Law:

Section:

Section 148, read with section 139, of the Income-tax Act, 1961 - Income-escaping assessment - Issue of notice for - Assessment years 1967-68 to 1969-70 - Whether when a return is filed by assessee, it cannot be ignored by ITO and he will have no jurisdiction to issue a notice under section 148 without completing assessment on return filed by assessee - Held, yes - Whether even though a return is invalid in sense that it is not correct and complete within meaning of section 139, ITO cannot ignore or disregard same for purpose of issuing a notice under section 148, unless return can be regarded as not a return in eye of law - Held, yes - Whether in view of aforesaid, where assessee filed a return without showing particulars of profits and gains from business, ITO had no jurisdiction to issue notice under section 148 without completing assessment on said return - Held, yes FACTS The assessee, a government contractor, filed his return within the period prescribed therefore. The ITO issued a notice under section 143(2) to him, whereby he was called upon to appear and produce the relevant evidence in support of the returns filed by him. Accordingly, the assessee produced the relevant documents. No, order of assessment was, however passed and no notice of demand was sent to him. Thereafter, the assessee made an application for an Income-tax Clearance Certificate. The ITO issued a certificate wherein it was stated that the returns filed by assessee were invalid. The assessee contended that he was not informed of the alleged invalidity of the returns filed by him, and requested the ITO to issue a fresh income-tax clearance certificate without any such remark. He did not receive any reply but later, he was served with three notices under section 148, wherein it was alleged that the ITO had reasons to believe that the income of the assessee, had escaped assessment within the meaning of section 147 and the assessee was called upon to file returns for the said assessment year. Against said notices, the assessee filed a writ petition alleging that since returns for relevant assessment years were already submitted by him and the assessment proceedings were pending, the ITO…

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