BANSAL K M Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) A common question arises in this batch of six writ petitions. They can, therefore, be disposed of by a common order. The question is :

(2.) THE assessee was a partner in three partnership firms during the "previous year" relevant to the assessment years 1983-84 to 1987-88. THE petitioner states that he had no income other than the share income from the said partnerships. He filed returns and assessments were completed according to law. On August 10, 1988, a search was conducted at the business premises of the said three partnership firms under Section 132 of the Act. THE residential premises of the partners, including the petitioner, were also searched and certain documents were seized. Summary assessments were made under Sub-section (5) of Section 132 holding that the partnerships concealed substantial income. Against the said orders, the petitioner says, representations were filed under Sub-section (11) of Section 132, which are pending now. While so, the second respondent, namely, the Assistant Commissioner of Income-tax, Investigation Circle 2(1), Agra, issued notices under Section 148 for the assessment year 1983-84 on March 23, 1989, and for the assessment years 1984-85 to 1987-88 on March 9, 1989. In response to these notices, the petitioner filed returns under protest with respect to all the assessment years. Along with the returns, he submitted a letter of request to the second respondent to supply him a copy of the "reasons" recorded for initiating the said reassessment proceedings. He relied upon the decision of the Delhi High Court in New Bank of India Ltd. v. ITO [1982] 136 ITR 679 in support of his right to be supplied with the reason. THE second respondent, however, did not supply a copy of the reasons. It is then that the petitioner approached this court with the present writ petition, praying for issuance of an appropriate writ, order or direction quashing the notices issued under Section 148 and also for a further direction to the respondents to communicate the reasons recorded under Section 148(2) to the petitioner.

(3.) THE impugned notices under Section 148 were issued in March, 1989, that is, prior to the amendment of Section 147 by the Direct Tax Laws (Amendment) Act, 1989, with effect from April 1, 1989. In other words, the notices were issued under Section 147 as it stood prior to April 1, 1989. According to the said provision, if the Assessing Officer has reason to believe that, by reason of the omission or failure on the part of the assessee, inter alia, to disclose fully and truly all material facts necessary-for his assessment for an assessment year, income chargeable to tax has escaped assessment for that year, he can reopen the assessment and make a reassessment subject to the provisions of Sections 148 to 153. This power is also available where there is no omission or failure on the part of the assessee, but the Assessing Officer has reason to believe, in consequence of information in his possession, that income chargeable to tax has escaped assessment for an assessment year. Here again, he has to act in accordance with Sections 148 to 153. Section 148, as it stood at the relevant time, provided that before making reassessment under Section 147, the Assessing Officer shall serve on the assessee a notice containing the requisite particulars. Sub-section (2) of Section 148, however, says that, before issuing such notice, the Assessing Officer shall record his reasons for doing so. For the present purpose, it is not necessary to notice the provisions contained in Sections 148 to 153. It would, however, be appropriate to set but Sub-section (2) of Section 148, which consists of only one sentence. It reads :