Dilip Kumar Seth, J. - (1.) The notice dated March 27, 2002, issued under Section 148 of the Income-tax Act, 1961 (the "I. T. Act"), being annexure P2 to this petition, seeking to reopen the assessment in respect of the assessment year 1995-96 is the subject-matter of challenge in this writ petition. Learned counsel for the petitioner challenges the said notice on various grounds. The notice that has been issued is subject to a proviso to Section 147 since issued four years after the end of the relevant assessment year and as such is incompetent and without jurisdiction. Until it is shown that the income sought to be assessed had escaped assessment by reason of failure on the part of the assessee to make a return or to disclose fully and truly all material facts necessary for assessment, it cannot be reopened. The reopening could be made only if the authority is satisfied that there are reasons to believe that the income has escaped assessment. Though, the reason cannot be judged as to its sufficiency, yet the court can examine as to whether there are any reasons disclosed in the order of reopening. The notice was issued without the sanction of the Deputy Commissioner as was required under Section 151. On the merits, it was contended that the ground on which income was alleged to have escaped assessment was disclosed by the assessee. This was noted by the Assessing Officer. But the Assessing Officer did not disclose the said question in the assessment order. This according to him, cannot be a ground for reopening, unless it is shown, when the time limit of four years is applicable, that there was failure as contemplated in the proviso to Section 147. But no such reason has been recorded. The two conditions provided in Section 147, namely, the reasons to believe and failure to disclose fully and truly, are mandatory and must be satisfied before a case is reopened. These provisions are conditions precedent for exercising jurisdiction. These data having not been satisfied, the reopening is incompetent and without jurisdiction.
(2.) He relied on Ganga Saran and Sons P. Ltd. v. ITO ; Modi Spinning and Weaving Mills Co. Ltd. v. ITO and Calcutta Discount Co. Ltd. v. ITO. Relying on Calcutta Discount Co. Ltd.'s case, he contended that the question whether the Assessing Officer has reason to believe is not a question of limitation, it is a question of jurisdiction. He relied on CIT v. Burlop Dealers Ltd. and ITO v. Lakhmani Mewal Das, and contended that mere change of opinion in respect of an erroneous decision would not justify initiation of action for reopening. Relying on Orient Beverages Ltd. v. ITO, he contends that recorded reasons must show that the underassessment was due to failure of the assessee to disclose fully and truly all material facts. The question having been available before the authority on being disclosed and the evidence having been adduced, the said question cannot be reopened unless it is shown that some fresh facts are available. He relied on ITO v. Kamal Singh Rampuria. In the name of reopening, the deficiency in the first completed assessment cannot be cured, unless necessary conditions for exercise of jurisdiction are fully present. He relied on Dunlop Rubber Co. Ltd. (London) v. ITO. He relied on Chhugamal Rajpal v. S.P. Chaliha, to contend that the safeguards provided in Sections 147 and 151 are not to be lightly treated by the Assessing Officer or the Commissioner. Since such protection is mandatory, it cannot be waived or acquiesced neither it is subjected to estoppel. He relied on P. V. Doshi v. CIT [1978] 113 ITR 22 (Guj).
(3.) Mr. Rupen Mitra, learned counsel for the respondents, on the other hand, points out that the sanction as required under Section 151 of the Deputy Commissioner has since been obtained. He then contends that in this case there was failure to disclose fully and truly the materials relevant for assessment, which has since escaped notice. The reasons were sufficient. In any event, those reasons are not justiciable, as to their sufficiency, by the court. Relying on Section 147, Explanations 1 and 2, particularly, Clause (c)(i) of Explanation 2, he points out that this is a case of underassessment and as such it is a case of escapement of assessment within the meaning of the proviso. That the materials produced before the Assessing Officer cannot be a ground to contend that the materials were disclosed truly and fully, in view of Explanation 1, which stands in the way of the petitioner's contention. According to him, if there is a mistake in terms of Section 292B, the same also can be the subject-matter of reopening.;