IN HIGH COURT OF KERALA AT ERNAKULAM PRESENT HONOURABLE MR. JUSTICE AMIT RAWAL THURSDAY, 13TH DAY OF FEBRUARY 2020 / 24TH MAGHA, 1941 WP(C).No.1020 OF 2020(B) PETITIONER: OLLUKKARA SERVICE CO-OPERATIVE BANK LIMITED NO. 544, REPRESENTED BY ITS SECRETARY, MANNUTHY P.O, THRISSUR DISTRICT, KERALA, PIN 680561 BY ADVS. SRI. C. A. JOJO SRI. MATHEWS JOSEPH RESPONDENTS: 1 INCOME TAX OFFICER WARD 2(3),AYAKAR BHAVAN, SHAKTHAN STAND, THRISSUR 680001 2 PRINCIPAL COMMISSIONER, AYAKAR BHAVAN, SAKTHAN STAND, THRISSUR 680001 BY SRI. JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13.02.2020, COURT ON SAME DAY DELIVERED FOLLOWING: WP(C).No.1020 OF 2020(B) 2 JUDGMENT Dated this 13th day of February 2020 petitioner in this writ petition has approached this Court challenging Ext.P1 notice dated 29.3.2019 issued under Section 148 of Income Tax Act, 1961 calling upon assessee to give reasons on account of having escaped notice of assessment for year 2012-2013. Petitioner stated to have received notice on 1.4.2019 and he filed Ext.P4 objection calling upon officer to supply copy of Ext.P3 which was supplied by Ext.P5. Again petitioner submitted request by Ext.P6. assessing officer dealt with all objections filed and gave answers particularly on point of approval of competent authority. 2. learned counsel appearing on behalf of petitioner submits that entire exercise resulted into WP(C).No.1020 OF 2020(B) 3 passing of Ext.P8 assessment order dated 24.12.2019. notice exercised beyond period of limitation as six years for assessement year 2012-2013 expired on 31.3.2019, whereas notice received on 1.4.2019. approval of competent authority, Income Tax Officer did not have alleged approval dated 6.11.2019 was from technical office. In such circumstances writ would definitely lie were notice lacked reason as to how and in what manner provisions of Section 148 were invoked. 3. Per contra, learned counsel for Income Tax Department submits that it is now settled law that where notice has been issued within period of limitation even if it is received post expiry, it would not be termed to be beyond limitation. In support of aforementioned contention, reliance has been placed on judgment of Honourable Supreme Court in R.K.Upadhya v. Shanabhat P.Patel [1987 ITR 163]. It is further contended that Ext.P7 has met out all objections WP(C).No.1020 OF 2020(B) 4 raised by petitioner including supply of approval authorising officer to initiate proceedings under Section 148 of Act and request this Court for dismissal of writ petition. 4. Having heard learned counsel for parties and perused documents, there is no merits on submission of learned counsel for petitioner as in absence of challenge of assessment order dated 24.12.2019, notice issued under Section 148 of Act, become consequential as remedy was to assail order of assessment in appeal. This Court cannot remain unmindful of fact that present writ petition has been filed on 14.1.2020, post passing of assessment orders. As regards, contention of non supply of approval, same has duly been met as reflected in Ext.P7. relevant portion of objection and answer reads thus:- 5. We were not supplied with copy of approval WP(C).No.1020 OF 2020(B) 5 of competent authority to issue notice u/s 148 of Income-tax Act, 1961 assessee has been provided with copy of approval of competent authority both through e- proceedings and through registered post along with letter dated 06/11/2019. Therefore objection raised on this ground is also incorrect and therefore overruled. 5. As regards question of limitation of law of purpose of computing limitation would be date of issuance of notice and not from date of receipt. Relevant paragraph of judgment in R.K.Upadhya (Supra) reads as follows :- Section 34, conferred jurisdiction on Income-tax Officer to reopen assessment subject to service of notice within prescribed period. Therefore, service of notice within limitation was foundation of jurisdiction. same view has been taken by this court in Jani v.Induprasad Devshankar Bhatt[1969]72ITR 595 as also in CIT v. Robert [1963] WP(C).No.1020 OF 2020(B) 6 48 ITR 177 (SC). High Court, in our opinion, went wrong in relying upon ratio of Banarsi Debi v. ITO [1964] 53 ITR 100, in disposing of case in hand. scheme of 1961 Act so far as notice for reassessment is concerned is quite different. What used to be contained in section 34 of 1922 Act has been spread out into three sections, being sections 147, 148 and 149, in 1961 Act. clear distinction has been made out between issue of notice and service of notice under 1961 Act. Section 149 prescribes period of limitation. It categorically prescribes that no notice under section 148(1) provides for service of notice as condition precedent to making order of assessment. Once notice is issued within period of limitation, jurisdiction becomes vested in Income-tax Officer to proceed to reassess. mandate of section 148(1) is that reassessment shall not be made until there has been service. requirement of issue of notice is satisfied when notice is actually issued. In this case, admittedly, notice was issued within prescribed period of limitation as March 31, 1970, was last day of that period. Service under new Act is not condition precedent to conferment of jurisdiction on WP(C).No.1020 OF 2020(B) 7 Income-tax Officer to deal with matter but it is condition precedent to making of order of assessment. Hight Court, in our opinion, lost sight of distinction and under wrong basis felt bound by judgment in Banarsi Debi v. ITO [1964] 53 ITR 100. As Income-tax Officer had issued notice within limitation, appeal is allowed and order of High Court is vacated. Income-tax Officer shall now proceed to complete assessment after complying with requirements of law. Since there has been no appearance on behalf of respondents, we make no orders for costs. For reason aforementioned, writ petition is devoid of merits and accordingly dismissed. SD/- AMIT RAWAL JUDGE ACM/14.2.2020 WP(C).No.1020 OF 2020(B) 8 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF NOTICE U/S. 148 DATED 29-03-2019 ISSUED BY 1ST RESPONDENT EXHIBIT P2 TRUE COPY OF ACKNOWLEDGEMENT COPY OF TAX RETURN FOR AY 2012-13 EXHIBIT P3 TRUE COPY OF LETTER SUBMITTED TO 1ST RESPONDENT DATED 02-11-2019 EXHIBIT P4 TRUE COPY OF REPLY NOTICE DATED 06-11-2019 ISSUED BY 1ST RESPONDENT EXHIBIT P5 TRUE COPY OF LETTER OF INTIMATION DATED 29-03-2019 ISSUED BY INCOME TAX OFFICER. EXHIBIT P6 TRUE COPY OF LETTER DATED 12-11- 2019 SUBMITTED BY PETITIONER TO 1ST RESPONDENT EXHIBIT P7 TRUE COPY OF ORDER DATED 24-12- 2019 ISSUED BY 1ST RESP[ONDENT EXHIBIT P8 TRUE COPY OF ASSESSMENT ORDER WITH DEMAND NOTICE DATED 24-12-2019 ISSUED BY 1ST RESPONDENT. Ollukkara Service Co-Operative Bank Limited v. Income-tax Officer, Ward-2(3), Thrissur / Principal Commissioner, Thrissur