For the assessment year 1961-62, the petitioner filed a return of his income of the relevant previous year in consequence of a notice under section 22 (2) of the Income-tax Act, 1922. The return was filed on January 10, 1962. Subsequently, on February 6, 1962, the petitioner received a notice under section 23(2) from the Income-tax Officer calling upon him to produce accounts and documents and other evidence in support of his return. No assessments has yet been made in those assessment proceedings and they are still pending. That is not disputed. On December 31, 1963, the Income-tax Officer issued a notice under section 148 of the Income-tax Act, 1961, for the assessment year 1961-62. The petitioner pointed out that he had already filed his return of income and that assessment proceedings were pending, and he also produced the notice under section 23(2) served on him to show that the return had already been filed by him. The Income-tax Officer made an assessment under section 144 of the Income-tax Act, 1961, on March 28, 1966, and issued a notice of demand consequent thereto. The assessment order was made under section 144 on the ground that the petitioner had failed to comply with the notice under section 148. A notice was also issued to the petitioner to show cause why a penalty should not be imposed for non-compliance with the notice under section 148. The petitioner applies for certiorari.
Now the original assessment proceedings upon the return filed by the petitioner in consequence of the notice under section 22 (2) are pending before the Income-tax Officer. They were pending when the notice under section 148 was issued. In the circumstances, on the date when the notice was issued it cannot be said that any income had escaped assessment. On that date, no assessment order had been made and it cannot also be said that no assessment order was possible because the period of limitation for making it had expired. There can be little dispute that in the circumstances the Income-tax Officer did not enjoy the jurisdiction entitling him to issue a notice under section 148. That being so, the entire proceedings taken by the Income-tax Officer pursuant to that notice and culminating in the impugned assessment order and the notice of demand are without jurisdiction. The notice under section 148 being without jurisdiction, there is no case for the imposition of a penalty for the failure to comply with such notice. The petitioner is, therefore, entitled to succeed.
It was pointed out on behalf of the respondent that an alternative remedy was available to the petitioner by way of appeal against the assessment order. In my opinion, when the petitioner drew the attention of the Income-tax Officer to the pendency of the original assessment proceeding and in fact produced the notice under section 23(2) in support of the fact that he had filed a return, it was not open to the Income-tax Officer to persist in the proceedings pursuant to the notice under section 148 and to make the impugned assessment order, and there is nothing in the assessment order which indicates that the Income-tax Officer made any attempt to verify whether the original assessment proceeding was still pending. Indeed, the Income-tax Officer has not stated anywhere in the assessment order why he came to the conclusion that income had escaped assessment. The objection of the respondent is, therefore, rejected.
The petition is allowed. The assessment order dated March 28, 1966, and the consequent notice of demand for the assessment year 1961-62 and the proceedings for imposition of a penalty commencing with the notice in that behalf are quashed. The petitioner is entitled to his costs.