Karam Chand Thapar and Bros. (Coal Sales) Ltd. vs Deputy Commissioner of Income Tax and Others

S.K. Mookherjee, Actg. C. J.

With the consent of the contesting parties, we have treated the appeal as on the day''s list for being heard out, dispensing with all the formalities required to be observed in terms of the rules of this court.

The subject-matter of the appeal is an order passed by a learned single judge dated March 21, 1997, in Writ Petition No. 4960(W) of 1997 Karam Chand Thapar and Bros. (Coal Sales) Ltd. Vs. Deputy Commissioner of Income Tax and Others, The learned single judge, by the said order, had been pleased to dismiss the writ petition, inter alia, with a finding that the Assessing Officer had jurisdiction to proceed with the assessment and for that purpose called for information as required for the purpose of assessment and that while doing so the learned single judge rejected the petitioner''s contention that the respondent, Assessing Officer, had made up her mind as to the nature of the transaction. In view of such observations, made by the learned single judge, Dr. Pal, appearing in support of the appeal and the connected application, had contended that the comment of the Assessing Officer in the impugned notice (annexure "E") to the effect that the sale and lease back was merely a paper transaction indicated that the officer had already made up her mind, and had prayed for stay of further proceedings in the assessment case, till the disposal of the connected appeal. On behalf of the contesting respondents, the Income Tax authorities, it had been emphatically submitted that the issuance of the notice itself was indicative of the fact that the officer in question had an open mind and it was undeniable that she had not made up her mind. It was also pointed out on behalf of the respondents that the assessment was to be completed by March 31, 1997, and any delay in the matter would render the assessment barred.

In the perspective of the aforesaid urgency, we heard the appeal. From a scrutiny of the notice, it appears that the Assessing Officer called for information, which, in case the documents already furnished by the appellant as enclosures to its letter dated January 13, 1997, had been looked into, would not have been wholly necessary and it was open to the Assessing Officer to proceed on the materials already made available by the appellant. By way of justification of our aforesaid view, we would like to point out that the reply to query No. 1 in the disputed notice was already available in the penultimate paragraph of Clause (a) of the assessee''s letter; the reply to query No. 2 was available in the third sub-paragraph of Clause (a) in the said letter.

The above materials on record have persuaded us to quash the notice dated February 5, 1997, in part. In this connection, it is pertinent to keep on record that we have failed to find any substance in the contention, raised on behalf of the respondents, that after acting in terms of the notice, the appellant cannot be said to have any subsisting cause of action. From the averments made in the petition, it appears that the notice was received by the appellant on March 6, 1997, directing it to comply with the requisitions by March 13, 1997, and, in such a situation, it was not unreasonable on the part of the appellant to comply with the notice and such mere compliance cannot be said to take away its right to prefer the writ application.

For the reasons aforesaid, we allow the appeal, in part, set aside the impugned order of the learned trial judge, quash the notice dated February 5, 1997, with regard to items (i) and (ii) of details asked for and permit the assessing authority to proceed with the assessment in accordance with law and finalise the same, dealing with the contentions that might be raised before it, on behalf of the appellant by a reasoned order. The respondents or any of them, having due authority, are directed to proceed with and complete the assessment within a period of eight weeks from the date of communication of this order to them. The view expressed in the impugned notice, we have presumed, because of the status of the Assessing Officer, is tentative and as such we expect that such officer would now proceed with the case with an open mind, in accordance with law, uninfluenced by such tentative view.

In view of the disposal of the appeal, the interlocutory application becomes infructuous and is disposed of as such.

There will be no order as to costs.

Let plain copies of the order, countersigned by the Assistant Registrar (Court), be given to learned counsel appearing for the parties on their undertaking to apply for certified copy of the order and to put in requisite stamps for the same.

BARIN GHOSH J.--I agree.