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Judgment
J. Chelameswar, C.J.—Aggrieved by the judgment dated 3-3-2010 in Writ Petn. (Civil) No. 3334 of 2010 the unsuccessful Petitioner therein preferred the instant writ appeal.
The Appellant herein received a notice u/s 148 of the Income Tax Act dated 5-2-2009. The substance of the notice is that the assessing authority is of the opinion that some income of the Appellant escaped assessment during the assessment year 2004-05 and therefore called upon the Appellant to explain certain transactions specified in the notice and also to file an appropriate return.
It can be seen from the scheme of the Income Tax Act that u/s 147 of the Act the assessing officer is authorised to make an assessment or reassessment, as the case may be, if the assessing officer has reason to believe that any income chargeable to tax had escaped assessment subject to the various conditions and limitations specified in Section 147, details of which may not be necessary in the instant case. Section 148 of the Act stipulates that before the power u/s 147 of the Act is resorted to, the Assessee is required to be put on notice as to the intention of the assessing authority to resort to the power u/s 147 of the Income Tax Act.
Pursuant to the notice dated 5-2-2009, an assessment u/s 147 of the Income Tax Act admittedly came to be passed by the assessing authority on 30-12-2009 (Ext. P12). It is in this background that the writ petition came to be filed with the prayers as follows:
It is therefore prayed that this Hon''ble court may be pleased to call for the records leading to the issue of Ext. PI notice u/s 148 of the Act as also Ext. P12 assessment order for the year 2004-05, hear arguments on behalf of the Petitioners and:
(A) Issue a writ of certiorari quashing the original of Ext. PI notice u/s 148 of the Income Tax Act.
(B) Issue a writ of certiorari quashing the original of Ext. P12 assessment order for 2004-05.
(C) Grant such other reliefs that the Petitioners may pray for and this Hon''ble court may deem fit to grant;
(D) Award costs of the Petitioners.
It can be seen from the above extracted prayers in the writ petition that the Appellant herein challenges both the notice issued u/s 148 of the Income Tax Act as well as the assessment order passed u/s 147 of the Act pursuant to the above-mentioned notice.
A learned Judge of this Court by the judgment under appeal dismissed the writ petition on the ground that the assessment order (Ext. PI2) is an appealable order under the provisions of the Income Tax Act.
Sri P. Raghunath, learned Counsel for the Appellant, however, argued that though Ext. P12 order is an appealable order, the notice issued u/s 148 of the Act (Ext. PI) is not an appealable proceeding and therefore the learned Judge fell into error in rejecting the writ petition on the ground that there was an effective alternative remedy available to the Appellant.
We regret our inability to accept the submission made by the learned Counsel for the Appellant. No doubt, as contended by the learned Counsel for the Appellant, Ext. PI notice u/s 148 of the Income Tax Act is not an appealable proceeding. But such a proceeding culminated in an assessment order (Ext. PI2). The objection of the Appellant appears to be that the whole exercise u/s 147 of the Income Tax Act is permissible only if the assessing authority has reasons to believe to proceed u/s 147 and such belief must be a rational belief which is capable of being ascertained from the content of the notice. In the instant case the notice does not disclose any such material which could have formed the basis for a reasonable belief of escapement of income from the assessment in the mind of the assessing authority.
We are of the opinion that an examination of the contents of the notice u/s 148 of the Act at this stage after the assessment u/s 147 of the Act is completed is not to be entertained in a proceeding under Article 226 of the Constitution of India. It is a different matter if the Appellant had approached this Court immediately after the receipt of the notice u/s 148 of the Act, but that is not the case on hand. In the circumstances, we are of the opinion that the learned Judge was justified in rejecting the writ petition on the ground that a statutory appellate remedy is available to the Appellant. We see no reason to take a different view. Writ appeal is therefore dismissed at the admission stage.
After the order is dictated, learned Counsel for the Appellant submitted that in view of the order passed, the Appellant may be given liberty to prefer the statutory appeal and the Respondent may be directed to entertain the appeal as otherwise the appeal would be rejected as time-barred. In view of the pendency of the proceedings in this Court, we deem it appropriate to grant the liberty as sought for by the Appellant and direct the Respondent to entertain the appeal against Ext. PI2 order if presented before the appropriate appellate authority within a period of three weeks from today and pass appropriate orders on such appeal in accordance with law.