Mohd Miyan v. Assistant Commissioner Of Income Tax, Circle – I, Kota

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR S.B. Civil Writ Petition No. 16567 / 2015 Mohd Miyan s/o Shri Nanneh Khan, aged about 63 years, R/o H.No.5-B-18, Vigyan Nagar, Kota – 324005. ----Petitioner Versus 1. Assistant Commissioner Of Income Tax, Circle – I, Kota. 2. Assistant Commissioner of Income Tax, Circle – II, Kota 3. Commissioner of Income Tax, Kota. ----Respondents _____________________________________________________ For Petitioner(s) : Mr.Prakul KhuranaFor Respondent(s) : Mr.Abhay Jain for Mrs.Parinitoo Jain _____________________________________________________ HON'BLE MR. JUSTICE M.N. BHANDARI Judgment 19/09/2017 By this writ petition, a challenge is made to the noticeunder Section 148 of the Income Tax Act, 1961 (for short “theAct of 1961”) dated 07[th] May, 2014 and order dated 08[th]September, 2015 passed by the respondent No.2. Learned counsel for the petitioner submits that noticeunder Section 148 of the Act of 1961 is without jurisdiction. Thereasons recorded by the respondents are untenable and, otherwise,the authority acted without jurisdiction in causing notice and,subsequently, passing the order dated 08[th] September, 2015. The notice under Section 148 of the Act of 1961 disclosed sale of the land measuring 12 hectares of khasra NO.79 to Ku.AfshaKhan (minor) for sum of Rs.3,76,963/- (mentioned as Rs.3,67,963/-in the impugned notice), whereas, as per DLC rate, the value of theproperty was Rs.3,90,00,000/- (Rs.Three Crore and Ninety Lac only). The notice aforesaid was caused by taking difference of the amount,but, ignoring the fact that the petitioner was shown to be power ofattorney holder, hence, sale of the property could not have beenaccounted against him. If, at all, notice was to be given, it shouldhave been against the land holder of the property. It is alsosubmitted that once the petitioner was shown to be power ofattorney holder, it could not have been substituted or modified,rather, the authorities were required to stick to the reason givenunder Section 148 of the Act of 1961. The sale consideration cannotbe taken against the power of attorney. In view of the above,impugned order as well as the notice under Section 148 of the Act of1961 deserves to be set aside. The respondents have acted withoutjurisdiction and authority apart from the fact that no reason tobelieve for causing notice under Section 148 of the Act of 1961exists. Learned counsel for the respondent/s has contested thewrit petition. The preliminary objection on maintainability of the writpetition has been raised. The petitioner is having alternative remedyto challenge the order dated 08[th] September, 2015, but, instead ofavailing it, this writ petition has been filed. A reference of the judgment of the Apex Court in the caseof Commissioner of Income Tax & Ors. Vs. Chhabil DassAgarwal reported in (2014) 1 SCC 603 has been given. It is further stated that notice under Section 148 of theAct of 1961 is not without jurisdiction, rather, has rightly beencaused. The petitioner had been referred as power of attorney holderof the land in dispute, as it was shown in the sale deed, but, it wasdisclosed in the balance sheet of the petitioner towards assets. While causing notice under Section 148 of the Act of 1961, it wasreferred in the same manner as was disclosed in the sale deed. A reference of the judgment of the Apex Court in the caseof Commissioner of Income Tax & Ors. Vs. Chhabil DassAgarwal reported in (2014) 1 SCC 603 has been given. It is further stated that notice under Section 148 of theAct of 1961 is not without jurisdiction, rather, has rightly beencaused. The petitioner had been referred as power of attorney holderof the land in dispute, as it was shown in the sale deed, but, it wasdisclosed in the balance sheet of the petitioner towards assets. While causing notice under Section 148 of the Act of 1961, it wasreferred in the same manner as was disclosed in the sale deed. A further reference of the gift deed executed by thepetitioner has also been given. In the gift deed at Annexure - 5, thepetitioner has shown himself to be owner of the property. It is notnow open for the petitioner to say that property was not belonging tohim, hence, it could not have been accounted against him for causingnotice under Section 148 of the Act of 1961. The much emphasis hasbeen led against use of words “power of attorney holder” in thenotice under Section 148 of the Act of 1961 in ignorance of the factthat the words aforesaid were used taking it to be from the sale deedwhere consideration was shown much below the DLC rate. Theauthority could not have changed the words used in the sale deed,but, taking into consideration that the property has been disclosed inthe balance sheet of the petitioner and even in the gift deed wherehe has shown himself to be landholder, notice was rightly caused.The prayer is accordingly made to dismiss the writ petition. I have considered the rival submissions made by learnedcounsel for the parties and perused the record. This writ petition has been filed to challenge the noticeunder Section 148 of the Act of 1961 and subsequent order dated08[th] September, 2015. It is said to be without jurisdiction. The notice under Section 148 of the Act of 1961 makes areference of power of attorney holder. The words “power of attorneyholder” have been used taking it from the sale deed executed by thepetitioner where the consideration shown is of Rs.3,76,963/-(mentioned as Rs.3,67,963/- in the impugned notice) as against thevalue of the property to be Rs.3,90,00,000/- on DLC rate, making difference of Rs.3,86,23,037/-. The property aforesaid was shown tobe asset