TMI Blog2002 (9) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... ent reason for refusing quick relief in a fit and proper case. - - - - - Dated:- 12-9-2002 - Judge(s) : SUBHRO KAMAL MUKERJEE. JUDGMENT SUBHRO KAMAL MUKHERJEE J.-In this application under article 226 of the Constitution of India (the "writ petition" in short), the writ petitioner questioned three notices issued under section 148 of the Income-tax Act, 1961 ("the said Act" in short), dated September 26, 1996, for the assessment years 1989-90 and 1990-91 and dated September 20, 1996, for the assessment year 1991-92. The relevant facts for the disposal of the writ petition are summarised as under: (a) The petitioner, a public limited company, is engaged in businesses of travel agency and tour operation. The petitioner is an agent of the airlines for selling air tickets and for rendering such services, it receives commission from such airlines. Similarly, the petitioner acts as an agent for various hotels and it gets commission from such hotels for booking accommodations on behalf of the clients of the petitioner. Apart from the aforesaid businesses of acting as the agent of airlines and of hotels, the writ petitioner, also carries on business of tour operation. The writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated August 21, 1997, the Deputy Commissioner of Income-tax directed the writ petitioner to file fresh returns in respect of those assessment years overruling the contentions of the writ petitioner that the returns originally filed in respect of those assessment years could not be accepted even with modifications as the returns in compliance of the notices under section 148 of the said Act. In the said letter, the writ petitioner was informed that the reasons as contemplated under section 151 of the said Act have been recorded before obtaining the approval from the Commissioner of Income-tax. (g) The writ petitioner, thereafter, filed fresh returns in respect of the said assessment years in reply to the notices issued under section 148 of the said Act. (h) Ultimately, on November 13, 1997, the Deputy Commissioner of Income-tax furnished the copies of the recorded reasons. Mr. R. N. Bajoria, learned senior advocate, appearing for the writ petitioner, submitted that where an assessment has been made under sub-section (3) of section 143 of the said Act, no action can be taken unless any income chargeable to tax has escaped assessment for such assessment year by reason of the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -whether of facts or law-he would draw from the primary facts. If from primary facts more inferences than one could be drawn, it would not be possible to say that the assessee should have drawn any particular inference and communicated it to the assessing authority. How could an assessee be charged with failure to communicate an inference, which he might or might not have drawn. In Gemini Leather Stores v. ITO [1975] 100 ITR 1 (SC), it has been observed that in the said case the assessee did not disclose the transactions evidenced by the drafts, which the Income-tax Officer discovered. After this discovery the Income-tax Officer had in his possession all the primary facts, and it was for him to make necessary enquiries and draw proper inference as to whether the amounts invested in the purchase of the drafts could be treated as part of the total income of the assessee during the relevant year. This the Income-tax Officer did not do. It was plainly a case of oversight, and it could not be said that the income chargeable to tax for the relevant assessment year had escaped assessment by reason of the omission or failure on the part of the assessee to disclose fully and truly all m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onable or in other words it must be based on reasons which are relevant and material. The court, of course, cannot investigate into the adequacy or sufficiency of the reasons which have weighed with the Income-tax Officer in coming to the belief, but the court can certainly examine whether the reasons are relevant and have a bearing on the matters in regard to which he is required to entertain the belief before he can issue notice under section 147(a). If there is no rational and intelligible nexus between the reasons and the belief, so that, on such reasons, no one properly instructed on facts and law could reasonably entertain the belief, the conclusion would be inescapable that the Income-tax Officer could not have reason to believe that any part of the income of the assessee had escaped assessment and such escapement was by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts and the notice issued by him would be liable to be struck down as invalid." In Indian Oil Corporation v. ITO [1986] 159 ITR 956 (SC), it was observed that it was well settled now by the several authorities of the apex court and of several High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aped assessment within the meaning of section 147. Here, also, such facts, which could have been discovered by the assessing authority but were not so discovered at the time of original assessment may not constitute new information. (2) Where the Income-tax Officer (very often successor-officer) attempts to reopen the assessment because the opinion formed earlier by himself (or more often, by a predecessor-Income-tax Officer), was, in his opinion, incorrect; judicial decisions have consistently held that this could not be done. (3) The power to reopen an assessment was conferred by the Legislature, but not with the intention to enable the Income-tax Officer to reopen the final decision made against the Revenue in respect of questions that directly arose for decision in earlier proceedings. If that were not the legal position it would result in placing an unrestricted power of review in the hands of the Assessing Officers depending on their changing moods. (4) If an expenditure or a deduction was wrongly allowed while computing the taxable income of the assessee, the same could not be brought to tax by reopening the assessment merely on account of subsequently the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee to disclose fully and truly all material facts necessary for the assessment for that assessment year. Where expressly deduction under section 80HHD was claimed and it was examined and granted by the assessing authority, there was no omission or failure on the part of the assessee to disclose any material fact necessary for the assessment. In the case in hand, at the time of submission of the original returns, as per the requirements of the law, the assessee submitted certificates from the chartered accountant in the prescribed forms claiming such exemptions. Thus, the primary facts were before the Assessing Officer when he made the assessments under sub-section (3) of section 143 and it was not open to him to invoke the provisions of section 147 of the said Act to reopen the assessments because he might have omitted to notice certain facts by oversight. For change of opinion, the provisions of section 147 of the said Act cannot be put to service. In the reasons for reopening the assessments it has not been alleged that there has been any omission or failure on the part of the assessee to disclose fully and truly all the material facts necessary for the assessments for tho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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