DISTRIBUTORS INDIA THRU. PARTNER V. UNION OF INDIA THRU. SECY. FINANCE MINISTRY OF FINANCE DEPTT. OF REVENUE AND OTHERS

/41/2022

AI Insights

The case revolves around a writ petition filed by Distributors India (South) challenging a notice issued by the Income Tax Officer under Section 148 of the Income Tax Act, 1961, for reassessing the income for the assessment year 2013-14. The petitioner argued that the reassessment was based on audit objections and did not involve any new tangible material, thus constituting a mere change of opinion. However, the respondents contended that the reassessment was based on specific, reliable, and relevant information that emerged after the original assessment, justifying the reopening under Section 147 of the Act. The court examined the legal provisions and precedents, ultimately rejecting the petitioner's objections and affirming the validity of the reassessment notice.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 769427 (HC-LUCKNOW)
• Appeal Type: Others
• Pronouncement Date: 18-04-2022
• Assessment Year: misc
• Other Referred Cases: Raymond Woolen Mills Ltd. Versus I.T.O., CIT versus Rajan, Aventis Pharma Ltd. Versus ACIT, Arun Gupta versus Union of India, Phool Chand Bajrang Lal v. ITO, Srikrishna (P) Ltd. v. ITO, Techspan India (P) Ltd. v. CIT, United Electrical Co. Ltd. Versus Commissioner of Income Tax
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: MANISH MISRA
• Assessee Lawyers: SHAILESH VERMA
• Keywords: Audit objection; C&F Agents; Income Tax; Reassessment; TDS
• Section: 147; 148; 194(C); 194-J; 194-H

Judgement Text

"1 A.F.R. Judgment reserved on 23.03.2022 Judgment delivered on 18-04-2022 Case : WRIT TAX No. - 41 of 2022 Petitioner : Distributors India (South) Respondent : Union of India And Others Counsel for Petitioner : Shailesh Verma Counsel for Respondent : Manish Misra, Hon'ble Devendra Kumar Upadhyaya, J. Hon'ble Subhash Vidyarthi, J. (Per Hon’ble Subhash Vidyarthi J.) 1. Heard Shri Desh Deepak Chopra, Senior Advocate assisted by Sri. Shailesh Verma, Advocate, the learned counsel for the petitioner and Shri Manish Misra, Advocate, the learned counsel for the respondents. 2. By means of this writ petition filed under Article 226 of the Constitution of India, the petitioner has challenged the validity of a notice dated 26.03.2021 issued by the Income Tax Officer, Range-5, Ayakar Bhawan, 5, Ashok Marg, Lucknow under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') proposing to assess/reassess the income/loss for the assessment year 2013-14. 3. The petitioner’s case is that it is a registered partnership firm. It has entered into agreements with various Pharmaceutical and FMCG (Fast Moving Consumer Goods) Companies for providing Carrying and Forwarding Agents (C&F Agents) services. As per the terms of the agreements, the petitioner incurs various business expenses on behalf of the principal companies and while reimbursing the expenses, the principal companies deduct TDS. However, the reimbursement of expenses is not the petitioner’s income and, therefore, it is not reflected in the petitioner’s books of accounts as receipts from C&F business. Some of the companies have deducted TDS under different heads like Section 194 H of the Act that is meant 2 for income from brokerage and commission and Section 194 J that is meant for fee for professional and technical services. 4. During the assessment year 2013-14 the petitioner had shown the total receipts of Rs.3,59,59,861/- in its Profit and Loss (P&L) Account, which comprised of commission income of Rs.3,47,58,295/- and interest income of Rs.12,01,566/-. The amount of TDS as per the statement in Form 26 AS was Rs.32,14,869/-. The petitioner filed its return for a total income of Rs.9,77,090/-. 5. During scrutiny, the Assessing Officer raised a query regarding high ratio of refund to TDS and the petitioner was asked to reconcile 26 AS with gross receipts as per P&L Account. 6. On 12-02-2015, the petitioner submitted a reply stating that it is making several expenses on behalf of the Principal Companies. The agreements are in the nature of a contract and hence TDS should be deducted @ 2% under Section 194 C of the Act. However, the nomenclature used for payments made to the petitioner is commission and, therefore, the Companies are deducting TDS @ 10% under Section 194 H. After taking into account all the expenses, the petitioner’s net margins are such that the tax accrued is much less than the TDS and hence a heavy refund results. Every year the petitioner gets a certificate for lower deduction of TDS, but for the relevant year they got it very late and this was the reason for high ratio of refund to TDS. Again, on 27-02-2015, the petitioner sent another letter reiterating its earlier reply. 7. On 25-03-2015, the A.O. passed an Assessment Order assessing the petitioner’s total income at Rs.11,42,428/-, after adding Rs.1,65,338/- to the returned income of Rs.9,77,090/- towards part of expenses disallowed. 8. On 26-03-2021, the A.O. issued a notice under Section 148 of the Act for the Assessment Year 2013-14, stating that he had reason to believe that the petitioner’s income chargeable to tax has escaped assessment within the meaning of Section 147 of the Act. On 3 22.12.2021, the National Faceless Assessment Centre provided the reasons for re-opening of assessment. It states that on examination of documents on record and 26 AS, it is noticed that the assessee has received payments under Section 194 J also, but he has not shown the said receipts and has not given any explanation for the same. The assessee has not disclosed the amount of reimbursement of expenses claimed by it and the actual amount received by it towards reimbursement. It has not submitted the details of expenses incurred by it for verification during the assessment proceedings. It did not produce any ledger, bills and vouchers of expenses incurred on behalf of the Principal Companies. As per 26 AS, the assesse has received a total sum of Rs.4,66,84,247/- and TDS is Rs.32,14,869/-, whereas it has shown its income at Rs.3,59,59,861/-. Thus the assesse has shown its income short by Rs.1,07,24,386/- and this income has escaped assessment. 9. The notice further states that although the assessee had produced the books of account, annual report, P&L account and balance sheet, but the requisite material facts mentioned above were embedded in such a manner that the material facts could not be discovered by the A.O. As all the material facts relevant for the assessment on the issues under consideration were not produced during the assessment proceedings, the AO did not examine the issues and, therefore, it is not a case of change of opinion. 10. The petitioner submitted its objections against the notice under Section 148 mainly on the grounds that in the letter dated 20-10-2020 written to the CIT (Audit), the A.O. had himself stated that the audit objection was not accepted, yet he initiated the action under Section 147 merely to safeguard the interest of Revenue. Secondly, the notice under Section 148 of the Act has been issued without bringing any fresh tangible material on record, on the basis of information which was already available on record, whereas the reassessment cannot be done for matters already discussed. The reasons recorded are based on a mere change of opinion, which is not permissible in law. The 4 approval under Section 151 of the Act has been given by the PCIT in a routine manner, without application of mind and without seeing the records and the correspondence made with the revenue authorities, which is not as per the law. 11. On 16-02-2022, the National Faceless Assessment Centre has passed an order rejecting the petitioner’s objections stating that there is no material to establish that the case has been re-opened on the basis of audit objections. Moreover, the A.O. has no authority to accept or reject the audit objection and the same has to be decided by the Principal Commissioner of Income Tax after taking into consideration the recommendations of the Joint Commissioner of Income Tax, as provided in the Standard Operating Procedure for handling audit cases contained in CBDT Instruction no. 7 of 2017. 12. Dealing with the assessee’s objection that no new material was there to justify reassessment, it has been stated that on examining the difference between 26 AS and the income admitted, it was revealed that although the assessee claimed that some receipts were towards reimbursements of expenses incurred on behalf of the Principal companies, but the assessee did not produce any material evidence or ledger or books to prove this and thus it did not make true and full disclosure of all the material facts necessary for assessment. 13. The order further states that the case has been reopened on the basis of question of fact regarding the difference between the total receipts and declared income and not on any question of law and, therefore, it is not a case of change of opinion. After applying his mind to the information available on record, the A.O. has formed an opinion that he had reason to believe that the income had escaped assessment and this was not based on mere suspicion, but was based on a belief formed after examination of the material available on record. 14. The respondents have brought on record a copy of the approval under Section 151 of the Act, which indicates that the Assessing 5 Officer had made a proposal for issuance of a notice under Section 148 of the Act, annexing therewith the detailed reasons for the proposal, the Range Head recommended the proposal and the PCIT expressed his agreement with the comments of the AO and recommendation of the Range Head and granted his approval for issuance of a notice under Section 148 of the Act. 15. Before proceeding to examine the rival contentions advanced on behalf the parties, it would be appropriate to have a look at the relevant provisions of the Act and refer to some pronouncements of the Hon’ble Supreme Court explaining the scope of interference under Article 226 of the Constitution of India while examining the validity of a notice issued under Section 148 of the Income Tax Act. 16. The relevant provisions of Sections 147 and 148 of the Act, as those stood at the relevant time, are being reproduced below: - “147. Income escaping assessment.— If the Assessing Officer, has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in Sections 148 to 153 referred to as the relevant assessment year): ………… Explanation 1.—Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso.” “148. Issue of notice where income has escaped assessment.