Madhya Pradesh H.C : On a prima facie finding that the order of the AO is erroneous and prejudicial to the interest of Revenue, CIT issued notice, dt. 10th May, 2000, under s. 263 of the IT Act, calling upon the petitioner to file clarification supported with the details. It is this order of the CIT which has been challenged by the petitioner in this writ petition, filed under Arts. 226 and 227 of the Constitution of India.

High Court Of Madhya Pradesh

Bhagwandas Shobhalal Jain vs. CIT & Anr.

Sections 263, Art. 226, Art, 227

C.K. Prasad, J.

Writ Petn. No. 3362 of 2000

24th August, 2000

Counsel Appeared

B.L. Nema with Sumit Nema, for the Petitioner : A.P. Shrivastava, for the Respondent

ORDER

C.K. PRASAD, J. :

On a prima facie finding that the order of the AO is erroneous and prejudicial to the interest of Revenue, CIT issued notice, dt. 10th May, 2000, under s. 263 of the IT Act, calling upon the petitioner to file clarification supported with the details. It is this order of the CIT which has been challenged by the petitioner in this writ petition, filed under Arts. 226 and 227 of the Constitution of India. In view of the order which I propose to pass in this writ petition, it is inexpediant to give in details the facts of the case. Suffice it to say that the CIT gave notice to the petitioner under s. 263 of the IT Act. In response thereto, petitioner appeared before the CIT and prayed for time to file the reply. Petitioner ultimately filed the reply on 29th May, 2000 raising various pleas on facts and law. Thereafter, the petitioner has chosen to file this writ petition on 31st May, 2000. I have heard Sri B.L. Nema for the petitioner and Sri A.P. Shrivastava for the respondents. Mr. Nema submits that foundational facts for exercise of jurisdiction under s. 263 of the IT Act is that the CIT records a finding that the order of the AO is both erroneous and prejudicial to the interest of Revenue. He attempted to address on the merits of the case to demonstrate that the finding arrived at by the CIT while calling upon the petitioner to file its reply under s. 263 of the IT Act is unsustainable. In support of his submission, Mr. Nema has placed reliance on a large number of authorities. Mr. A.P. Shrivastava, however, appearing on behalf of the respondents submits that the stage has not come to go into the intrinsic merits of the case of the party as notice under s. 263 of the IT Act has been issued on prima facie satisfaction of the CIT that the order of the AO is both erroneous and prejudicial to the interest of Revenue. He also in support of his submission has placed reliance on a large number of authorities.

Having appreciated the rival submissions, I am of the opinion that this is not the stage at which this Court should enter into the intrinsic merits of the case of the petitioner. Foundation for exercise of the power under s. 263 of the IT Act is the prima facie satisfaction of the CIT that the order of the AO is erroneous and prejudicial to the interest of Revenue. The CIT while calling upon the petitioner to submit reply has recorded such a finding. It is well settled that this Court while exercising its power under Arts. 226 and 227 of the Constitution of India does not interfere with the show-cause notice unless an exceptional case is made out. As held earlier, foundational facts necessary for issuance of notice under s. 263 of the IT Act exist and in that view of the matter, I do not find it an exceptional case for interference at this stage. Petitioner has already filed its reply. Needless to state that the CIT shall take into consideration the pleas raised by the petitioner objectively in accordance with law. In the result, I do not find any merit in the writ petition and it is dismissed accordingly. In the facts and circumstances of the case, there shall be no order as to cost.

[Citation : 248 ITR 630]

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