I) WHETHER THE WRIT PETITION CHALLENGING THE NOTICE UNDER

SECTION 148 OF THE ACT IS MAINTAINABLE OR NOT

It is humbly submitted before this Hon’ble Court that the Writ Petition challenging the
notice under section 148 of the Act is maintainable as there were no appropriate grounds
for the initiation of reassessment proceedings u/s 148, there was lack of jurisdiction of
part of the High Court, and an appeal is subjudice on the assessee.
A) THAT THERE WERE NO APPROPRIATE GROUNDS FOR THE INITIATION
OF REASSESSMENT PROCEEDINGS U/S 148.
1) It is respectfully submitted before the Hon’ble Court that merely relying on the search
and seizure of a third party i.e. ZT Group, details of which have not been provided, an
action cannot be iniatiated against any other party. Moreover, there is no prima facie
evidence, but merely a journal entry on a piece of paper proving any default on part of the
assessee.
2) The counsel on the contentions stated above submits that Hon'ble Supreme Court in the
case of New Delhi Television Limited v DCIT 1, in the context of disclosure of ‘fully and
truly all material facts necessary for his assessment' has held that “the obligation of the
assessee is to disclose all primary facts before the AO and he is not required to give any
further assistance to the AO by disclosure of other facts”.In GKN Driveshaft case it was
held by the apex court that only on mere mechanical grounds a reassessment proceeding
should not be opened to harass an assessee, which was also stated in Omkam developers
ltd v. ITO (ITAT Delhi).
2
3) In Plus Paper food Pac Ltd. v. ITO it was held that, “If the recorded reasons show
contradiction and inconsistency it means necessary satisfaction in terms of the statutory
provision has not been recorded at all. The Court cannot be called upon to indulge in
guess work or speculate as to which reason has enabled the AO to act . On said issue
reassessment was quashed”.  Reason must be based on the relevant material on record at
the time of recording reasons. 

1
New Delhi Television Limited v DCIT, (Civil Appeal No. 1008 Of 2020).
2
Plus Paper food Pac Ltd. v. ITO, (2015) 374 ITR 485.
 4) In Infotech Ltd v/s. ACIT3, it was stated that the reopening of assessment u/s. 147 is a
potent power not to be lightly exercised. It certainly cannot be invoked casually or
mechanically. The heart of the provision is the formation of belief by the Assessing
Officer that income has escaped assessment. The reasons so recorded have to be based on
some tangible material and that should be evident from reading the reasons. It cannot be
supplied subsequently either during the proceedings when objections to the reopening are
considered or even during the assessment proceedings that follow. This is the bare
minimum mandatory requirement of the first part of section 147(1) of the Act. Hon’ble
High Court thus dismissed the appeal observing that the reasons recorded by the AO for
reopening the assessment under section 147 did not meet the statutory conditions and
there was non-application of mind on the part of the A.O.
5) In case of Deepraj Hospital (P) Ltd. v. ITO4, the Tribunal held that; If the reopening is
based on information received from the investigation dept, the reasons must show that the
AO independently applied his mind to the information and formed his own opinion. If the
reopening is done mechanically, it is void. Also, if the reasons refer to any document, a
copy should be provided to the assessee. Failure to do so results in breach of natural
justice and renders the reopening void. Reassessment solely made on the basis of
information received from investigation wing as assessee was beneficiaries of
accommodation entries was held to be not valid when no cross examination allowed to
the assessee which was appreciated in ITO v. Reliance Corporation5

B) THAT THERE WAS LACK OF JURISDICTION ON PART OF THE HIGH

COURT.

1) The present petition has been filed in the High Court, which on the other hand is conferred
upon the jurisdiction to deal with the case. There are certain guidelines laid down in GKN
case which are ough to be adhered with, but apparently in the present suit are ignored.
According to the guidelines under sections 147/148: It is mandatory for the AO to follow

3
Infotech Ltd v/s. ACIT, (2010) 329 ITR 257.
4
Deepraj Hospital (P) Ltd. v. ITO, (2018) 65 ITR 663.
5
ITO v. Reliance Corporation, (2017) 55 ITR 69 (SN).
 the procedure laid down in GKN Driveshafts and to pass a separate order to deal with the
objections.

2) The disposal of the objections in the assessment order is not sufficient compliance with
the procedure. The failure to follow the procedure renders the assumption of jurisdiction
by the Assessing Officer ultra vires as held in the case of Bayer Material Science6 382
ITR 333 (Bom) & KSS Petron Fomento Resorts & Hotels Ltd vs. ACIT7.

3) AO can assume jurisdiction under this provision only if he has sufficient material before
him; he cannot form belief on the basis of his whim and fancy and the existence of
material must be real. Further, there must be nexus between the material and escapement
of income. Statement recorded at the time of survey does not have evidentiary value,
therefore, cannot be the basis for reopening. In Alfa Radiological Centre Pvt. Ltd. v. ITO8,
reassessment proceedings initiated u/s 148 by AO based on survey statement was held to
be invalid and thereby were quashed.
 
C) THAT WHEN APPEAL IS ALREADY PENDING OR SUBJUDICE THEN NO
REASSESSMENT PROCEEDING COULD BE INITIATED AGAINST THE
SAME ASSESSEE.
1) It is humbly submitted before the Hon’ble Court that in the instant case an appeal is
subjudice before the authorityand when appeal on original assessment order is pending,
reassessment cannot be done as the original order is merged with order of higher
authorities.
2) In Chika Overseas (P) Ltd9, it was held that when appeal was pending before ITAT and
the matter was subject matter of appeal before CIT(A), no reassessment proceedings can
be initiated. Once an issue is subject matter of appeal before Tribunal, issuance of notice
of reassessment on said ground has to be considered bad in law.

6
Bayer Material Science v. DCIT, 382 ITR 333 (Bom).
7
KSS Petron Fomento Resorts & Hotels Ltd vs. ACIT, TAX APPEAL NO.63 OF 2007.
8
Alfa Radiological Centre Pvt. Ltd. v. ITO,(2015) 44 ITR 184.

9
CIT-1 V. Chika Overseas (P) Ltd, (2011) 131 ITD 471
 3) Similarly, in case of Metro Auto Corporation v. ITO10, Bombay HC relied upon a
decision given in case of Ador Technopack Ltd. Vs. DCIT 11, to the effect that during the
pendency of any appeal proceedings the assessment could not be treated as final. Hence,
notice can not be issued u/s 148 as the proceedings are yet pending and it results in non
completion of earlier proceedings / assessment in toto.

10
Metro Auto Corporation v. ITO ,(2006) 286 ITR 618.
11
Ador Technopack Ltd. Vs. DCIT, 2004 140 TAXMAN 16 Bom.