BHARAT V PATEL Vs. UNION OF INDIA

JUDGEMENT

(1.) Invoking Article 226 of the Constitution, the petitioner has, in this petition, prayed for a writ of certiorari or any other appropriate writ or direction to quash the notice dated 15.7.2002 issued under section 148 of the Income-tax Act, 1961 (in short 'the Act') proposing to reassess the income of the petitioner. Initially, while issuing notice in this proceeding, the respondent concerned were directed to disclose to the petitioner the reasons for reassessment and not to proceed further in pursuance of the impugned notice. After grant of such ad-interim relief and statement of the learned senior counsel for the respondents that the Department would not proceed further in pursuance of the impugned notice, a detailed order dated 30.9.2003 was made after hearing the learned counsel so as to direct the petitioner to raise his objections before the Assessing Officer and directing the Assessing Officer to consider and dispose of the objections in accordance with law by a speaking order. That order was expressly made in accordance with the judgment of the Supreme Court in GKN DRIVESHAFTS (INDIA) LTD. v. INCOME-TAX OFFICER & ORS. [ (2003) 259 ITR 10 ]. The interim relief was confirmed to the extent that reassessment proceedings pursuant to the impugned notice were stayed except for deciding the objections to be raised by the petitioner. 1.1 Accordingly, the petitioner raised his objections by his representation dated 3.10.2003 and the same are decided and disposed by an elaborate order dated 28.10.2003 of the Assistant Commissioner of Income-tax, Circle-2, Vadodara. That order is placed on record by the petitioner, but it is not challenged before us and the learned counsel for the petitioner insisted upon this Court exercising its plenary powers to quash the notice under section 148 of the Act itself on the grounds which were canvassed before us.

(2.) The notice as above was sought to be assailed mainly on the grounds that the reasons statutorily required to be recorded before issuance of the notice under section 148 were not recorded at the relevant time, that those reasons were not intelligible or reasonable, that those reasons were not communicated in time despite an order of this Court and that even taking the reasons at their face value, they disclosed only a change of opinion of the officer even as the return of income filed in regular course was duly accepted by the Department and even the claim of refund was allowed. The learned counsel for the petitioner relied upon the judgments of this Court in VXL INDIA LTD. v. ASSISTANT COMMISSIONER OF INCOME-TAX [ 215 ITR 295 ], SURAT CITY GYMKHANA v. DEPUTY COMMISSIONER OF INCOME-TAX [ 254 ITR 733 ], and CALCUTTA DISCOUNT CO. v. ITO [ 41 ITR 191 (SC) ].

(3.) It would be necessary to refer to the relevant facts in order to appreciate the contentions of the petitioner. The petitioner filed his regular return of income in 'SARAL' Form No.2-D showing total income of Rs.1,84,45,766.00 on which the net tax payable was shown to be Rs.60,43,104.00. Out of that, the tax deducted at source was shown to be Rs.50,16,136.00 and, Rs.70,94,600/having been paid as advance tax, the balance tax refundable was calculated to be Rs.60,67,632.00. The said amount claimed as refund was, along with interest amounting to Rs.12,13,520.00, stated to have been allowed and the total of Rs.72,81,157.00 was stated to have been adjusted against an earlier demand. Intimation dated 21.1.2002 to that effect was issued under section 143 (1) of the Act.