TMI Blog2003 (11) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... . A. PUJ. JUDGMENT The judgment of the court was delivered by D. H. WAGHELA J. -Invoking article 226 of the Constitution, the petitioner has, in this petition, prayed for a writ of certiorari or any other appropriate writ or direction to quash the notice dated July 15, 2002, issued under section 148 of the Income-tax Act, 1961 (in short "the Act"), proposing to reassess the income of the petitioner. Initially, while issuing notice in this proceeding, the respondents concerned were directed to disclose to the petitioner the reasons for reassessment and not to proceed further in pursuance of the impugned notice. After grant of such ad interim relief and statement of learned senior counsel for the respondents that the Department would not proceed further in pursuance of the impugned notice, a detailed order dated September 30, 2003, was made after hearing learned counsel so as to direct the petitioner to raise his objections before the Assessing Officer and directing the Assessing Officer to consider and dispose of the objections in accordance with law by a speaking order. That order was expressly made in accordance with the judgment of the Supreme Court in GKN Driveshafts (I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r reassessment and issuance of notice in the present proceeding, reasons for reopening of assessment are supplied to the petitioner vide letter dated August 13, 2003, according to which, the reasons supposed to have been recorded on July 15, 2002, read as under: "15-7-2002. The assessee has filed a return of income for the assessment year 2000-2001 on October 24, 2000, declaring therein total income of Rs. 1,84,45,766, which was processed under section 143(1)(a) on January 21, 2002, without making any prima facie adjustment. The assessee has made a note that he has received non-compete fee of Rs. 1,85,40,000 from Proctor and Gamble, which being a capital nature is not taxable and the same is, therefore, is not taxable. The amount of non-compete fees is taxable and the same ought to have been included in the total income. I have reasons to believe that income of the assessee has escaped assessment within the meaning of the provisions of section 147 of the Income-tax Act, 1961, to the tune of Rs. 1,85,40,000. (Sd.)............ ACIT, Cir. 2, Baroda." It was strenuously argued by learned counsel Mr. Dixit that the intimation under section 143(l)(a) of the Act was actual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that case of Praful Chunilal Patel v. M. J. Makwana, Asst. CIT [1999] 236 ITR 832 (Guj) it is observed (per R. K. Abichandani J.) as under: "In cases where the Assessing Officer has not made an assessment of any item of income chargeable to tax while passing the assessment order in the relevant assessment year, it cannot be said that such income was subjected to an assessment. In the assessment proceedings, the Assessing Officer would ascertain on consideration of all relevant circumstances the amount of tax chargeable to a given taxpayer. The word 'assessment' would mean the ascertainment of the amount of taxable income and of the tax payable thereon. In other words, where there is no ascertaining of the amount of taxable income and the tax payable thereon, it can never be said that such income was assessed. Merely because during the assessment proceedings the relevant material was on record or could have been with due diligence discerned by the Assessing Officer for the purpose of assessing a particular item of income chargeable to tax, it cannot be inferred that the Assessing Officer must necessarily have deliberated over it and taken it out while ascertaining the taxable in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y legal evidence. They only mean that he forms a belief from the examination he makes and if he likes from any information that he receives. If he discovers or finds or satisfies himself that the taxable income has escaped assessment, it would amount to saying that he had reason to believe that such income had escaped assessment. The justification for his belief is not to be judged from the standards of proof required for coming to a final decision. A belief though justified for the purpose of initiation of the proceedings under section 147, may ultimately stand altered after the hearing and while reaching the final conclusion on the basis of the intervening enquiry. At the stage where he finds a cause or justification to believe that such income has escaped assessment, the Assessing Officer is not required to base his belief on any final adjudication of the matter . . .." It is also observed in the same judgment that: "The function of the Assessing Officer is to administer the Act with solicitude for public treasury and with fairness to the taxpayers. He is necessarily armed with great powers. Up to four years an assessment is open to his unreserved consideration on his fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... initiation of the proceedings under section 147 of the Act cannot be challenged on the ground of want of jurisdiction. The Assessing Officer has to determine the facts and the law in order to give him jurisdiction to proceed and if in the determination of this he goes wrong, the proper remedy for the assessee would be to go up in appeal and to have the case referred to the High Court under the provisions of the Act. A writ of prohibition under article 226 cannot be issued against the Assessing Officer in such cases." Besides the above legal position which comprehensively answers most of the contentions of the petitioner, in the facts of this case, the first assessment, and formation of the opinion are premised only upon the issuance of acknowledgment under section 143(1) of the Act. The new scheme of assessment, as stated in the order of the Assistant Commissioner of Income-tax rejecting the objections of the petitioner, as per Circular No. 549 of the Department, is as under: "With the number of income-tax assessees continuously increasing, there was an urgent need to reduce the Department's work load by compliance by the assessees. The Amending Act, 1987, has, therefore, subs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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