Law:

Section:

Section 149, read with section 148, of the Income-tax Act, 1961 - Income escaping assessment - Time limit for issuance of notice - Assessment year 1995-96 - Assessee filed his return for relevant assessment year wherein he claimed a deduction of Rs. 87,746 - Subsequently on 14-3-2002, Assessing Officer issued notice under section 148 on ground that amount claimed as deduction was not allowable, hence, said amount escaped assessment - Assessee challenged validity of said notice alleging that as income escaping assessment did not exceed Rs. 1 lakh, notice was barred by limitation - Whether failure of Assessing Officer to refer to any other items of escaped income or to bring any material on record in support of his satisfaction, statement recorded by him in impugned notice that escaped income was likely to exceed Rs. 1 lakh was only with a view to over-come hurdle of limitation - Held, yes - Whether, therefore, impugned notice being barred by limitation was to be quashed - Held, yes FACTS The petitioner assessee, a Development Officer of LIC, filed his return for the assessment year 1995-96 wherein income by way of incentive bonus received from LIC of India was shown at Rs. 2,19,366 against which he claimed a deduction of Rs. 87,746 i.e., at the rate of 40 per cent; said return was duly processed by the Assessing Officer. Thereafter a notice was received on 14-3-2002 by the petitioner under section 148 for the assessment year 1995-96 wherein the Assessing Officer required him to file his return of income for the said year alleging that income for that year had escaped assessment within the meaning of section 147. The petitioner challenged the validity of said notice on ground that under section 148, no notice could be issued for escapement of income of Rs. 87,746 as period prescribed for issue of such notice under section 149 had lapsed. The petitioner further alleged that said notice was issued with an ulterior motive as the Assessing Officer was demanding a certain amount from the assessee and it was on account of his failure to meet the demand of the Assessing Officer that the impugned notice had been issued. On writ petition : HELD From a perusal of the…

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