B.P. Jeevan Reddy, C.J. - (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 : " Whether the assessee has a right to compel the Assessing Officer to communicate to him the reasons recorded by the Assessing Officer under Sub-section (2) of Section 148 of the Income-tax Act, 1961--whether before the filing of the return or thereafter ?" For the sake of convenience, we shall state the facts in Civil Misc. Writ No. 165 of 1991.
(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. The petitioner's case is that the assessments have been reopened without forming the requisite satisfaction/belief and under a mere suspicion. It is alleged that the assessments have been reopened with a view to make a fishing and roving inquiry and that, in fact, there was no material in the possession of the Department which could have led them to believe that any income has escaped assessment within the meaning of Section 147 of the Act. The petitioner's further case is that, if at all, the only basis for reopening the assessments could be the material gathered during the search and the order made under Sub-section (5) of Section 132. But, says the petitioner, the said order is only a summary assessment and, in any event a representation against the same is pending under Section 132 (11) and, until that is disposed of, the order made under Section 132(5) or the material contained therein cannot constitute relevant material for reopening the assessments. At the hearing of the writ petition, learned counsel for the petitioner, Sri Ashok Khare, placed strong reliance upon the judgment of the aforementioned Delhi High Court case New Bank of India v. 7TO [1982] 136 ITR 679. He submitted that, in reassessment proceedings, the assessee is entitled to question the validity of the very initiation of proceedings under Section 147/148 and this he cannot do effectively until and unless the reasons recorded by the Assessing Officer under Sub-section (2) of Section 148 are communicated to him. He submitted that there is no provision in the Act which prohibits such communication. Counsel says that principles of natural justice do require such communication. We have heard learned counsel for the petitioner as well as learned additional standing counsel for the Revenue at length." They have brought to our notice several decisions of the Supreme Court and High Courts relevant to the question :
(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 : "(2) THE Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so." Before we deal with the decisions cited by both counsel, it would be appropriate to examine the contention on principle. A notice under Section 148 has to be issued calling upon the assessee to file his return of income where the Assessing Officer has reason to believe that income has escaped assessment for one or the other reason mentioned in Section 147. Section 147, in so far as relevant, reads as follows : "If--(a) the Assessing Officer has reason to believe that, by reason of the omission or failure on the part of an assessee to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year." ;