts which are variable in each case. We have considered the aforesaid decisions in case law relied on and we find that they are not helpful to the petitioner in the factual profile of the present case. Learned standing counsel for the Income-tax Department has placed reliance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arify that this court, in a writ petition, does not sit in judgment over the adequacy or sufficiency of reasons recorded. This is a matter to be gone into in reassessment proceedings. This court will interfere only in cases where no reasons are recorded or where the reasons recorded are ex facie irrelevant." As observed hereinbefore in the present case before filing the return the reasons were asked for by the assessee from the authority upon issuance of notice without filing the return which is decidedly not proper. Reasons obviously would follow upon or after assessment proposition or conclusion has been reached. In the course of hearing, it is stated at the Bar that in the demand notice after reassessment dated March 31, 2005, a demand is made of Rs. 19,09,200 which has remained unpaid yet. After having taken into account the overall picture emerging from the record of the present case, factual catalogue of the circumstances, events and procedure followed by the assessing authority before passing the impugned reassessment order, as well as, rival submissions and the above settled proposition of law, we are of the clear opinion that there is no occasion for our interference ..... X X X X Extracts X X X X X X X X Extracts X X X X
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