- (1.) BRIEFLY, the facts of the present case are that a notice under Section 148 of the Income-tax Act, 1961 (hereinafter referred to as "the 1961 Act"), was issued and despatched on February 24, 1970, relating to the assessment year 1961-62 to the petitioner by the Income-tax Officer, Sangrur. No return was filed by the petitioner in response to the notice. The Income-tax Officer, therefore, issued another, notice on October 10, 1973, under Section 142 (1) of the aforesaid Act in which he was intimated to appear on November 23, 1973. The counsel for the petitioner appeared on November 24, 1973, and got the case adjourned to December 10, 1973, for filing a reply. The petitioner filed a reply dated December 9, 1973, supported by an affidavit stating therein that the alleged notice under Section 148 was not served upon him. He further stated that no proceedings were competent against him under Section 148 of the 1961 Act, as notice was not served upon him within eight years. The petitioner was required by the Income-tax Officer, respondent No. 2, to appear before him on March 18, 1974, when he was ordered to accept notice under Section 148. Counsel for the petitioner refused to acknowledge the receipt of the notice. The petitioner also submitted his written reply regarding the aforesaid matter. On May 13, 1974, he has been served with a final order dated March 21, 1974, passed under Section 144 of the 1961 Act, whereby the income of the petitioner has been assessed at Rs. 48,400. He had also been served with notice dated March 19, 1974, under Section 271 to show cause as to why an order imposing a penalty be not passed against him. The petitioner challenged the order passed under Section 144 of the Act and the notice dated March 19, 1974. At the time of motion hearing, the motion Bench admitted the petition to a Division Bench on the point of interpretation of the word "issue" occurring in Section 148 of the 1961 Act.
(2.) IN order to decide the question, it is necessary to notice some of the sections of the 1961 Act. Section 147 empowers the Income-tax Officer, who has reason to believe. that, by reason of the omission or failure on the part of an assessee to make a return under Section 139 for any assessment year to the Income-tax Officer or 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 or inconsequence of information in his possession reason to believe that income chargeable to tax has escaped assessment for any assessment year, subject to the provisions of sections 148 to 153, to assess or reassess such income or recompute the loss or the depreciation allowance, as the case may be, for the assessment year concerned. Section 148 relates to issue of notice where income has escaped assessment, Section 149 to time-limit for notice and Section 151 to sanction for issue of notice. The aforesaid sections are as follows : "148. (1) Before making the assessment, reassessment or recomputation under Section 147, the Income-tax Officer shall serve on the assessee a notice containing all or any of the requirements which may be included in a notice under Sub-section (2) of Section 139 ; and the provisions of this Act shall, so far as may be, apply accordingly, as if the notice were a notice issued under that sub-section. (2) The Income-tax Officer shall, before issuing any notice under this section, record his reasons for doing so. " "149. (1) No notice under Section 148 shall be issued,-- (a) in cases falling under Clause (a) of Section 147 (i) for the relevant assessment year, if eight years have elapsed from the end of that year, unless the case falls under Sub-clause (ii); (ii) for the relevant assessment year, where eight years, but not more than sixteen years, have elapsed from the end of that year, unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to rupees fifty thousand or more for that year; (b) in cases falling under Clause (b) of Section 147, at any time after the expiry of four years from the end of the relevant assessment year. (2) The provisions of Sub-section (1) as to the issue of notice shall be subject to the provisions of Section 151. (3) If the person on whom a notice under Section 148 is to be served is a person treated as the agent of a non-resident under Section 163 and the assessment, reassessment or recomputation to be made in pursuance of the notice is to be made on him as the agent of such non-resident, the notice shall not be issued after the expiry of a period of two years from the end of the relevant assessment year. " "151. (1) No notice shall be issued under Section 148 after the expiry of eight years from the end of the relevant assessment year, unless the Board is satisfied on the reasons recorded by the Income-tax Officer that it is a fit case for the issue of such notice. (2) No notice shall be issued under Section 148 after the expiry of four years from the end of the relevant assessment year, unless the Commissioner is satisfied on the reasons recorded by the Income-tax Officer that it is a fit case for the issue of such notice. "
(3.) BEFORE taking action under Section 147, the Income-tax Officer is required to follow the procedure under the subsequent sections. Under Section 148, he is to serve on the assessee a notice before making the assessment, reassessment or recomputation. Section 149 prescribes the period in which the notice under Section 148 can be issued. The question for determination is: whether the words "issue of notice" used in Section 148 will include service thereof or not. It is contended by the learned counsel for the petitioner that the two words, namely, "serve" and "issue", used in sections 148 and 149 are interchangeable words and the word "issue" in a larger sense also will include "service". He has further argued that the Supreme Court interpreted the word "issue" in Banarsi Debi v. Income-tax Officer, [1964] 53 ITR 100 (SC), wherein the same interpretation was taken. On the other hand, the learned counsel for the respondents has argued that the two words have been used in the two sections in different contexts and the word "issue" will mean only "send".;