— (1) Before making the assessment, reassessment or recomputation under Section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and 6 the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under Section 139: Provided that …………….. (2) The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so.” (Emphasis supplied) 17. Thus after giving a notice under Section 148 of the Act giving reasons for doing so, the Assessing Officer can pass an order for reassessment if he has reason to believe that any income chargeable to tax has escaped assessment for any assessment year. The Hon’ble Supreme Court has explained the scope of judicial review while examining the validity of a notice under Section 148 of the Act in Raymond Woolen Mills Ltd. Versus I.T.O., (1999) 236 ITR 36 (SC), in which it has been held that at the stage of the notice of reopening of the assessment, the Court has only to see whether there is prima facie some material on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage. 18. Again, in Raymond Woollen Mills Ltd. v. ITO, (2008) 14 SCC 218, the Hon’ble Supreme Court reiterated that while examining the validity of a notice issued under Section 148 of the Income Tax Act, “we do not have to give a final decision as to whether there is suppression of material facts by the assessee or not. We have to see only whether there was prima facie some material on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage.” 19. We proceed to examine the rival submissions advanced on behalf of the parties in light of the aforesaid pronouncements of the Hon’ble Supreme Court so as to ascertain as to whether there was prima facie some material on the basis of which the Department could 7 reopen the case, without going into the sufficiency or correctness of the material. 20. Mr. Desh Deepak Chopra, the learned Senior Advocate representing the petitioner, has submitted that in the present case the reassessment proceedings have been initiated merely on the basis of an audit objection raised by the revenue auditor and there was no tangible material with the A.O. suggesting that the income of the petitioner has escaped assessment. In the letter dated 07-02-2020 addressed to the CIT (Audit), the A.O. had himself refused to accept the audit para. Relying upon a decision of the Bombay High Court in CIT versus Rajan, 403 ITR 30, he has submitted that if the A.O. has rejected the audit objection, subsequent re-opening on the same ground of audit objection will not be valid, unless the A.O. shows that there was separate application of mind, which is not found in the present case. 21. Per contra, Sri. Manish Mishra, the learned Counsel for the Income Tax department, has submitted that as per the circular dated 21-07-2017 issued by the CBDT, the authority to accept or reject the Revenue audit objection vests in the Commissioner of Income Tax and the A.O. had no power to reject the audit objection. Therefore, the letter dated 07-02-2020 written by the A.O. to the CIT (Audit) Revenue stating that the audit objection was not acceptable to him, was not of any consequence. 22. It is settled law that the validity of any order has to be adjudged on the basis of the reasons mentioned in the order itself and additional reasons, which are not mentioned in the order itself, cannot be supplied afterwards either to support the order or to challenge it. Since the reasons for issuing the notice under Section 148 stated by the A.O. and approved by the approving authority do not make any mention of the audit para, the petitioner cannot assail the validity of the order for issuance of the notice under Section 148 of the Act on the said ground. 8 23. Moreover, the petitioner has itself annexed a copy of Instruction No. 07 of 2017 dated 21-07-2017 issued by the CBDT, laying down the Standard Operating Procedure for handling the audit objections and Clause 5.2 thereof provides that the PCIT shall, after calling for a report from AO and Range Head, if needed, take a decision as to whether or not the objection is acceptable. The A.O. had merely sent a report to the CIT (Audit) and he did not have the authority to take a decision regarding the audit objection. Therefore, the ground taken by the learned Counsel for the petitioner regarding the letter dated 07-02-2020 sent by the A.O. not accepting the audit objection, is without any force and the same cannot be accepted. 24. Sri. Chopra has next submitted that the proceedings under Section 147 have been initiated without bringing any fresh tangible material on record, by merely relying upon the documents that were already placed before the A.O. at the time of the original assessment proceedings. Relying upon another decision of the Bombay High Court in Aventis Pharma Ltd. Versus ACIT, (2010) 323 ITR 570 (Bom) he has submitted that it is a settled position of law that re- opening of assessment on the very same issue due to change of opinion in the absence of any fresh material is held to be invalid and bad in law. 25. Relying upon the judgment in Arun Gupta versus Union of India, (2015) 371 ITR 394 (All), the learned Counsel for the petitioner has submitted that even if new facts are discovered from the records already available before the A.O., it would amount to a change of opinion, since there is no fresh tangible material from which the authority to reopen the assessment has emerged. 