BHAGWANDAS SHOBHALAL JAIN vs COMMISSIONER OF INCOME TAX and Another

C. K. Prasad, J .

On a prima facie finding that the order of the assessing officer is erroneous and prejudicial to the interest of revenue, Commissioner issued notice, dated 10-5-2000, u/s 263 of the Income Tax Act, calling upon the petitioner to file clarification supported with the details: lt is this order of the Commissioner which has been challenged by the petitioner in this writ petition, filed under articles 226 and 227 of the Constitution of India.

In view of the order which I propose to pass in this writ petition, it is .in expediant to give in details the facts of the case. Suffice it to say that the Commissioner gave notice to the petitioner u/s 263 of the Income Tax Act. In response thereto, petitioner appeared before the Commissioner and prayed for time to file the reply. Petitioner ultimately filed the reply on 29-5-2000 raising various pleas on facts and law. Thereafter, the petitioner has chosen to file this writ petition on 31-5-2000.

I have heard Sri B.L. Nema for the petitioner and Sri A.P. Shrivastava for the respondents. Mr. Nema submits that foundational facts for exercise of jurisdiction u/s 263 of the Income Tax Act is that the Commissioner records a finding that the order of the assessing officer is both erroneous and prejudicial to the interest of revenue . He attempted to address on the merits of the case to demonstrate that the finding arrived at by the Commissioner while calling upon the petitioner to file its reply u/s 263 of the Income Tax Act is unsustainable. In support of his submission, Mr. Nema has placed reliance on a large number of authorities. Mr. A.P. Shrivastava, however, appearing on behalf of the respondents submits that the stage has not come to go into the intrinsic merits of the case of the party as notice u/s 263 of the Income Tax Act has been issued on prima facie satisfaction of the Commissioner that the order of the assessing officer is both erroneous and prejudicial to the interest of revenue . He also in support of his submission has placed reliance on a large number of authorities.

Having appreciated the rival submissions, I am of the opinion that this is not the stage at which this court should enter into the intrinsic merits of the case of the petitioner. Foundation for exercise of the power u/s 263 of the Income Tax Act is the prima facie satisfaction of the Commissioner that the order of the assessing officer is erroneous and prejudicial to the interest of revenue. The Commissioner while calling upon the petitioner to submit reply has recorded such a finding.

It is well settled that this court while exercising its power under articles 226 and 227 of the Constitution of India does not interfere with the show-cause notice unless an exceptional case is made out. As held earlier, foundational facts necessary for issuance of notice u/s 263 of the Income Tax Act exist and in that view of the matter, I do not find it an exceptional case for interference at this stage. Petitioner has already filed its reply. Needless to State that the Commissioner shall take into consideration the pleas raised by the petitioner objectively in accordance with law.

In the result, I do not find any merit in the writ petition and it is dismissed accordingly. In the facts and circumstances of the case, there shall be no order as to cost.