Law:

Section:

Section 148 of the Income-tax Act, 1961 - Income escaping assessment - Issue of notice for - Assessment year 1967-68 - On a writ petition questioning notice issued under section 148 to assessee, Single Judge quashed said notice holding that very basis of forming opinion was not sustainable in law - Whether Single Judge was not right to quash said notice at its threshold as writ Court is not entitled to go into question of sufficiency or correctness of reasons - Held, yes FACTS The assessee, by way of a writ petition, challenged the notice issued by the Assessing Officer under section 148. The Single Judge found that im- pugned notice was issued on the basis of the valuation report of the DVO on the cost of construction of the property. The Single Judge, therefore, held that the very basis of forming the opinion was not sustainable, in law, and, hence, the notice issued under section 148 was liable to be quashed. On writ appeal : HELD The Apex Court, in the case of Raymond Woollen Mills Ltd. v. ITO [1999] 236 ITR 34, held that insufficiency of reasons could not be a ground for quashing of the notice under section 148 at its threshold. Such law is still good law and is binding upon the Court. The Apex Court,in the case of Smt. Amiya Bala Paul v. CIT [2003] 262 ITR 407/ 130 Taxman 511 , held that either under section 133(6) or under section 142, the ITO was not entitled to seek report from the Valuation Officer. Hence, the report of the Valuation Officer could not be the basis of issuance of notice under section 148. The said was delivered on 7-7-2003. The Legislature thereafter amended the law by incorporating section 142A by the Finance (No. 2) Act of 2004, making it retrospective from 15-11-1972. Hence, the ratio decided by the Apex Court in the case of Smt. Amiya Bala Paul (supra) is no more applicable. The impugned notice, however, was issued proposing reopening of the assessment for the year 1967-68. Hence, the report of the Valuation Officer could not be relied on by the revenue in terms of section 142A. The ratio decided inSmt. Amiya Bala Paul's case (supra) would be squarely applicable to the instant case. However, the record of reasons was not based upon…

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