Herbs (India) Pvt. Ltd. vs Deputy Commissioner of Income Tax

This petition is directed against a notice u/s 148 of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), issued in respect of the assessment year 1980-81, It seems that the return submitted by the assessee for that year was accepted u/s 143(1)(a)(i) of the Act. By a notice u/s 148 of the Act, the petitioner was called upon to file a fresh return of its income for the year in question, inasmuch as its income had escaped assessment within the meaning of Clause (b) of Explanation 2 to Section 147 of the Act, In compliance with the notice u/s 148, the petitioner filed the return as required by the said notice. Thereafter, a notice u/s 143(2) of the Act was issued to the petitioner whereupon the petitioner addressed a letter to the Assessing Officer that the reopening of the case was not justified and, hence, the notice u/s 143 was liable to be vacated. The petitioner wrote another letter requesting the Assessing Officer to disclose the reasons recorded for reopening the case. As the Assessing Officer refused to oblige the petitioner, the petitioner came to this court through a writ petition under Article 226 of the Constitution of India for a direction to the Assessing Officer to furnish the reasons which prevailed with the Assessing Officer to take action u/s 143 of the Act. The said writ petition was disposed of at the admission stage itself by an order dated January 27, 1992, directing the Assessing Officer to disclose and communicate to the petitioner the reasons recorded u/s 143(2) of the Act. It is not in dispute that the petitioner has now been supplied with the reasons on which the action u/s 143 of the Act has been taken.

The validity of the notice u/s 143 of the Act is challenged through this petition on the grounds, inter alia, that the Assessing Officer had no reasons to believe that the income of the petitioner chargeable to tax had escaped assessment, and, in the alternative, the action was based on change of opinion. Another contention is that, while accepting the income returned u/s 143(1)(a)(i), the Assessing Officer had accepted the correctness of the return filed by the assessee. This, it is alleged, is amply borne out by the fact that no action u/s 143(2) of the Act was taken within six months of the acceptance of the return. On these premises, it was urged that it was not open to the Assessing Officer to resort to Section 148 of the Act. Yet another ground of attack is that the petitioner had claimed a certain deduction with respect to certain travelling allowance and that claim was based on the clarification issued by the Ministry of Finance and also on the circular of the Department and, as such, it was wholly unfair and illegal on the part of the assessing authority to have taken action u/s 143 of the Act on the plea that income had escaped assessment within the meaning of Clause (b) to Explanation 2 of Section 147 of the Act.

We have considered the matter carefully but we do not feel inclined to entertain this writ petition at this stage. It is well-settled that exercise of jurisdiction under Article 226 of the Constitution of India is discretionary and it is not intended nor can it be resorted to as an alternative remedy for the relief which may be obtained otherwise, through a statutory remedy or a forum. The recourse to the writ jurisdiction cannot be taken as a matter of course to question an alleged legal infirmity in the impugned proceedings. It is true that there are no limitations provided for the exercise of jurisdiction under Article 220 of the Constitution of India, but it is also equally true that courts have shown their disinclination to exercise their extraordinary jurisdiction under Article 226 of the Constitution of India, unless a clear case of want of jurisdiction is made out, or it is shown that there has been violation of the principles of natural justice, or some other similar ground is made out, where the action or proceedings are shown to be patently illegal.

In our opinion, no such ground is made out in the instant case. The petitioner will have ample opportunity to raise all these pleas before the Assessing Officer that have been taken in this writ petition and such other pleas that may be available to it under law. We have no doubt that, while framing the assessment, if any, the Assessing Officer shall deal with such contentions of the petitioner in accordance with law, which are canvassed before him.

Subject to the above, the writ petition shall stand finally disposed of.