R.K. Agrawal, J. - (1.) BY means of the present writ petition filed under Article 226 of the Constitution of India, the petitioner, Manish Kumar, has challenged the notice dated 24.7.2000, filed as Annexure 4 to the writ petition, issued by the Income Tax Officer, Ward 1(6), Agra, respondent No. 1, in respect of the assessment year 1993 -94. The reason for issuance of the notice dated 24.7.2000, as per the order sheet, a copy of which has been filed as Annexure 5 to the writ petition, is that the petitioner had claimed Rs. 24,776 - as expenses, which is approximately 40% of the total incentive bonus of Rs. 61,941/ -, in his return of income, which has been allowed. The said amount has escaped assessment as no expenses is allowable against incentive bonus shown by the petitioner.
(2.) WE have heard Sri Rakesh Ranjan Agrawal. learned Counsel for the petitioner, and Sn A.N. Mahajan. learned Standing Counsel, appearing for the respondents. Sri Rakesh Ranjan Agrawal, learned Counsel, submitted that in the intimation send under Section 143(1A) of the Income 'Fax Act, 1961 (hereinafter referred to as "the Act"), the return filed by the petitioner was accepted and a sum of Rs. 5,900 - alongwith interest was refunded. However, on account of some audit objection, the respondent No. 1 passed an order under Section 154 of the Act bringing to tax the amount of deduction claimed against incentive bonus, which order was set aside by the Commissioner of Income Fax (Appeals) on the ground that the issue was debatable. Fie, therefore, submitted that in view of decision of the Commissioner of Income Tax (Appeals), the respondent No. 1 did not have any material so as to form a reasonable belief that the income has escaped assessment to tax warranting proceeding under Sections 147/148 of the Act. He further submitted that during the relevant period the limitation for taking proceeding under Sections 147 148 of the Act was four years and. in the event, the income chargeable to tax has escaped assessment was Rs. 25,000 - or more, the limitation would be seven years in view of Clause (b) of Sub -section (1) of Section 149 of the Act, as it stood during the relevant period. According to him, as, admittedly, in the present case the income which has escaped assessment to tax has been found to be Rs. 24,776/ - which is less than Rs. 25,000 -, the proceeding for reassessment could have been taken within four years from the end of the assessment year, i.e., on or before 31.3.1998, the assessment year being 1993 -94 and not on 24.7.2000 when the notice under Section 148 has been issued, which is beyond the period of four years.
(3.) SRI A.N. Mahajan, learned Standing Counsel, however, submitted that, from the computation sheet, it appears that the incentive bonus of Rs. 61,941/ - was earlier deducted and thereafter only a sum of Rs. 37,165' - was added, which shows that the income which has escaped assessment to tax is more than Rs. 25.000 - and, therefore, the reassessment proceeding could have been taken within a period of seven years.;