IN THE HIGH COURT OF KERALA AT ERNAKULAM
WA.No. 970 of 2010()
1. K.P.ABDUL MAJEED,"SONA",KOTTARAM ROAD,
... Petitioner
Vs
1. ASST.COMMISSIONER,CIRCLE 1(1)CALICUT.
... Respondent
2. COMMISSIONER OF INCOME TAX,CALICUT.
For Petitioner :SRI.P.RAGHUNATH
For Respondent : No Appearance
The Hon'ble the Chief Justice MR.J.CHELAMESWAR
The Hon'ble MR. Justice P.N.RAVINDRAN
Dated :06/07/2010
O R D E R
J.Chelameswar, C.J. & P.N.Ravindran, J.
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W.A. No.970 of 2010
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Dated this the 6th day of July, 2010
JUDGMENT
J.Chelameswar, C.J.
Aggrieved by the judgment dated 3rd March, 2010 in
W.P.(C) No.3334 of 2010 the unsuccessful petitioner therein
preferred the instant writ appeal.
2. The appellant herein received a notice under Section
148 of the Income Tax Act dated 5.2.2009. The substance of the
notice is that the assessing authority is of the opinion that some
income of the appellant escaped assessment during the assessment
year 2004-05 and therefore called upon the appellant to explain
certain transactions specified in the notice and also to file an
appropriate return.
3. It can be seen from the scheme of the Income Tax Act
that under Section 147 of the Act the assessing officer is authorised
to make an assessment or re-assessment, as the case may be, if the
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assessing officer has reason to believe that any income
chargeable to tax had escaped assessment subject to the various
conditions and limitations specified in Section 147, details of
which may not be necessary in the instant case. Section 148 of
the Act stipulates that before the power under Section 147 of the
Act is resorted to, the assessee is required to be put on notice as
to the intention of the assessing authority to resort to the power
under Section 147 of the Income Tax Act.
4. Pursuant to the notice dated 5.2.2009, an
assessment under Section 147 of the Income Tax Act admittedly
came to be passed by the assessing authority on 30th December,
2009 (Ext.P12). It is in this background that the writ petition
came to be filed with the prayers as follows:
“It is therefore prayed that this Hon’ble Court
may be pleased to call for the records leading to the
issue of Ext.P1 notice u/s 148 of the Act as also
Ext.P12 assessment order for the year 2004-05, hear
arguments on behalf of the petitioners and:
A. Issue a writ of certiorari quashing the
original of Ext.P1 notice u/s 148 of the IT Act.
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B. Issue a writ of certiorari quashing the
original of Ext.P12 assessment order for 2004-05.
C. Grant such other reliefs that the Petitioners
may pray for and this Hon’ble Court may deem fit to
grant;
D. Award costs of the petitioners.”
5. It can be seen from the above extracted prayers in
the writ petition that the appellant herein challenges both the
notice issued under Section 148 of the Income Tax Act as well
as the assessment order passed under Section 147 of the Act
pursuant to the abovementioned notice.
6. A learned Judge of this Court by the judgment
under appeal dismissed the writ petition on the ground that the
assessment order (Ext.P12) is an appealable order under the
provisions of the Income Tax Act.
7. Sri.P.Raghunath, learned counsel for the appellant,
however, argued that though Ext.P12 order is an appealable
order, the notice issued under Section 148 of the Act (Ext.P1) is
not an appealable proceeding and therefore the learned Judge
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fell into error in rejecting the writ petition on the ground that
there was an effective alternative remedy available to the
appellant.
8. We regret our inability to accept the submission
made by the learned counsel for the appellant. No doubt, as
contended by the learned counsel for the appellant, Ext.P1
notice under Section 148 of the Income Tax Act is not an
appealable proceeding. But such a proceeding culminated in an
assessment order (Ext.P12). The objection of the appellant
appears to be that the whole exercise under Section 147 of the
Income Tax Act is permissible only if the assessing authority
has reasons to believe to proceed under Section 147 and such
belief must be a rational belief which is capable of being
ascertained from the content of the notice. In the instant case
the notice does not disclose any such material which could have
formed the basis for a reasonable belief of escapement of
income from the assessment in the mind of the assessing
authority.
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9. We are of the opinion that an examination of the
contents of the notice under Section 148 of the Act at this stage
after the assessment under Section 147 of the Act is completed
is not to be entertained in a proceeding under Article 226 of the
Constitution of India. It is a different matter if the appellant
had approached this Court immediately after the receipt of the
notice under Section 148 of the Act, but that is not the case on
hand. In the circumstances, we are of the opinion that the
learned Judge was justified in rejecting the writ petition on the
ground that a statutory appellate remedy is available to the
appellant. We see no reason to take a different view. Writ
appeal is therefore dismissed at the admission stage.
After the order is dictated, learned counsel for the
appellant submitted that in view of the order passed, the
appellant may be given liberty to prefer the statutory appeal and
the respondent may be directed to entertain the appeal as
otherwise the appeal would be rejected as time barred. In view
of the pendency of the proceedings in this Court, we deem it
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appropriate to grant the liberty as sought for by the appellant and
direct the respondent to entertain the appeal against Ext.P12
order if presented before the appropriate appellate authority
within a period of three weeks from today and pass appropriate
orders on such appeal in accordance with law.
J.Chelameswar,
Chief Justice
P.N.Ravindran,
Judge
vns