M/S.D.R.PATTNAIK V. CHIEF COMMISSIONER OF INCOME TAX ODISHA

WP(C)/17604/2015

AI Insights

This case involves a batch of writ petitions challenging notices issued under section 148 of the Income Tax Act, which were based on the Justice Shah Commission's report on mines. The petitioners argued that the notices lacked independent material for initiation, relying solely on the Commission's report. The Income Tax Department contended that the report was a result of their prior inquiries. The court decided not to interfere at this stage, referencing the Supreme Court's decision in G.K.N. Driveshafts(India) Ltd. vs. Income Tax Officer, which outlined the procedure following the issuance of such notices.

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 766394 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 09-11-2015
• Assessment Year: misc
• Other Referred Cases: G.K.N. Driveshafts(India) Ltd. Vs. Income Tax Officer and ors.
• Laws Referred To: Income Tax Act
• Result in Favour of: Respondent
• Court: HIGH COURT
• Department Lawyers: S K ACHARYA
• Assessee Lawyers: D PATI
• Keywords: Income Tax; Section 148; Writ jurisdiction; Justice Shah Commission Report
• Section: 148

Judgement Text

" W.P.(C) No.17604 of 2015 W.P.(C) Nos.17604,17593, 17594, 17595, 17599, 17601, 17605 and 17607 of 2015 09.11.2015 Heard Mr. D. Pati, learned counsel appearing for all the writ petitioners and Mr. S.K. Acharya, learned Senior Standing Counsel for the Income Tax Department. Challenge in these batch of writ applications have been made to various notices issue d under section 148 of the Income Tax Act to the petitioners for different assessment years, p urportedly placing reliance on the observations made by the Honble Mr. Justice M. B. Shah Com missions report on Mines. Mr. D.Pati, learned counsel for the petitioners of the fact that bereft of the report of the Justice Shah Commission, there is no other material available with the Department to in itiate proceeding under section 148 of the Income Tax Act against the petitioners. He further submits that there are subsequent judgments of the Honble Apex Court regarding the status of t he Justice Shah Commission Report and he prays that the Department be prevented from proceedin g any further in these matters. Mr. Acharya, learned Senior Standing Counsel for the Income Tax Department on the othe r hand submits that the report of the Justice Shah Commission is the source of information obt ained on the basis of enquiry conducted by the Department prior to issuing notice to the petit ioners and he further submits that in any event at the stage of show cause notice, nothing prevents the petitioners from raising all such contentions in response to notices issued and they shall be obviously provid ed opportunity of hearing in course of such proceeding. Having heard learned counsel for the both the sides and considering the facts that m erely notice under section 148 of the Income Tax Act has been issued, we are of the considered view that this is not the stage where this Court should exercise its writ jurisdiction over t he matter especially since the petitioner is at liberty to raise all such contentions on fact as well as on law in course of such proceeding. Nothing stated in this order shall prejudice e ither the interest of the petitioner or the Revenue. The Assessing Officer or the concerned a uthority is also directed to deal with the proceeding in accordance with law. Our conclusion is fortified by the judgment of the Honble Supreme Court in the Case of G.K.N. Driveshafts(India) Ltd. Vs. Income Tax Officer and ors. passed in Civil Appeal Nos.773 1 to 7737 of 2002 where the Honble Supreme Court has held as follows:- There is no justifiable reason to interfere with the order under challenge. When a notice unde r section 148 is issued, the proper course of action for the notice is to file return and if h e so desires, to seek reasons for issuing notices. The AO is bound to furnish reasons within a reasonable time. On receipt of reasons, the notice is entitled to file objections to issuance of notice and the AO is bound to dispose of the same by passing a speaking order. In the inst ant case, as the reasons have been disclosed in these proceedings, the AO has to dispose of th e objections, if filed, by passing a speaking order, before proceeding with the assessment. These writ petitions are accordingly dismissed. A free copy of this order be handed over to the learned Addl. Standing Counsel for the Revenue. Urgent certified copy of this order be granted on proper application. . I. Mahanty, J. Dr. D.P. Choudhury, J. 3 "