Naveen Meena Jain (HUF) vs Commissioner of Income Tax and Others

Amitava Lala, J.—The petitioner has challenged the notice dated February 27, 2009, under this writ petition by saying that the notice u/s 147 of the Income Tax Act, 1961 (in short "the Act"), has been issued beyond the maximum period of six years fixed u/s 149(b) of the Act, therefore, the notice is ex facie bad in law. According to him, the notice has been issued for the assessment year 2002-03.

Upon calculation of the period, we find that by March 31, 2009, the six year period cannot be said to be elapsed.

Sri Shubham Agrawal, learned Counsel appearing for the petitioner relied on the case of Sesa Goa Ltd. Vs. Joint Commissioner of Income Tax and Others, in support of the contention of the petitioner. Without going into the calculation of the years under that judgment we can safely say that the case hereunder is factually distinguishable with the referred case. In that case, apparently the ten year period had already expired unlike the present one.

Sri Dhananjay Awasthi, learned Counsel appearing for the Revenue, submitted that the Supreme Court in the case of GKN Driveshafts (India) Ltd. v. HO [2003] 259 ITR 19, held as Mows (page 20):

We see no justifiable reason to interfere with the order under challenge. However, we clarify that when a notice u/s 148 of the Income Tax Act is issued, the proper course of action for the noticee is to file a return and if he so desires, to seek reasons for issuing notices. The Assessing Officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the Assessing Officer is bound to dispose of the same by passing a speaking order. In the instant case, as the reasons have been disclosed in these proceedings, the Assessing Officer has to dispose of the objections, if filed, by passing a speaking order, before proceeding with the assessment in respect of the abovesaid five assessment years.

In so far as the appeals filed against the order of assessment before the Commissioner (Appeals), we direct the appellate authority to dispose of the same, expeditiously.

With the above observations, the civil appeals are dismissed.

Sri Shubham Agrawal, learned Counsel appearing for the petitioner, further relied upon a judgment in the case of Sunil Kumar Jain Vs. The Income Tax Officer, The Commissioner of Income Tax and The Commissioner of Income Tax, , whereunder considering the various judgments of the different High Courts, the Division Bench of our High Court held that when a notice u/s 148 of the Act is issued, the proper course of action is to file a reply with his objections including those in relation to the absence of jurisdiction. However, it does not lay down that when such an objection is in relation to the absence of jurisdiction and the same is revealed ex facie or apparent on the face of a notice or reasons in support thereof, the assessee will compulsorily invite an order from the Assessing Officer in relation to the absence of jurisdiction. He further relied upon a judgment of a Division Bench in the case of S.K. Traders v. Additional Commissioner, Trade Tax reported in [2007] 34 NTN 345 particularly paragraphs 20 and 29 therein to establish that in the case of natural justice, alternative remedy is no bar.

We are very much concerned about further submission of the petitioner that only on being subjective satisfaction, the Joint Commissioner can allow the Assessing Officer to issue such notice with regard to escapement of any assessment within the meaning of Section 147 of the Act and no challenge can be thrown to the purported satisfaction of the Commissioner but the order of the Assessing Officer arising out of it. However, there is a way to understand the situation without jumping upon the issue at any stage of the proceeding. In the instant case, the petitioner has filed his reply and return and, therefore, he is entitled to get the reasons about the issuance of such notice and file the objection in connection thereto and the assessing authority is bound to decide the same with reasons and the petitioner will have further right to challenge such order. It is correct to say that if the issuance of notice or passing of any order is absolutely without jurisdiction, alternative remedy cannot be held to be bar but when factually we find that the period of six years u/s 149(b) of the Act is not expired, we cannot hold and say that the issuance of notice on account of escapement of assessment is absolutely beyond jurisdiction. Assuming for the moment, we accept the submission of the petitioner that there is no scope for the assessee to challenge the subjective satisfaction of the Joint Commissioner yet such situation is not available to the writ petitioner when he has submitted to the jurisdiction of the Assessing Officer. Alternatively, right to challenge the decision of the Assessing Officer by the assessee is composite in nature which includes the nature of subjective satisfaction by the Joint Commissioner. Therefore, at this stage we do not find any reason to interfere with the notice. However, we treat the writ petition as disposed of with liberty to file objection by the petitioner in the line of observation of the court after obtaining the reasons for issuance of such notice.

No order is passed as to costs.

Rajes Kumar, J.

I agree.