Rajoo Engineers Ltd. vs Deputy Commissioner of Income Tax

D.A. Mehta, J.—This petition was originally filed challenging notices issued by the respondent u/s 148 of the IT Act, 1961 (''the Act''), for asst. yrs. 1993-94, 1994-95 and 1995-96. At the time of admission on 23rd Nov., 1999, the Court recorded that "Mr. Soparkar does not press this Spl. Civil Appln. insofar as it relates to asst. yrs. 1994-95 and 1995-96".

Learned senior advocate for the petitioner states that return of income for asst. yr. 1993-94 was filed declaring income of Rs. 16,32,594. On 10th Jan., 1996, assessment order u/s 143(3) of the Act came to be made assessing total income of Rs. 16,55,090. The respondent issued notice u/s 148 of the Act on 16th Jan., 1997. It was contended that considering the reasons recorded for asst. yr. 1993-94, which appear as annexure to the affidavit-in-reply filed by the respondent, it was apparent that reasons had not been recorded on the day the impugned notice was issued because the reasons are dated 15th Jan., 1998. Learned counsel, therefore, argued that the impugned notice for asst. yr. 1993-94 is required to be quashed and set aside in light of the provisions of Section 148(2) of the Act.

Learned standing Counsel appearing for the respondent-authority has placed on record xerox copy of notice u/s 148 of the Act for asst. yr. 1993-94 which bears two dates : (1) 16th Jan., 1997, and (2) 16th Jan., 1998�with some illegible noting preceding the date 16th Jan., 1998. It was suggested by the learned Counsel that the endorsement appears to be ''served by''. It was thus contended that the reasons were recorded on 15th Jan., 1998, and the impugned notice was actually served on 16th Jan., 1998, and not 16th Jan., 1997, as contended by the petitioner.

Section 148(2) of the Act reads as under:

The AO shall, before issuing any notice under this section, record his reasons for doing so.

On a plain reading of the aforesaid section, the legislative mandate which one discerns is that before issuing any notice u/s 148 of the Act, the AO is bound to record reasons for issuance of such notice. The facts of the present case which have come on record do not indicate that reasons were recorded before issuing the notice u/s 148 of the Act for asst. yr. 1993-94. The xerox copy of the notice on which reliance has been placed also cannot assist the case of the Revenue for the simple reason that in the printed column for date 16th Jan., 1997 is clearly mentioned. Even if one accepts that the endorsement below the printed column refers to date of service as 16th Jan., 1998, the language of Section 148(2) of the Act does not permit recording of reasons between the date of issuance of notice and service of notice. The words used by the provisions in no uncertain terms require recording of reasons before issuing any notice. The terms ''issued'' and ''served'' in relation to a notice are distinct and have different connotation in legal parlance and in the context of Section 148 of the Act, cannot be equated.

In the aforesaid facts and circumstances of the case, it is apparent that mandatory requirements provided by Section 148(2) of the Act of recording of reasons before issuance of notice have not been complied with insofar as the impugned notice u/s 148 of the Act for asst. yr. 1993-94 is concerned. Hence, notice dt. 16th Jan., 1997 for asst. yr. 1993-94 is quashed and set aside.

The petition is allowed accordingly. Rule is made absolute. There shall be ho order as to costs.