COMMUNIDADE OF CHICALIM BY ITS ATTORNEY(PROCURADOR vs. INCOME TAX OFFICER, WARD I, MARGAO, GOA,AND ORS

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WP/11/1993HC BombayHCBM05000158199319 November 2003Bench: A.M.KHANWILKAR,P. V. HARDAS2 pages
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What did the High Court hold?

The High Court held that the impugned notices issued under Section 148 of the Income Tax Act, 1961, for Assessment Years 1983-1984, 1984-1985, and 1985-1986 could not be sustained in law. The Court reasoned that the petitioner's assertions regarding the failure of the authorities to furnish recorded reasons for the issuance of the notices and to provide inspection of records remained uncontroverted, despite the petition being filed in 1993. The Court found it unacceptable to grant further time to the respondents to file a reply at such a late stage. Therefore, the writ petition was allowed, quashing the notices. The Court clarified that it would be open for the authorities to proceed in the matter after following due procedure as permitted by law. No costs were awarded. The ratio decidendi is that failure to provide recorded reasons for issuing reassessment notices, when specifically challenged and not controverted, vitiates the notices.

What were the facts?

The petitioner, Comunidade of Chicalim, filed a Writ Petition under Article 226 of the Constitution of India challenging notices issued under Section 148 of the Income Tax Act, 1961. These notices pertained to Assessment Years 1983-1984, 1984-1985, and 1985-1986. The petitioner's primary assertion was that the income tax authorities failed to provide the recorded reasons for issuing these notices, dated August 20, 1991, and did not permit inspection of the relevant records. The petition was filed in 1993, and as of the judgment date, November 19, 2003, the respondents had not filed a reply controverting these assertions. The respondents' counsel sought further time to produce records and file a reply, which was denied by the Court.

What were the issues?

1. Whether the notices issued under Section 148 of the Income Tax Act, 1961, for Assessment Years 1983-1984, 1984-1985, and 1985-1986 are sustainable in law, given the alleged failure of the authorities to furnish the recorded reasons for their issuance and to provide inspection of relevant records to the petitioner? (Question of law and fact, turning on Section 148 of the Income Tax Act, 1961). Assessee's Contention: The petitioner argued that the authorities failed to furnish the recorded reasons for issuing the impugned notices and did not provide inspection of the records, materials, and documents to the petitioner. The petitioner's assertions in the writ petition remained uncontroverted. Revenue's Contention: The learned counsel for the respondents prayed for time to produce relevant records and file a reply affidavit to controvert the petitioner's position. No specific legal arguments were recorded.

Which sections of the Income-tax Act were involved?

Section 148

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF BOMBAY AT GOA

***

WRIT PETITION NO. 11 OF 1993 Comunidade of Chicalim, by its Attorney (Procurador), Shri J.J.S. Rodrigues, r/o Chicalim, Goa.

...Petitioner.

Versus

1.

Income Tax Officer, Ward I, Margao, Goa, 2. Union of India (through the Secretary to the Government of India, Ministry of Finance, New Delhi).

...Respondents.

Shri A. F. Diniz, advocate for the petitioner. Shri S. R. Rivonkar, advocate for the respondents.

CORAM : A. M. KHANWILKAR &

P. V. HARDAS, JJ.

DATE : 19th November, 2003. ORAL JUDGMENT (Per Khanwilkar, J.)

This Writ Petition under Article 226 of the Constitution of India in substance questions the Notices under Section 148 of the Income Tax Act, 1961, issued to the petitioner in respect of the Assessment Years 1983-1984, 1984-1985 and 1985-1986.

The only question that arises in this petition and has been asserted on affidavit by the petitioner is that the authorities have not furnished reasons recorded for issuance of the impugned Notices dated 20th August, 1991, nor provided inspection of the records, materials, documents, etc. to the petitioner. Although this petition has been filed as far back as in 1993, till today, no reply has been filed

- 2 - controverting the aforesaid assertion made in the Writ Petition. Indeed Shri Rivonkar, learned counsel for the respondents, prayed for time to produce relevant records and to file reply affidavit controverting the above position. It is not possible for us to countenance such a request at this distance of time. As mentioned earlier, the assertions made in the Writ Petition having remained uncontroverted, it necessarily follows that the impugned Notices cannot be sustained in law for having failed to furnish reasons recorded by the authority to the petitioner.

2.

In the circumstances, this Writ Petition succeeds in terms of prayer Clauses (a) and (b). It is however made clear that it will be open to the authorities to proceed in the matter after following due procedure as may be permitted by law. No costs.

A. M. KHANWILKAR, J.

P. V. HARDAS, J. mc.

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