26. The reasons recorded by the A.O. for initiating the process of re-assessment state that on examination of the documents on record and 26 AS, it was noticed that the petitioner has received payments under Section 194 J also, but it has not shown the said receipts in his P&L account and has not given any explanation for the same. The petitioner has not disclosed the amount of reimbursement of expenses 9 claimed by it and the actual amount received by it towards reimbursement. It has not submitted the details of expenses incurred by it for verification during the assessment proceedings. It did not produce any ledger, bills and vouchers of expenses incurred on behalf of the Principal Companies. As per 26 AS, the total receipts of the assesse under Sections 194 A, 194 C, 194 H and 194 J is Rs.4,66,84,247/- and TDS is Rs.32,14,869/-, whereas it has shown its income at Rs.3,59,59,861/-. Thus the petitioner has shown its income short by Rs.1,07,24,386/- and this income has escaped assessment. Although the assesse had produced the books of account, annual report, P&L account and balance sheet, but the requisite material facts mentioned above were embedded in such a manner that the material facts could not be discovered by the A.O. This material which came to light upon investigation conducted subsequent to passing of the assessment order, would certainly amount to a fresh tangible material giving rise to reason to believe that certain income has escaped assessment necessitating initiation of re-assessment proceedings. 27. From the reasons recorded by the A.O. for initiating the process of re-assessment, we find that the A.O. has recorded his reasons to believe that the petitioner had received payments under Section 194 J also, but it had not shown the said receipts in his P&L account and had not given any explanation for the same. The assesse had not disclosed the amount of reimbursement of expenses claimed by it and the actual amount received by it towards reimbursement. It had not submitted the details of expenses incurred by it for verification during the assessment proceedings. It did not produce any ledger, bills and vouchers of expenses incurred on behalf of the Principal Companies. Thus the petitioner did not make a “full and true” disclosure of all the material facts which resulted in an income of Rs. 1,07,24,386/- having escaped assessment. 28. In Phool Chand Bajrang Lal v. ITO, (1993) 4 SCC 77, the Hon’ble Supreme Court held that: - “25. From a combined review of the judgments of this Court, it follows that an Income Tax Officer acquires jurisdiction to reopen 10 assessment under Section 147(a) read with Section 148 of the Income Tax Act, 1961 only if on the basis of specific, reliable and relevant information coming to his possession subsequently, he has reasons which he must record, to believe that by reason of omission or failure on the part of the assessee to make a true and full disclosure of all material facts necessary for his assessment during the concluded assessment proceedings, any part of his income, profit or gains chargeable to income tax has escaped assessment. He may start reassessment proceedings either because some fresh facts come to light which were not previously disclosed or some information with regard to the facts previously disclosed comes into his possession which tends to expose the untruthfulness of those facts. In such situations, it is not a case of mere change of opinion or the drawing of a different inference from the same facts as were earlier available but acting on fresh information. Since, the belief is that of the Income Tax Officer, the sufficiency of reasons for forming the belief, is not for the Court to judge but it is open to an assessee to establish that there in fact existed no belief or that the belief was not at all a bona fide one or was based on vague, irrelevant and non-specific information. To that limited extent, the Court may look into the conclusion arrived at by the Income Tax Officer and examine whether there was any material available on the record from which the requisite belief could be formed by the Income Tax Officer and further whether that material had any rational connection or a live link for the formation of the requisite belief. It would be immaterial whether the Income Tax Officer at the time of making the original assessment could or, could not have found by further enquiry or investigation, whether the transaction was genuine or not, if on the basis of subsequent information, the Income Tax Officer arrives at a conclusion, after satisfying the twin conditions prescribed in Section 147(a) of the Act, that the assessee had not made a full and true disclosure of the material facts at the time of original assessment and therefore income chargeable to tax had escaped assessment.” 