TMI Blog2003 (12) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... K. Kapoor, and passed an order directing to file affidavits and to continue interim order for a period of eight weeks after X-mas vacation or until further order whichever is earlier. On the same day at the request of Mr. Kapoor, I agreed to hear the matter on the subsequent days without recalling the above order. I made clear to learned counsel that in the event the submission and argument of learned Additional Solicitor General warranted vacating and modification or recalling of my order dated December 2, 2003, I might do so. As such the matter was heard on December 5, 2003, and December 9, 2003, respectively. The learned Additional Solicitor General contends that this application should be dismissed in limine, if not possible at this stage then the interim order granted by this court should be vacated. He says the notice issued by the officer is not justiciable as in exercise of statutory power he has issued, because he has reason to believe that income chargeable to tax has escaped assessment for the assessment year of 1999-2000. The formation of op4Uon of the officer's reason to believe is his subjective satisfaction. Necessary permission has been obtained from the Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose of reopening of assessment of any relevant assessment year only on the statutory conditions being fulfilled, namely, firstly, he has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, secondly, the reasons have to be recorded meaning thereby existence of reasons is sine qua non to issue such notice. When an assessee challenges the notice contending that there exists no reason then the Assessing Officer has the obligation to divulge or communicate the same. He contends in this case in spite of demand such reasons are not supplied as such it is open for the court to examine whether there exists any or for that matter whether the reasons even if any, recorded have rational nexus to the formation of the opinion, this can only be done on production of record or by filing affidavits. He contends further that in this case after regular assessment order was passed, on January 3, 2003 (sic), a notice of rectification dated December 24, 2002, was issued by respondent No.2 under section 154/155 of the Income-tax Act. The petitioner replied to the said notice dated December 24, 2002, and explained that there was no mistake that requires ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ola Export Corporation v. ITO [1998] 231 ITR 200 (SC); CIT v. Trilok Nath Mehrotra [1998] 231 ITR 278 (SC); CESC Ltd. v. Deputy CIT (No. 1) [2003] 263 ITR 382 (Cal) and Smt. Uma Devi Jhawar v. ITO [1996] 218 ITR 573 (Cal). Having heard the respective contentions and submissions of learned counsel and gone through the petition at this stage the question appears to me for answering is as to whether on the facts and circumstances of this case this court will interfere with the notice or not. It is the settled position of the law that in exercise of extraordinary power under article 226 of the Constitution of India, the court will not interfere with any proceedings of a quasi-judicial nature particularly when this is initiated under expressed provision of the statute and which in its turn provides for a complete code for adjudicating machinery, provided of course such action is initiated in lawful and proper exercise of jurisdiction. The learned Additional Solicitor General says that this notice once issued in exercise of jurisdiction is not justiciable and I think he is right in principle. Now the question is whether he has done so on the facts and circumstances of this case. So, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gible nexus between the reasons and the belief, so that, on such reasons no one properly instructed on the facts of the case could reasonably entertain the belief, the conclusion would be inescapable that the Income-tax Officer could not have had reason to believe. In such a case the notice issued by him would be liable to be struck down as being invalid and without jurisdiction. The materials having a natural nexus to the formation of the belief will have to be disclosed by the Income-tax Officer. He can do so by filing an affidavit. Mr. Kapoor has placed reliance on a judgment of the learned single judge of this court on the question that once the notice is issued by the Income-tax Officer under section 147 of the Act, no court has jurisdiction if such notice discloses the belief of the Income-tax Officer that there are reasons to reopen. It appears in the judgment reported in Simplex Concrete Piles (India) Pvt. Ltd. v. Deputy CIT [2002] 255 ITR 49 (Cal), the learned single judge did not consider the earlier decision of the Supreme Court nor discuss though referred to, the judgment reported in Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191 and also decisions quoted above. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law that the decision of the larger Bench of the Supreme Court even if rendered earlier on the same point will prevail over the decision of the smaller Bench of the same court delivered at a later point of time. In support of this proposition, Dr. Pal has rightly drawn my attention to a decision of the Supreme Court reported in Bharat Petroleum Corporation Ltd. v. Mumbai Shramik Sangha [2001] 249 ITR 669. The next question is whether the writ petitioner is estopped from challenging the impugned notice after having submitted to the jurisdiction of the officer by filing returns or not. Dr. Pal has appropriately argued as against the provision of the Constitution and the statute principle of acquiescence or estoppel does not apply. Here the petitioner has filed the writ petition questioning the jurisdiction of the Assessing Officer concerned to reopen the assessment on the plea that there exists no reason and there could be no material for formation of opinion that any income of the petitioner has escaped assessment in the relevant year at the initial stage. Therefore, the question of the principle of estoppel or acquiescence did not and does not arise. Now, when the reasons have b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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