MOHD. MOINUDDIN HUSSAIN VS INCOME-TAX OFFICER
2001 P T D 3217
[240 I T R 220]
[Andhra Pradesh High Court (India)
Before P. Venkatarama Reddi and B. Prakash Rao, JJ
MOHD. MOINUDDIN HUSSAIN
Versus
INCOME‑TAX OFFICER
Writ Petitions Nos.7161 and 7020 of 1989, decided on 12/08/1999.
Income‑tax‑‑‑
‑‑‑‑Reassessment‑‑‑Writ‑‑‑Notice‑‑‑Failure to disclose material facts necessary for assessment‑‑‑Notice on ground that there had been under assessment of capital gains because assessed had given a lower value of land on 1‑1‑1964, than one shown to Wealth Tax Authorities and had also not disclosed that he was being assessed to wealth tax‑‑Prima facie case made out for assessment‑‑‑Question whether there was a failure to disclose material facts necessary for assessment could be decided by assessing and Appellate Authorities‑‑‑Writ would not issue to quash notice‑‑‑Indian Income Tax Act, 1961, S.147(a)‑‑‑Constitution of India, Art.226.
A notice of reassessment was issued in respect of the assessment year 198.1‑82 under section 147(a) of the Income Tax Act, 1961. The suppression or failure to disclose the material facts had arisen, according to the Department, on account of the fact that the petitioner claimed a fair market value as on January 1, 1964, of the land which was sold during the assessment year 1981‑82 at much less than what was shown in the wealth tax return for the year 1978‑79. It was also the case of the Department that in the returns filed, the petitioner failed to disclose that he was subjected to wealth tax in respect of the same item of property. On a writ petition to quash the notice:
Held, dismissing the writ petition, that there was a prima facie case to proceed under. section 147. The question whether or not in the circumstances of the case, the omission to divulge the previous year's wealth tax assessment and the valuation that he gave in the previous proceedings amounted to non‑disclosure of material facts within the meaning of section 147(a) of the Act was a matter to be more appropriately decided by the assessing and appellate authority under the Act. These were not fit cases to exercise jurisdiction under Article 226 of the Constitution of India to stop the proceedings under sections 147 and 148 of the Act at the threshold. The notice could not be quashed.
CIT v. Jeskaran Bhuvalka (1970) 76 ITR 128 (AP) and Gemini Leather Stores v. ITO (1975) 100 ITR 1 (SC) ref.
A. Satyanarayana for Petitioner
J.V. Prasad for Respondent.
JUDGMENT
P. VENKATARAMA REDDI, J.‑‑‑The petitioner seeks a writ of prohibition directing the respondent from proceeding further with the re assessment proceedings initiated by him under section 148 of the Income Tax Act, 1961 (for short "the Act"), in respect of the assessment year 1981‑82 pursuant to the notice, dated March 29, 1989. It is seen from the counter affidavit filed that the reasons were recorded in the file. It is clarified in the counter that the reassessment is referable to section 147(a) of the Act. It is stated in the counter‑affidavit that the petitioner failed to disclose the material facts as regards the fair market value of the land as on January 1, 1964, in the course of assessment proceedings under the Act for the year 1981‑82 which resulted in underassessment of "capital gains". The suppression or failure to disclose the material facts has arisen, according to the Department, on account of the fact that the petitioner claimed a fair market value as on January 1, 1964, of the land which was sold during the assessment year 1981‑82 at much less than what was shown in the wealth tax return for the year 1978‑79. It is also the case of the Department that in the returns filed, the petitioner failed to disclose that he was subjected to wealth tax in respect of the same item of property. It is on these premises the proceedings were sought to be reopened under section 147 read with section 148 of the Act. This Court stayed the further proceedings.
Relying on the decision of this Court in CIT v. Jeskaran Bhuvalka (1970) 76 ITR 128 and of the Supreme Court in Gemini Leather Stores v. ITO (1975) 100 ITR 1, learned counsel for the petitioner submits that the petitioner disclosed all the primary facts necessary to make assessment under the Act and there was no suppression or non‑disclosure of fact at all. It is contended that the assessee was under no obligation to disclose about the previous wealth tax assessment. We are of the view that the contention of the petitioner is at least debatable and the explanation put forward by him has to be decided by the assessing and appellate authorities under the Act. Whether, or not in the circumstances of the case, the omission to divulge about the previous year's wealth tax assessment and the valuation that he gave in the previous proceedings amount to non‑disclosure of material facts within the meaning of section 147(a) of the Act is a matter which ought to be more appropriately decided by the assessing and appellate authority under the Act. As we observed earlier, there is scope for argument and scope for a further probe. We cannot say that there is not even a prima facie case to proceed under sections 147 and 148. We do not, therefore, think that these are fit case to exercise jurisdiction under Article 226 of the Constitution of India to stop the proceedings under sections 147 and 148 of the Act at the threshold. The ratio of the decisions cited by learned counsel do not come to the rescue of the petitioner having regard to the view taken by us. Even on the application of the dicta laid down therein, we are unable to say that the case is such which merits interference under Article 226 of the Constitution of India against the notice issued. It is open to the petitioner to raise all the objections to the proposed reassessment before the assessing authority. We, therefore, see no merit in the writ petitions and they are dismissed with costs quantified at Rs.500 in each case.
M.B.A./314/FCPetition dismissed.