29. In Srikrishna (P) Ltd. v. ITO, (1996) 9 SCC 534, the Hon’ble Supreme Court held that: - “Now, what needs to be emphasised is that the obligation on the assessee to disclose the material facts — or what are called, primary facts — is not a mere disclosure but a disclosure which is full and true. A false disclosure is not a true disclosure. The disclosure must not only be true but must be full — “fully and truly”. A false assertion, or statement, of material fact, therefore, attracts the jurisdiction of the Income Tax Officer under Sections 34/147. Take this very case: the Income Tax Officer says that on the basis of investigations and enquiries made during the assessment 11 proceedings relating to the subsequent assessment year, he has come into possession of material, on the basis of which, he has reasons to believe that the assessee had put forward certain bogus and false unsecured hundi loans said to have been taken by him from non-existent persons or his dummies, as the case may be, and that on that account income chargeable to tax has escaped assessment. According to him, this was a false assertion to the knowledge of the assessee. The Income Tax Officer says that during the assessment relating to subsequent assessment year, similar loans (from some of these very persons) were found to be bogus. On that basis, he seeks to reopen the assessment. It is necessary to remember that we are at the stage of reopening only. The question is whether, in the above circumstances, the assessee can say, with any justification, that he had fully and truly disclosed the material facts necessary for his assessment for that year. Having created and recorded bogus entries of loans, with what face can the assessee say that he had truly and fully disclosed all material facts necessary for his assessment for that year? True it is that Income Tax Officer could have investigated the truth of the said assertion — which he actually did in the subsequent assessment year — but that does not relieve the assessee of his obligation, placed upon him by the statute, to disclose fully and truly all material facts. Indubitably, whether a loan, alleged to have been taken by the assessee, is true or false, is a material fact — and not an inference, factual or legal, to be drawn from given facts. In this case, it is shown to us that ten persons (who are alleged to have advanced loans to the assessee in a total sum of Rs 3,80,000 out of the total hundi loans of Rs 8,53,298) were established to be bogus persons or mere name- lenders in the assessment proceedings relating to the subsequent assessment year. Does it not furnish a reasonable ground for the Income Tax Officer to believe that on account of the failure — indeed not a mere failure but a positive design to mislead — of the assessee to disclose all material facts, fully and truly, necessary for his assessment for that year, income has escaped assessment? We are of the firm opinion that it does. It is necessary to reiterate that we are now at the stage of the validity of the notice under Sections 148/147. The enquiry at this stage is only to see whether there are reasonable grounds for the Income Tax Officer to believe and not whether the omission/failure and the escapement of income is established. It is necessary to keep this distinction in mind. A recent decision of this Court in Phool Chand Bajrang Lal v. ITO, we are gratified to note, adopts an identical view of law and we are in respectful agreement with it. The decision rightly emphasises the obligation of the assessee to disclose all material facts necessary for making his assessment fully and truly. A false disclosure, it is held, does not satisfy the said requirement. We are also in respectful agreement with the following holding in the said decision” (Emphasis supplied) 12 30. As material facts relevant for the assessment on the issues under consideration were not produced during the assessment proceedings, the A.O. could not examine the issues and could not form an opinion regarding the same during the original assessment proceedings. 31. The meaning of the expression “change of opinion” has been explained by the Hon’ble Supreme Court in CIT v. Techspan India (P) Ltd., (2018) 6 SCC 685, in the following words: - “16. To check whether it is a case of change of opinion or not one has to see its meaning in literal as well as legal terms. The words “change of opinion” imply formulation of opinion and then a change thereof. In terms of assessment proceedings, it means formulation of belief by an assessing officer resulting from what he thinks on a particular question. It is a result of understanding, experience and reflection. 17. It is well settled and held by this Court in a catena of judgments and it would be sufficient to refer to CIT v. Kelvinator of India Ltd. wherein this Court has held as under: (SCC p. 725, para 5-7) “5. … where the assessing officer has reason to believe that income has escaped assessment, confers jurisdiction to reopen the assessment. Therefore, post-1-4-1989, power to reopen is much wider. However, one needs to give a schematic interpretation to the words “reason to believe”…. Section 147 would give arbitrary powers to the assessing officer to reopen assessments on the basis of “mere change of opinion”, which cannot be per se reason to reopen. 6. We must also keep in mind the conceptual difference between power to review and power to reassess. The assessing officer has no power to review; he has the power to reassess. But reassessment has to be based on fulfilment of certain precondition and if the concept of “change of opinion” is removed, as contended on behalf of the Department, then, in the garb of reopening the assessment, review would take place. 