HIGH COURT OF
Fisher Xomox Sanmar Ltd
v.
Assistant Commissioner
of Income-tax
P.D. Dinakaran and Mrs.
Chitra Venkataraman, JJ
W.P. No. 16331 of 2003
February 28, 2007
Section
148 and section 149 of the Income-tax Act, 1961 read with article 226 of the
constitution of India - Income escaping assessment - Issue of notice for -
Assessment year 1993-94 - Assessee after sanction of scheme of amalgamation
filed its return and its assessment under section 143(3) was completed by an
order dated 8-2-1996 - Later a notice under section 148 was issued against
assessee on 31-5-2001 stating that income had escaped assessment on basis of
transfer of excess assets, etc., as a result of amalgamation of assessee -
Assessee objected reassessment on ground that since notice under section 148
was issued beyond period of seven years after close of relevant assessment
year, same was barred by limitation - Assessee’s objection was rejected and
reassessment order was passed demanding balance tax payable with interest -
Whether since reassessment notice was issued prior to 1-6-2001 when section 149
was amended; unamended provision was
applicable and, therefore, issuance of
notice for reassessment was well within time as per section 149(1)(a)(iii)
- Held, yes - Whether when assessee had concededly not furnished relevant
material as to exchange share value and same was a disputed question of fact,
no relief could be provided to assessee indicial review exercising power
conferred under article 226 of constitution of India - Held, yes
FACTS
The
assessee-company after sanction of amalgamation scheme filed its return for the
relevant assessment year which was completed under section 143(3) on 8-2-1996.
A notice under section 148 for reassessment was issued against assessee on
31-5-2001 alleging that income had escaped assessment on the basis of transfer
of excess assets, etc., as a result of amalgamation. The assessee objected the
reassessment on the ground that since the notice under section 148 was issued
beyond period of seven years after close of the relevant assessment year, it
was barred by limitation and, thus, very initiation of reassessment proceedings
was without jurisdiction. The assessee’s objection was not accepted and the
order of reassessment was passed demanding balance tax payable with interest
for the relevant assessment year.
On writ:
HELD
Concededly,
the impugned proceedings related to the assessment year 1993-94 and the
assessee had submitted its return on 31-12-1993, and the assessment under
section 143(3) was completed on 8-2-1996, after furnishing of the scheme of
amalgamation approved by the High Court on 28-4-1993, but, the assessee, till
date the High Court could not satisfy the Court that had furnished the exchange
shares value along with the return for the relevant it assessment year. On the other hand, it was not in dispute that
the scheme of amalgamation approved by the High Court on 28-4-1993, did not
contain the material details as to the exchange share value pursuant to the
amalgamation. [
Moreover,
the reassessment notice was issued on 31-5-2001, but section 149 was amended
only with effect from 1-6-2001, and, therefore, the pre-amended provision of
section 149 was applicable and in that case, the issuance of notice for
reassessment under section 148 was well within the time as per sub-clause (iii)
of section 149(1)(a). Hence, the contention that the impugned
reassessment was barred by limitation and suffered for want of jurisdiction
failed. [
When the
assessee had concededly not furnished the relevant materials as to the exchange
share value, the same was a disputed question of fact, which could not be gone
into in judicial review exercising the power conferred under article 226 of the
Constitution of India. On the other hand, against the order dated 2-6-2003, a
statutory appeal laid to the Commissioner (Appeals). [
The remedy
under article 226 by way of judicial review is purely a discretion and where
the petitioner fails to avail of the effective statutory alternative remedy within
the prescribed time due to his own fault, he cannot be permitted to urge that
as a ground to exercise the discretion conferred under article 226 of the
Constitution of India in his favour. [
In the
instant case, it was not a mere exercise of discretion conferred under article
226 of the Constitution of India, but it was matter which revolved on the
disputed question of fact relating to the exchange share value pursuant to the
scheme of amalgamation relied on by the assessee. In which case, the refusal to
exercise the discretion could not be complained as grossly erroneous. [
In the
instant case, concededly, the very reassessment was initiated for the escaped
assessment as the assessee had not furnished the exchange share value pursuant
to the amalgamation along with its return even though it had enclosed the
scheme of amalgamation approved by the Court by order dated 28-4-1983. What was
the exchange share value was a material fact, which went to the root of the
issue and it was factually disputed, which, could not be gone into under
article 226 of the Constitution of India. Hence, the assessee was not entitled
for the relief as prayed for in the writ petition. [