INCOME TAX OFFICER Vs. NILOFER HAMEED

JUDGEMENT

(1.) THIS writ appeal is filed by the Income-tax Officer, Ward-I, Ernakulam, against the judgment of a learned single judge of this court in O. P. No. 17555 of 1997 (see [1999] 235 ITR 161). The petitioners in the original petition are the respondents. The facts of the case are as follows :

(2.) AS per the return, there was no taxable income for the years 1986-87 and 1988-89. Therefore, the petitioners did not file the returns for these years. However, returns were filed for the assessment year 1987-88 declaring the share income of Rs. 16,530. Proceedings were initiated against the petitioners and the petitioners were served with notices under Section 148 of the Income-tax Act (hereinafter referred to as "the Act") for the assessment years 1986-87 and 1988-89, on March 29, 1994. No further notice under Section 142(1) of the Act or any proposal to complete the assessments of the petitioners were issued by the respondent. So by virtue of the provisions of Section 153(2) of the Act, the proceedings initiated by notice dated March 21, 1994, got barred by limitation on March 31, 1996. It appears, subsequently, another set of notices dated March 25, 1997 under Section 148 of the Act were served on the petitioners on March 27, 1997, copies of which are produced as exhibits P-9 to P-12. Subsequently, the petitioners were served with notices dated August 6, 1997, and September 22, 1997, under Section 142(1) of the Act. Copies of the abovesaid notices are marked as exhibits P-13 and P-14. The petitioners were informed subsequently by letters dated August 27, 1997, and September 19, 1997, that in case of non-compliance with the notices issued under Section 148 of the Act ex parte assessments will be made in the case of the petitioners on the basis of the materials available. Copies of the letters are marked as exhibits P-15 and P-16. The original petition was filed for a declaration that reassessment proceedings initiated as per exhibits P-9 to P-12 are illegal and without jurisdiction and to quash exhibits P-9 to P-14 and for other reliefs.

(3.) THE learned judge discussed the points from paragraph 14 onwards. In paragraph 14, the learned judge stated as follows (page 168) : "As already stated, no assessments were made. THE respondent issued fresh notices under Section 148 of the Act on March 25,1997 (exhibits P-9 to P-12). Since the petitioners did not respond to the said notices also the respondent issued notices dated August 6, 1997, and September 22, 1997, exhibits P-13 and P-14, respectively, asking the petitioners to file returns and documents. Two other notices dated August 27, 1997, and September 19, 1997 (exhibits P-15 and P-16), were also issued to the petitioners posting the assessments for final hearing: THE question to be decided is as to whether the second notice under Section 148 issued on March 25, 1997, is legal and valid". THE learned single judge decided to consider the question whether the notices, exhibits P-9 to P-12, issued were hit by the provisions of Section 149(1) of the Act. Under the provisions of Section 149(1), no notice under Section 148 shall be issued in cases falling under Clause (a) of Section 147 for the relevant assessment year if eight years have elapsed from the end of that year, unless the income chargeable to tax which has escaped assessment amounts or is likely to amount of Rs. 50,000 or more for that year. But this is subject to the rider in Section 151 of the Act which says that if notice under Section 148 is to be issued beyond eight years from the end of the relevant assessment year, the sanction from the Board is required and for issuing notice under Section 148 beyond four years from the end of the assessment year, the sanction of the Commissioner is required. Notice dated March 25, 1997, is beyond four years from the end of the assessment years 1986-87 and 1988-89. It is stated in the counter affidavit that sanction from the Additional Commissioner of Income-tax was obtained as provided under Section 151 of the Act. In view of the said sanction, notice under Section 148 of the Act can be issued for the year 1986-87 till March 31, 1995, and for the assessment year 1988-89 till March 31, 1997. It is clear that the second notice under Section 148 of the Act issued by the respondent on March 25, 1997, and served on the petitioners on March 27, 1997, in so far as it relates to the year 1986-87 is beyond the time provided under Section 149(1) of the Act. But the said notices are well within the time in so far as it relates to the assessment year 1988-89. THE learned judge took the view that the Assessing Officer can issue any number of notices under Section 148 of the Act provided the conditions stipulated in Section 147 are satisfied. THE learned judge also took the view that if an assessment is pending either by way of original assessment or by way of reassessment proceedings, the Assessing Officer cannot issues a notice under Section 148 of the Act, but if no proceedings are pending either by way of original assessment or by way of reassessment, he can issue a notice under Section 148 within the time limit. Thus, the learned judge came to the conclusion that the reassessment proceedings for the year 1988-89 was valid and for the year 1986-87 was quashed. It is against that this writ appeal is filed.