7. One must treat the concept of “change of opinion” as an in-built test to check abuse of power by the assessing officer. Hence, after 1-4-1989, assessing officer has power to reopen, provided there is “tangible material” to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief.” 18. Before interfering with the proposed reopening of the assessment on the ground that the same is based only on a change in opinion, the court ought to verify whether the assessment earlier made has either expressly or by necessary implication expressed an opinion on a matter which is the basis of the alleged 13 escapement of income that was taxable. If the assessment order is non-speaking, cryptic or perfunctory in nature, it may be difficult to attribute to the assessing officer any opinion on the questions that are raised in the proposed reassessment proceedings. Every attempt to bring to tax, income that has escaped assessment, cannot be absorbed by judicial intervention on an assumed change of opinion even in cases where the order of assessment does not address itself to a given aspect sought to be examined in the reassessment proceedings.” (Emphasis supplied) 32. In the present case, at the time of making the assessment originally, the Assessing Officer had not formed any opinion regarding the reasons on which the notice under Section 148 of the Act has been issued. To say it more particularly, the A.O. had not formed any opinion regarding receipt of payments by the petitioner under Section 194 J, which had not been shown in its P&L account, non-disclosure of the amount of reimbursement of expenses claimed by it, non-submission of the details of expenses incurred by it for verification during the assessment proceedings and non-production of any ledgers, bills and vouchers of expenses incurred on behalf of the Principal Companies etc. Therefore, it is not a case of “change of opinion” and challenge to the notice under Section 148 of the Act on the ground that it seeks to initiate reassessment on the ground of change of opinion, cannot be accepted. 33. Relying upon a decision of Delhi High Court in United Electrical Co. Ltd. Versus Commissioner of Income Tax, (2002) 258 ITR 317, the learned Counsel for the petitioner has submitted that the Commissioner is required to apply his mind to the proposal put up before him for approval in the light of the material relied upon by the A.O., but in the present case the approval was casually given merely relying upon the reasons to believe as provided by the A.O., without going through the previous records. 34. Section 151 of the Act, which contains the provision for grant of approval to a proposal for issuance of a notice under Section 148 of the Act, is as follows: - 14 “151. Sanction for issue of notice.— (1) In a case where an assessment under sub-section (3) of Section 143 or Section 147 has been made for the relevant assessment year, no notice shall be issued under Section 148 by an Assessing Officer, who is below the rank of Assistant Commissioner or Deputy Commissioner, unless the Joint Commissioner is satisfied on the reasons recorded by such Assessing Officer that it is a fit case for the issue of such notice: Provided that, after the expiry of four years from the end of the relevant assessment year, no such notice shall be issued unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer aforesaid, that it is a fit case for the issue of such notice.” 35. The order dated 23-03-2021 passed by the approving authority under Section 151 of the Act has been placed on record by the Department and the detailed reasons recorded by the A.O. have been annexed to, and made a part of the order. The approving authority – the PCIT, has stated that he agrees with the comments of the A.O., which were annexed with the order, and has recorded his satisfaction that it was a fit case for issuance of the notice under Section 148 of the Act. The aforesaid order does not indicate non-application of mind by the PCIT to the proposal made by the A.O. and we are not able to accept the submission that the PCIT has granted approval without application of mind to the proposal put up by the A.O. 36. Keeping in view the scope of power of judicial review while scrutinizing a notice issued under Section 148 of the Act as explained in Raymond woolen Mills Ltd. (1) and (2) and Phool Chand Bajarang Lal and Srikrishna (Supra), we do not have to give a final decision as to whether there is suppression of material facts by the assessee or not as the sufficiency or correctness of the material cannot a thing to be considered at this stage. In the instant case, the notice under Section 148 of the Act has been issued by the assessing officer after conducting an investigation and going through the income tax return and other related documents of the petitioner and after forming reason to believe that the petitioner did not truly and fully disclose all the material facts, because of which income amounting to Rs. 1,07,24,386/- has escaped assessment. We are satisfied that there was 15 prima facie material available on record before the assessing officer for issuing a notice for reassessment and the notice under Section 148. The order dated 23-03-2022 passed by the National Faceless Assessment Centre rejecting the petitioner’s objections against issuance of the notice, does not suffer from any such illegality as to warrant interference by this Court in exercise of its Writ Jurisdiction, 37. The Writ Petition lacks merits and is, accordingly, dismissed. 38. No order as to costs. Order Date : 18-04-2022 Jaswant Digitally signed by JASWANT KUMAR Date: 2022.04.19 18:54:18 IST Reason: Location: High Court of Judicature at Allahabad, Lucknow Bench "