ASHIM KUMAR BANERJEE,J. - (1.) NOTICE under Section 148 of the Income -tax Act, 1961, (hereinafter referred to as the 'said Act of 1961'), to the respondent/writ petitioner was called in question in the writ petition filed by them. According to the writ petitioner before issuing such notice the Revenue was obliged to satisfy themselves that there had been sufficient ground to reopen the assessment under Section 147 to the extent that there had been an escapement of income from the assessment done in regular process under Section 143. Since there was no reason to issue such notice, notice was bad in law.
(2.) THE Revenue filed an affidavit -in -opposition disclosing reason for reopening the assessment. The recording of reasons before issuing of notice under Section 148 was annexed to the affidavit -in -opposition. The writ petition thus took a different shape as at the time of hearing the respondent/assessee took the plea that the reason so disclosed by the Revenue were not sufficient to reopen the assessment. The learned single judge after considering the rival contentions allowed the writ petition by holding that the very basis of forming the opinion was not sustainable in law and, hence, the notice issued under Section 148 was liable to be quashed. His Lordship relied on another single Bench decision of this Court reported in Smt. Tarawati Debi Agarwal v. ITO , and allowed the writ petition. Hence, this appeal by the Revenue. Mr. Nizamuddin, learned Counsel appearing in support of the appeal contended that mere insufficiency of reason could not be a ground for quashing of the notice issued under Section 148 at its threshold. As and by way of alternative submission Mr. Nizamuddin contended that assuming that the authority was not entitled to reopen the assessment on the basis of a valuation report submitted by the Valuation Officer as held by the learned single judge in Smt. Tarawati Debi Agarwal v. ITO , the learned single judge erred in allowing the writ petition overlooking the fact that apart from the valuation report there had been other causes disclosed in the said record of reasons, hence, the ratio decided in Smt. Tarawati Debi Agarwal v. ITO was misapplied by his Lordship.
(3.) MR . Nizamuddin, learned Counsel in support of his contention relied on the following decisions: (i) Raymond Woollen Mills Ltd. v. ITO ; (ii) GKN Driveshafts (India) Ltd. v. ITO [2003] 259 ITR 19; (iii) Amarlal Kishandas v. CIT ; and (iv) ITO v. Shree Bajrang Commercial Co. P. Ltd. .;