INDIRA BANERJEE,J. - (1.) IN this writ application the petitioner has, inter alia, challenged the initiation of proceedings under Section 147 of the IT Act, 1961, for the asst. yr. 1994 -95, and the consequential issuance of a notice dt. 20th March, 2001 under Section 148 of the said Act, on the allegation that the respondent No. 1 had reasons to believe that the petitioner's income, chargeable to tax for the aforesaid asst. yr. 1994 -95, had escaped assessment.
(2.) THE facts giving rise to the writ petition are very briefly enumerated hereinafter. The petitioner claims to carry on business of export inter alia of light engineering goods and marine products as sole proprietor of Raylon Industries and also of trading in inter alia textile goods as sole proprietor of Ray long Trading Company. According to the petitioner, the said two concerns of which the petitioner is proprietor, are independent of each other and the accounts of the said two concerns are separately prepared and audited. The petitioner filed his IT returns for the asst. yr. 1994 -95, that is, the asst. yr. 1994 -95, that is, the accounting year ending on 31st March, 1994 on 30th June, 1995, declaring his total income as Rs. 11,82,400. According to the petitioner, the petitioner duly filed along with his IT returns, inter alia, balance sheets, P&L; a/c and tax audit reports for the two proprietorship concerns and certificate of chartered accountant under Section 80HHC of the IT Act, 1961 certifying the deductions under the said section, on account of exports profits was allowable. On 1st March, 1996, intimation under Section 143(1)(a) of the IT Act was issued by the respondent No. 1 determining a sum of Rs. 95,311 as refundable to the petitioner. Thereafter notice under Section 143(2) was issued for assessment under Section 143(3) of the IT Act. By an order of assessment dt. 29th March, 1996, the total income of the petitioner for the assessment year 1994 -95 was assessed at Rs. 17,60,550. According to the petitioner, many of the expenses claimed by the petitioner had been disallowed. The respondent No. 1, however, allowed deductions of a sum of Rs. 26,35,82,267, being export profits, under Section 80HHC of the said Act. According to the petitioner, on or about 29th March, 2001 the petitioner received the notice dt. 20th March, 2001 under Section 148 of the said Act in respect of the asst. yr. 1994 -95, which is under challenge in this writ petition, mainly on the ground that the action against the petitioner is barred by limitation. Reference has, in this context, been made to the proviso to Section 147 of the IT Act which is extracted hereinbelow: 147. If the AO has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereinafter in this section and in Sections 148 to 153 referred to as the relevant assessment year):Provided that where an assessment under Sub -section (3) of Section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under Section 139 or in response to a notice issued under Sub -section (1) of Section 142 or Section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year.
(3.) ON behalf of the Revenue, however, it was argued that the notice was within limitation inasmuch as the amount of income chargeable to tax that had escaped assessment amounted to over Rs. 1 lakh.;