High Court Of Himachal Pradesh
Pankaj Goyal vs. CIT & ANR.
Section 263, Art. 226, Art. 227
V.K. Gupta, C.J. & M.R. Verma, J.
Civil Writ Petn. Nos. 172 to 182 of 2004
22nd June, 2004
Counsel Appeared :
P.K. Jain with Rakesh Sharma, for the Petitioner : Vinay Kuthiala, for the Respondents
JUDGMENT
V.K. Gupta, C.J. :
What is under challenge in these petitions filed under Arts. 226 and 227 of the Constitution of India are show- cause notices issued by respondent No. 1 in terms of s. 263 of the IT Act, 1961. Mr. P.C. Jain, learned counsel appearing for the petitioners, has assailed the impugned show-cause notices on the ground of these being without jurisdiction whereas Mr. Kuthiala, learned counsel appearing for the respondents, has submitted that respondent No. 1 has issued these show-cause notices as a prelude to his exercising revisional jurisdiction in terms of s. 263 and that the impugned show-cause notices do not suffer from any error of jurisdiction.
The prerequisite for the exercise of jurisdiction by the CIT suo motu in terms of s. 263 is that the order of the AO is erroneous insofar as it is prejudicial to the interests of the Revenue. The CIT has to be satisfied about the aforesaid based on two conditions and these two conditions are, firstly that the order of the AO sought to be revised under s. 263 is erroneous, and secondly that it is prejudicial to the interests of the Revenue. If any one of the aforesaid two conditions is absent, either the order is erroneous, but it is not prejudicial to the interests of the Revenue, or the order is not erroneous but it is prejudicial to the interests of the Revenue, recourse to s. 263 cannot be had by the CIT.
We have very carefully seen the impugned show-cause notices and find that insofar as respondent No. 1 is concerned, he has recorded his prima facie opinion, on the basis of the contents of the notices that the orders passed by the AO which the CIT seeks now to revise under s. 263 are erroneous as well as they are prejudicial to the interests of the Revenue. That being the case, therefore, it cannot be said that the impugned show-cause notices are without jurisdiction or suffer from any error of jurisdiction. In that view of the matter, therefore, while exercising our extraordinary writ jurisdiction under Arts. 226 and 227 of the Constitution of India, we cannot pre- empt the proceedings initiated by respondent No. 1 under s. 263. Whether ultimately respondent No. 1 revises the orders of the AO or drops the proceedings under s. 263 and decides not to revise the order is a matter which will fall within the domain of his consideration, on the merits of the cases. The impugned show-cause notices only contain certain recitals which perhaps formed the basis of forming a tentative or a prima facie opinion enabling him to initiate the proceedings under s. 263 of the Act. The recitals in the impugned show-cause notices undoubtedly cannot be the influencing factors in passing the final orders. The final orders under s. 263 have to be passed after affording effective and adequate opportunity of hearing to the petitioners and on the basis of the merits of the cases and in accordance with law. They have to be passed on the basis of well established principles governing the exercise of revisional jurisdiction under s. 263 of the Act. That being the case, therefore, the petitioners cannot have a legitimate grievance that the recitals in the impugned show-cause notices would amount to prejudging the issue. The recitals in the impugned show-cause notices surely cannot be the basis of any judgment or order that the CIT has to ultimately pass because that would depend on the merits of the cases as would be brought out before him both by the petitioners as well as the Revenue.
On the basis of the aforesaid observations, therefore, we feel totally disinclined to interfere in the proceedings at this stage, particularly when we know that if at all, on the merits of the cases respondent No. 1 ultimately passes adverse orders against the petitioners, the petitioners have the remedy of filing statutory appeals against the same before the appellate forum.
The writ petitions are dismissed. CMP No. 335 of 2004 in CWP No. 172 of 2004. CMP No. 336 of 2004 in CWP No. 173 of 2004. CMP No. 337 of 2004 in CWP No. 174 of 2004. CMP No. 338 of 2004 in CWP No. 175 of 2004. CMP No. 342 of 2004 in CWP No. 176 of 2004. CMP No. 343 of 2004 in CWP No. 177 of 2004. CMP No. 344 of 2004 in CWP No. 178 of 2004. CMP No. 345 of 2004 in CWP No. 179 of 2004. CMP No. 346 of 2004 in CWP No. 180 of 2004. CMP No. 347 of 2004 in CWP No. 181 of 2004. CMP No. 348 of 2004 in CWP No. 182 of 2004.
In view of the dismissal of the writ petitions, all the applications are also dismissed and the interim orders shall accordingly stand vacated.
[Citation : 270 ITR 201]
