SOHAN LAL SINGHANIA Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS writ petition is preferred against two notices issued under Section 148(1) of the Income-tax Act, 1961, on March 22, 1976, with respect to the assessment years 1967-68 and 1969-70. The assessments for the said two assessment years were made on October 30, 1971, and December 29, 1971, respectively. After receiving the impugned notices, the petitioner says that he filed revised returns on April 21, 1976. Along with the revised returns, the petitioner says, that he had enclosed a letter/application requesting that the reasons for reopening the assessments may be supplied to him. Since there was no reply from the Income-tax Officer to his request and reassessment proceedings were sought to be proceeded with, the petitioner came forward with this writ petition. A counter-affidavit has been filed by the Income-tax Officer. His case is that the assessment is sought to be reopened because the assessee has not disclosed certain facts in the original assessment proceedings. The facts said to have been not disclosed are the following :

(2.) SO far as the communication of the reasons is concerned, we are of the view that once the assessee filed revised return in response to the notice under Section 148(1) of the Income-tax Act and if he contends that the very initiation of reassessment proceedings is not valid in law for the reason that reasons are not recorded or that even if recorded, they are not relevant and germane, he becomes entitled to be communicated the reasons recorded under Section 148(2) of the Act. This is for the reason that, unless the said reasons are communicated to him, he would not be in a position to effectively contend and establish that the very initiation of reassessment proceedings is bad. We may, however, make it clear that, so far as the material/information is concerned, it need not be communicated forthwith to the assessee, but if any material or piece of evidence or information is sought to be used against the assesses, it is to be communicated to him and he ought to be given an opportunity to rebut the same. This is a requirement of the principle of natural justice. Accordingly, we direct that the Income-tax Officer shall communicate a copy of the reasons recorded by him under Section 148(2) of the Income-tax Act to the petitioner forthwith. It shall be open to the petitioner to file such further or fresh objections as he may be advised. The Income-tax Officer shall consider the same and pass final orders in accordance with law after giving an opportunity of hearing to the assessee.