SAVITA MIHANI Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) KEEPING in view the similarity of the controversy involved in these writ petitions, though they were heard on two different dates, they are disposed of by a singular order. For the sake of clarity and convenience, the facts in Writ Petn. No. 16760 of 2007 are exposited herein.

(2.) THE petitioner, a regular assessee under the IT Act, 1961 (for brevity 'the Act'), had filed return for the asst. yr. 2000 -01 and an assessment order was passed by the ITO, Itarsi. The assessment was reopened under s. 148 of the Act on the ground that certain income had escaped assessment and (there) was under -assessment. After verification of the case, the IT return was accepted with the modification and the share income of the firm was taken as per the firm's the assessee -petitioner to file a return and an identical notice was issued for the asst. yr. 2002 -03.

(3.) AS pleaded, the petitioner filed an application and prayed the respondents to furnish the reasons for the belief that the income had escaped assessment for issue of a notice. The respondents forwarded the reasons recorded by them stating that the Police Department had made inquiries according to the acquisition of the assets which were disproportionate to the known source of income. The assessee was provided the reasons with a copy of the letter. The reasons have been brought on record as per Annex. P/5. It is contended that the action of the police investigation was M.Cr.C. No. 10496 of 2005. It is put forth that the proceedings for reassessment initiated by issuance of notice under ss. 147 and 148 of the Act are without jurisdiction and without any authority of law. It is averred that the reasons that have been recorded do not indicate any information as to investment of any such amount during the relevant accounting year. The report of the police has been treated as sacrosanct and the proceedings have been initiated without any application of mind. The jurisdiction of the authority has been challenged on the ground that there has been no sanction and even if there is anything, that has been done in a mechanical manner. It is put forth that the notice had been issued solely on the basis of the report submitted by the police and it is founded on suspicion and hence, it cannot form the foundation of notice under s. 147 of the Act. Emphasis has been laid on the concept of reasons to believe and in that background, a prayer has been made for issue of a writ of certiorari for quashment of the initiation of proceedings under s. 147 of the Act and issue of notice under s. 148 of the Act.