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Jamuna Prasad Munni Lal and anr. Vs. Inspecting Assistant Commissioner of Income-tax (Central) and anr. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberWrit Petition No. 299 of 1984
Judge
Reported in(1984)42CTR(All)110; [1985]153ITR382(All); [1984]19TAXMAN107(All)
ActsIncome Tax Act, 1961 - Sections 147 and 186(1)
AppellantJamuna Prasad Munni Lal and anr.
Respondentinspecting Assistant Commissioner of Income-tax (Central) and anr.
Appellant AdvocateR.R. Misra, Adv.
Respondent AdvocateBhartiji Agarwal and ;M. Katju, Advs.
Excerpt:
.....play. it is well known that in the old section 34 and in the new section 147 which underwent various amendments, the important and crucial expression used has been 'the income-tax officer has reason to believe';thereafter, the other requirement is 'by reason of the omission or failure on the part of an assessee to make a return. we would not like to say anything about the material upon which the department has placed reliance for proceeding under section 186(1) of the act and, further, we would not like to say anything as to whether there was or there was no genuine firm in existence in the relevant period......upon to show cause why the said order dated september 25, 1982, granting registration to the assessee-firm be not cancelled under the provisions of section 186(1) of the act. march 2, 1984, was fixed directing the assessee-firm to file its reply. the petitioners have come up in the instant petition questioning the validity of the said notice.2. dr. misra has contended that all the necessary facts were in possession of the department when registration was granted to the assessee-firm on september 25, 1982, and in the instant case, the department is merely seeking to cancel the registration on change of opinion which it is not entitled to do under section 186(1). he has placed reliance on a number of authorities under section 147 of the act. we should like to observe that the entire.....
Judgment:

Mehrotra, J.

1. We have heard Dr. Misra in support of this petition. The brief facts are these : petitioner No. 1 claims to be a registered partnership firm and it is stated that for the assessment year 1975-76, registration was granted by the income-tax Department under Section 185 of the I.T. Act. A true copy of the said order dated September 25, 1982, is annex. 1 to the writ petition. The Income-tax Department issued a notice dated February 21, 1984, under Section 186(1) of the said Act. By the said notice, the Department expressed its opinion that during the said assessment year and during the subsequent assessment years which followed, viz., the years1976-77 and 1977-78, there was no genuine firm in existence and the registration to the firm was erroneously granted for the assessment year 1975-76, and so the petitioner No. 1, the assessee, was called upon to show cause why the said order dated September 25, 1982, granting registration to the assessee-firm be not cancelled under the provisions of Section 186(1) of the Act. March 2, 1984, was fixed directing the assessee-firm to file its reply. The petitioners have come up in the instant petition questioning the validity of the said notice.

2. Dr. Misra has contended that all the necessary facts were in possession of the Department when registration was granted to the assessee-firm on September 25, 1982, and in the instant case, the Department is merely seeking to cancel the registration on change of opinion which it is not entitled to do under Section 186(1). He has placed reliance on a number of authorities under Section 147 of the Act. We should like to observe that the entire scheme of Section 147 which corresponds to the old Section 34 of the Indian I.T. Act, 1922, is different from the provision which is applicable to the instant case, viz., Section 186(1). Section 147 which corresponds to the old Section 34 has been considered as a jurisdictional provision and certain prerequisites have to be satisfied before the said provision comes into play. It is well known that in the old Section 34 and in the new Section 147 which underwent various amendments, the important and crucial expression used has been 'The Income-tax Officer has reason to believe'; thereafter, the other requirement is 'by reason of the omission or failure on the part of an assessee to make a return......or to disclose fully and truly all material facts' (vide Clause (a) ofsection 147). Under Clause (b), the expression is, '......the Income-tax Officerhas, in consequence of information in his possession, reason to believe......'

3. The entire case law under the said provision was rendered in reference to the said prerequisites. It is not necessary to notice all the cases which are relevant. However, a reference should be made to the Supreme Court pronouncement in Narayanappa v. CIT : [1967]63ITR219(SC) and to the pronouncement of the Supreme Court in Calcutta Discount Company Ltd. v. ITO : [1961]41ITR191(SC) . These prerequisites are completely absent in Section 186(1) wherein the simple expression is 'If the Income-tax Officer is of the opinion'. In our view, in these circumstances, it is clear that the approach underlying the interpretation of the old Section 34 or the new Section 147 will not be apposite for interpreting Section 186(1) of the Act. We would not like to say anything about the material upon which the Department has placed reliance for proceeding under Section 186(1) of the Act and, further, we would not like to say anything as to whether there was or there was no genuine firm in existence in the relevant period. Obviously this is not our province in the extraordinary writ petition under Article 226 to pass an ordercreating complications for the assessee arid for the Department. However, we feel that this is not a fit case where it can be said that the Department lacks jurisdiction to take proceedings under Section 186(1). In this view of the matter, this petition is dismissed in limine.

4. Learned counsel for the petitioner prayed for a certificate of fitness under Article 133 of the Constitution of India. In our opinion, this case does not raise any such substantial questions of law of general importance which may need adjudication by the Supreme Court.


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