Section 142(1) in The Income Tax Act, 1961

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(1)For the purpose of making an assessment under this Act, the Assessing Officer may serve on any person who has made a return under section 115WD or section 139 or in whose case the time allowed under sub-section (1) of section 139 for furnishing the return has expired a notice requiring him, on a date to be therein specified,—

(i)where such person has not made a return within the time allowed under sub-section (1) of section 139 or before the end of the relevant assessment year, to furnish a return of his income or the income of any other person in respect of which he is assessable under this Act, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed, or* :

Provided that where any notice has been served under this sub-section for the purposes of this clause after the end of the relevant assessment year commencing on or after the 1st day of April, 1990 to a person who has not made a return within the time allowed under sub-section (1) of section 139 or before the end of the relevant assessment year, any such notice issued to him shall be deemed to have been served in accordance with the provisions of this sub-section:[Provided further that a notice under this sub-section for the purposes of this clause may also be served by the prescribed income-tax authority,†]

(ii)to produce, or cause to be produced, such accounts or documents as the Assessing Officer may require, or

(iii)to furnish in writing and verified in the prescribed manner information in such form and on such points or matters (including a statement of all assets and liabilities of the assessee, whether included in the accounts or not) as the Assessing Officer may require :

Provided that—

(a)the previous approval of the Joint Commissioner shall be obtained before requiring the assessee to furnish a statement of all assets and liabilities not included in the accounts;

(b)the Assessing Officer shall not require the production of any accounts relating to a period more than three years prior to the previous year.

Section 142(1) in The Income Tax Act, 1961

(ii)to produce, or cause to be produced, such accounts or documents as the Assessing Officer may require, or

Provided that—

(a)the previous approval of the Joint Commissioner shall be obtained before requiring the assessee to furnish a statement of all assets and liabilities not included in the accounts;

(b)the Assessing Officer shall not require the production of any accounts relating to a period more than three years prior to the previous year.

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Short Summary

This case concerns the interpretation and application of Section 142(1) of the Income Tax Act, 1961. The core issue revolves around the Income Tax Officer's (ITO) power to compel an assessee to furnish information or produce documents during assessment proceedings. The section empowers the ITO to make inquiries before assessment.

Facts

The case likely involves a dispute between an assessee (a person liable to pay income tax) and the Income Tax Department. The ITO, exercising powers under Section 142(1), issued a notice to the assessee, requiring them to furnish certain information or produce specific documents. The assessee challenged the validity or scope of this notice, potentially arguing that the ITO's demands were excessive, irrelevant, or beyond the scope of the section. The specific facts regarding the nature of the information sought or the assessee's business are not provided in the prompt.

Issues

The central legal issue is the scope and limitations of the ITO's power under Section 142(1) of the Income Tax Act, 1961. Sub-issues might include:

Whether the information/documents sought by the ITO were relevant to the assessment.
Whether the ITO's notice was issued in accordance with the procedural requirements of Section 142(1).
Whether the information was already available to the ITO.
Whether the ITO's demand was arbitrary or unreasonable.

Petitioner's Arguments

The petitioner (likely the assessee) would likely argue that:

The information/documents demanded were not relevant to the assessment of their income.
The ITO was acting beyond the scope of the powers granted by Section 142(1).
The ITO already possessed the information, making the demand unnecessary.
The demand was oppressive and placed an undue burden on the assessee.
The notice was not issued following proper procedure.

Respondent's Arguments

The respondent (likely the Income Tax Department) would likely argue that:

The information/documents were necessary for a proper assessment of the assessee's income.
The ITO was acting within the powers conferred by Section 142(1).
The information was not already available or was not sufficiently detailed.
The demand was reasonable and necessary to prevent tax evasion.
The notice was properly issued and complied with the procedural requirements.

Court's Reasoning

The court's reasoning would center on interpreting the language of Section 142(1) and determining the extent of the ITO's powers. The court would likely consider:

The purpose of Section 142(1), which is to enable the ITO to make a proper assessment.
The requirement that the information sought must be relevant to the assessment.
The principles of natural justice, which require that the assessee be given a fair opportunity to be heard.
The need to balance the ITO's powers with the assessee's rights.

Conclusion

The court's ruling would depend on its interpretation of Section 142(1) and the specific facts of the case. The court might:

Uphold the ITO's notice, finding that it was valid and within the scope of Section 142(1).
Quash the ITO's notice, finding that it was excessive, irrelevant, or beyond the scope of Section 142(1).
Modify the ITO's notice, requiring the assessee to furnish only certain information or documents.
Direct the ITO to follow a specific procedure in issuing future notices under Section 142(1).