CIT v. Vijaybhai N. Chandrani

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The Tax Publishers2013 TaxPub(DT) 2196 (SC) : (2014) 060 (I) ITCL 0597 : (2013) 357 ITR 0713 : (2013) 261 CTR 0225 : (2013) 217 TAXMAN 0138 : (2013) 091 DTR 0202 Constitution of India, 1950 --WritMaintainability Existence of alternative remedy--Assessing authority had recorded a satisfaction note for initiation of proceedings under section 153 C to the effect that, he had reason to believe that a case of escapement of income might exist and therefore assessee's case required to be reassessed for assessment years 2001-2002 to 2006-2007 under section 153C. Accordingly, assessing officer had issued six Show-Cause Notices under section 153C to the assessee for reassessment of income of the aforesaid six assessment years and directed him to furnish return of income in respect of the said assessment years. Upon receipt of said notice, assessee requested assessing officer to provide seized documents and after receipt of same assessee had approached High Court in a writ petition questioning the six show-cause notices. *Held:* Not rightly so, as the assessee had invoked the writ jurisdiction of the High Court at the first instance without first exhausting the alternate remedies provided under the Act. During the course of proceedings, High Court ought not have entertained the writ petition and instead, should have directed the assessee to file reply to the said notices and upon receipt of a decision from the Assessing Authority, if for any reason it was aggrieved by the said decision, to question the same before the forum provided under the Act. Therefore, the impugned judgment of High Court was set aside. Constitution of India, 1950, Article 226 Income Tax Act, 1961, Section 153C In the Supreme Court of India H. L. Dattu & Dipak Misra, J.J. CIT v. Vijaybhai N. Chandrani Civil Appeal Nos. 5888 to 5903 of 2013 18 July, 2013 Petitioner by : Arijit Prasad, Sahil Tagotra, B.V. Balaram Das & Anil Katiyar Respondent by : Amar Dave, Vikramaditya Bhaskar, P. S. Sudheer, D. N. Ray, Lokesh Choudhary, Sumita Ray & Rahul Gupta ORDER Delay in filing and refiling Special Leave Petitions is condoned. 2. Leave granted. C.A. No. 5888 of 2013 @ S.L.P. (C) No. 8947 of 2011 : 3. This appeal is directed against the judgment and order passed by the High Court of Gujarat in S.C.A. No.13787 of 2009, dated 30-3-2010, whereby and whereunder the High Court has set aside the Show Cause Notices issued by the Assessing Authority under section 153C of the Income Tax Act, 1961 (hereinafter referred to as the Act, 1961), dated 7-10-2009. 4. Brief facts of the case are : The respondent-assessee purchased a plot of land from 'Samutkarsh Co-operative Housing Society' (for short the Society) being developed by one Savvy Infrastructure Ltd. In 2008, a search was conducted under section 132 of the Act, 1961 in the premises of the Society and also at the office of Savvy Infrastructure Ltd. During the search certain documents were seized under section 132A of the Act, 1961. Upon scrutiny, it was found that the seized documents reflected names of certain individuals including the assessee. Accordingly, for further proceedings the Assessing Authority had transmitted the seized documents to the jurisdictional Assessing Authority in whose jurisdiction the assessee was being assessed. After receipt of the said information/documents, the Assessing Authority has recorded a satisfaction note dated 06.10.2009, that, he has reason to believe that a case of escapement of income may exist and therefore the assessees case requires to be reassessed for assessment years 2001-2002 to 2006-2007 under section 153C of the Act, 1961. The relevant paragraphs of the said satisfaction note read as under: SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2013 TaxPub(DT) 2196 (SC) : (2014) 060 (I) ITCL 0597 : (2013) 357 ITR 0713 : (2013) 261 CTR 0225 : (2013) 217 TAXMAN 0138 : (2013) 091 DTR 0202

Constitution of India, 1950

--WritMaintainability Existence of alternative remedy--Assessing authority had recorded a satisfaction note for initiation of proceedings under section 153 C to the effect that, he had reason to believe that a case of escapement of income might exist and therefore assessee's case required to be reassessed for assessment years 2001-2002 to 2006-2007 under section 153C. Accordingly, assessing officer had issued six Show-Cause Notices under section 153C to the assessee for reassessment of income of the aforesaid six assessment years and directed him to furnish return of income in respect of the said assessment years. Upon receipt of said notice, assessee requested assessing officer to provide seized documents and after receipt of same assessee had approached High Court in a writ petition questioning the six show-cause notices. Held: Not rightly so, as the assessee had invoked the writ jurisdiction of the High Court at the first instance without first exhausting the alternate remedies provided under the Act. During the course of proceedings, High Court ought not have entertained the writ petition and instead, should have directed the assessee to file reply to the said notices and upon receipt of a decision from the Assessing Authority, if for any reason it was aggrieved by the said decision, to question the same before the forum provided under the Act. Therefore, the impugned judgment of High Court was set aside.

Constitution of India, 1950, Article 226

Income Tax Act, 1961, Section 153C

In the Supreme Court of India

H. L. Dattu & Dipak Misra, J.J.

CIT v. Vijaybhai N. Chandrani

Civil Appeal Nos. 5888 to 5903 of 2013

18 July, 2013

Petitioner by : Arijit Prasad, Sahil Tagotra, B.V. Balaram Das & Anil Katiyar

Respondent by : Amar Dave, Vikramaditya Bhaskar, P. S. Sudheer, D. N. Ray, Lokesh Choudhary, Sumita Ray & Rahul Gupta

ORDER

Delay in filing and refiling Special Leave Petitions is condoned.

2. Leave granted.

C.A. No. 5888 of 2013 @ S.L.P. (C) No. 8947 of 2011 :

3. This appeal is directed against the judgment and order passed by the High Court of Gujarat in S.C.A. No.13787 of 2009, dated 30-3-2010, whereby and whereunder the High Court has set aside the Show Cause Notices issued by the Assessing Authority under section 153C of the Income Tax Act, 1961 (hereinafter referred to as the Act, 1961), dated 7-10-2009.

4. Brief facts of the case are :

The respondent-assessee purchased a plot of land from 'Samutkarsh Co-operative Housing Society' (for short the Society) being developed by one Savvy Infrastructure Ltd. In 2008, a search was conducted under section 132 of the Act, 1961 in the premises of the Society and also at the office of Savvy Infrastructure Ltd. During the search certain documents were seized under section 132A of the Act, 1961. Upon scrutiny, it was found that the seized documents reflected names of certain individuals including the assessee. Accordingly, for further proceedings the Assessing Authority had transmitted the seized documents to the jurisdictional Assessing Authority in whose jurisdiction the assessee was being assessed. After receipt of the said information/documents, the Assessing Authority has recorded a satisfaction note dated 06.10.2009, that, he has reason to believe that a case of escapement of income may exist and therefore the assessees case requires to be reassessed for assessment years 2001-2002 to 2006-2007 under section 153C of the Act, 1961. The relevant paragraphs of the said satisfaction note read as under: