Section 148 requires the person to file the return of income in response to the notice. The question arises in the case of assessees whose income is otherwise exempt U/s 10 or U/s 11.
Whether notice can be issued notice u/s 148 in case of an assessee claiming exemption from filing of return of income u/s 10/11?
Here was an interesting case before Orissa High Court in Stewart Science College,Cuttack Vs ITO Ward 1(1), Cuttack.
The matter related to issue of notice u/s 148 for AY2015-16 in view of huge cash deposit in bank etc and admitted non filing of return for the said AY. The assessee being a college contended that as there was no liability to file return of income and hence the notice was bad in law.
The department on the other hand argued on plea of alternative remedy. The court after extensively dealing with the meaning of information, proceedings and initiation ,noted that that the assessee itself contradicted its own stand in the return which was filed in pursuance of notice u/s 148 and relying on entire law in this regard including in the case of Chhabil Das Agarwal, Jeans Knitwear etc , observed that the Supreme Court in the case of *ITO, Calcutta Vs Selected Dalurband Coal Company Pvt ltd (1997) 10 SCC 68(SC) has held that at the stage of issuance of notice, the only question is whether there was relevant material on which a reasonable person could have formed a reasonable belief and thus the writ petition was dismissed.
The decision has dealt with the law in relation to 148 extensively and this decision will be cited by department while dealing with plea of alternative remedy particularly in the State of Orissa, though the decision of Raza Textiles will come to assessee’s rescue that jurisdiction fact can be subject matter of writ jurisdiction.
The copy of the order is as under:
