Ramballabh Gupta vs Assistant Commissioner of Income Tax and Others

A.M. Sapre, J.—The decision rendered in this writ shall also govern disposal of other connected writ petitions being Writ Petn. Nos. 405, 406, 417, 418, 419, 420, 421, 461, 462, 466, 467 and 468 of 2005, as in all these writs common question of fact and law is involved.

By filing this writ under Articles 226/227 of the Constitution of India, the petitioner--an assessee under the IT Act seeks to challenge a notice, dt. 24th March, 2004 (Annex. P-2), issued by an AO (respondent No. 1) under s. 148 of IT Act to the petitioner for making reassessment of the asst. yr. 1997-98.

In the opinion of AO, he has a reason to believe that income of petitioner (assessee) chargeable to tax for the asst. yr. 1997-98 has escaped assessment within the meaning of Section 148 ibid and hence, impugned notice is issued and served on the petitioner. In support, on being asked by the petitioner, the AO has supplied the reasons (Annex. P-6).

The challenge to impugned notice is made essentially on the ground inter alia, that the same is issued in contravention of Section 153A of the Act and hence, could not have been issued for the year in question i.e., 1997-98. In other words, what is contended on behalf of petitioner is that since the impugned notice is founded on raid conducted in petitioner''s premises on 8th Oct., 2003 in accordance with the provisions of Section 132 ibid, the notice for reassessment could be issued and confined to six assessment years as provided in Section 153A(a) of the Act. It is contended that six years for reopening of assessments in the case of petitioner would be upto asst. yr. 1998-99 and hence, notice issued u/s 148 for the asst. yr. 1997-98 is bad being beyond the six year period prescribed u/s 153A ibid. It is further contended that in a case of raid, the reassessment can only be made for previous six years as per requirement of Section 153A ibid and in cases of reassessment of raid, Section 148 of the Act has no application by virtue of overriding effect contained in Section 153A ibid. It is on this basis, the impugned notice of reassessment issued u/s 148 of the Act for the year in question, i.e., 1997-98 is challenged in this writ at the threshold.

On notice being issued to the respondents, a return is filed justifying issuance of notice u/s 148 of the Act.

Heard Shri G.M. Chafekar, learned senior Counsel, with Shri D.S. Kale, learned Counsel for the petitioner, and Shri R.L. Jain, learned senior counsel, with Ku. V. Mandlik, learned Counsel for respondents.

Learned Counsel for the petitioner in his submission reiterated the aforementioned contentions and urged that impugned notice being totally without jurisdiction is liable to be set aside. Placing reliance on decisions rendered in the cases reported in Iridium India Telecom Ltd. Vs. Motorola Inc., ; M/s. Orient Paper and Industries Ltd. and another Vs. State of Orissa and others, (para 11/12) and Narcotics Control Bureau Vs. Kishan Lal and others, and on a passage from the book Interpretation of Statute by G.P. Singh (92 Edn., p. 220) learned Counsel contended that on true interpretation of the expression "notwithstanding anything contained in Sections 139, 147, 148, 149, 151, 153" employed in Section 153A of the Act, the AO had no jurisdiction to issue notice of reassessment for the asst. yr. 1997-98 by taking recourse to provisions of Section 148 ibid. In reply, learned Counsel for the Revenue supported the issuance of impugned notice.

Having heard learned Counsel for the parties and having perused record of the case, I find no merit in these writs. As a consequence, the writ is liable to be dismissed.

In my considered opinion, the AO was justified in issuing notice of reassessment u/s 148 of the Act for the asst. yr. 1997-98. In a case of this nature, what is required to be seen is, whether notice issued u/s 148 satisfies the requirement contained in Section 148 or not. In other words, in order to decide the legality and validity of notice issued u/s 148 ibid, it is necessary to see as to whether condition precedent provided in Section 148 ibid are satisfied or not. Once the conditions prescribed u/s 148 ibid are found present in the notice issued then, in that event, the notice has to be upheld being issued in conformity with the requirement of Section 148 ibid.

In my opinion, while deciding the legality of notice issued u/s 148, it is not necessary to look to the provisions of Section 153A ibid because both sections operate in different field and sphere. Admittedly, the assessment year in question i.e., 1997-98 does not fall within six years as per requirement of Section 153A ibid and hence, no action can be taken for making reassessment u/s 153A ibid in respect of asst. yr. 1997-98. Had it been so, then the question might have arisen as to whether provisions of Section 148 can be resorted to by AO in respect of those six years whose reassessment is to be made by issuing notice u/s 153A ibid or vice versa namely--whether notice u/s 153A could be issued in respect of asst. yr. 1997-98.

In other words, the AO may not have jurisdiction to issue notice u/s 148 of the Act in respect of those six assessment years which fall within the exclusive jurisdiction of Section 153A ibid. Such is not the case here.

As observed supra, admittedly, the AO has issued notice of reassessment u/s 153A in respect of six assessment years i.e., 2003-04 to 1998-99 whereas he (AO) has issued impugned notice of reassessment for the asst. yr. 1997-98 u/s 148 which is subject-matter of this writ.

I was not impressed by the submission of learned counsel for the petitioner when he strenuously urged that in cases of search, Section 148 has no application and secondly, no order for reassessment can be passed beyond six years as provided in Section 153A ibid.

As I have observed supra, Section 148 being an independent section, powers exercised by AO cannot be curtailed if the impugned notice otherwise satisfies the requirement of Section 148 ibid. In my opinion, the only fetter put on the powers of AO in taking recourse to Section 148 is that it cannot be issued in relation to those six assessment years which are defined in Section 153A ibid. This fetter is due to use of non obstante clause in Section 153A ibid. In all other cases and for all other assessment years, Section 148 can always be resorted to subject of course to condition that it must satisfy the requirement specified in Section 148 ibid.

In view of aforesaid discussion, I need not elaborately deal with the case law cited by the learned counsel for the petitioner which deals with interpretation of word ''notwithstanding.''

It is not the case of petitioner that the impugned notice does not satisfy the requirement of Section 148 ibid. On the other hand, it clearly appears that first notice u/s 148 could be issued for the asst. yr. 1997-98 being well within time. Secondly, the AO was empowered and had an authority to issue such notice. Thirdly, notice contains reasons as required u/s 148 and which are supplied to the petitioner and lastly on the strength of material collected in the raid conducted on 8th Oct., 2003 in the premises of petitioner a formation of belief for escape assessment could validly be formed for reopening of assessment made for the year 1997-98. Indeed as observed supra, the petitioner did not challenge the notice on any of these grounds which alone could be made basis to challenge the impugned notice it being issued u/s 148 ibid and hence, there is no difficulty in upholding the impugned notice which is rightly issued in conformity with the requirement of Section 148 ibid.

In view of aforesaid discussion, I do not find any merit in the writ. It is accordingly, dismissed. As a consequence, all interim orders are vacated. No costs.