of the petitioner in the balance sheet and he had executedthe sale deed. If the petitioner is not the owner of the property thenwhile executing the gift deed, why he had shown himself to be theowner. It is not such a case where reasons to believe recordedby the authority is without jurisdiction so as to invoke the extraordinary jurisdiction of this Court. In the case of Chhabil DassAgarwal (supra), the exercise of jurisdiction under Article 226 of theConstitution of India has not been excluded, but, when it can beexercised, has been elaborately discussed. Learned counsel for the petitioner has referred thesubsequent judgment of the Apex Court in the case of Jeans Knit(P) Ltd. Vs. Deputy Commissioner of Income Tax & Ors.reported in (2017) 145 DTR (SC) 16. Therein, the earlier judgmentin the case of Chhabil Dass Agarwal (supra) has been considered soas the judgment in the case of Calcutta Discount Co. Ltd. VS. ITOreported in (1961) 41 ITR 191 (SC). I have gone through the judgment of the Apex Court inthe case of Calcutta Discount Co. Ltd.(supra) and find that exerciseof extra ordinary jurisdiction under Article 226 of the Constitution ofIndia can be if the notice or the order is without jurisdiction. Therelevant para Nos.27 and 28 of the said judgment are quotedhereunder for ready reference : Learned counsel for the petitioner has referred thesubsequent judgment of the Apex Court in the case of Jeans Knit(P) Ltd. Vs. Deputy Commissioner of Income Tax & Ors.reported in (2017) 145 DTR (SC) 16. Therein, the earlier judgmentin the case of Chhabil Dass Agarwal (supra) has been considered soas the judgment in the case of Calcutta Discount Co. Ltd. VS. ITOreported in (1961) 41 ITR 191 (SC). I have gone through the judgment of the Apex Court inthe case of Calcutta Discount Co. Ltd.(supra) and find that exerciseof extra ordinary jurisdiction under Article 226 of the Constitution ofIndia can be if the notice or the order is without jurisdiction. Therelevant para Nos.27 and 28 of the said judgment are quotedhereunder for ready reference : “27.Mr. Sastri next pointed out that at thestage when the Income-tax Officer issued thenotices he was not acting judicially or quasi-judicially and so a writ of certiorari orprohibition cannot issue. It is well settledstage when the Income-tax Officer issued thenotices he was not acting judicially or quasi-judicially and so a writ of certiorari orprohibition cannot issue. It is well settled however that though the writ of prohibition orcertiorary will not issue against an executiveauthority, the High Courts have power toissue in a fit case an order prohibiting anexecutive authority from acting withoutjurisdiction. Where such action of anexecutive authority acting without jurisdictionsubjects or is likely to subject a person tolengthy proceedings and unnecessaryharassment, the High Courts, it is wellsettled, will issue appropriate orders ordirections to prevent such consequences. 28.Mr. Sastri mentioned more than once thefact that the company would have sufficientopportunity to raise this question, viz.,whether the Income-tax Officer had reason tobelieve that under assessment had resultedfrom non- disclosure of material facts, beforethe Income-tax Officer himself in theassessment proceedings and if unsuccessfulthere before the appellate officer or theappellate tribunal or in the High Court underSection 66(2) of the Indian Income-tax Act.The existence of such alternative remedy isnot however always a sufficient reason forrefusing a party quick relief by a writ or orderprohibiting an authority acting withoutjurisdiction from continuing such action.”fact that the company would have sufficientopportunity to raise this question, viz.,whether the Income-tax Officer had reason tobelieve that under assessment had resultedfrom non- disclosure of material facts, beforethe Income-tax Officer himself in theassessment proceedings and if unsuccessfulthere before the appellate officer or theappellate tribunal or in the High Court underSection 66(2) of the Indian Income-tax Act.The existence of such alternative remedy isnot however always a sufficient reason forrefusing a party quick relief by a writ or orderprohibiting an authority acting withoutjurisdiction from continuing such action.” The judgment of the Apex Court in the case of Jeans Knit(P) Ltd. is in reference to the earlier judgment in the case of CalcuttaDiscount Co. Ltd.(supra), though, the judgment in the case ofChhabil Dass Agarwal (supra) has also been considered. If the factsof this case are considered, I do not find that notice is without jurisdiction so as to exercise extra ordinary jurisdiction under Article226 of the Constitution of India despite existence of alternativeremedy. Even, I do not find a prima facie case on merit so as tocause interference in the impugned order, however, the findingrecorded above is only a prima facie opinion and has been expressedto find out whether the notice as well as the order passed by theauthority is without jurisdiction or not and would not be takenadverse if the petitioner avail the alternative remedy. jurisdiction so as to exercise extra ordinary jurisdiction under Article226 of the Constitution of India despite existence of alternativeremedy. Even, I do not find a prima facie case on merit so as tocause interference in the impugned order, however, the findingrecorded above is only a prima facie opinion and has been expressedto find out whether the notice as well as the order passed by theauthority is without jurisdiction or not and would not be takenadverse if the petitioner avail the alternative remedy. In the light of the discussion made above, the writpetition is dismissed without causing interference in the impugnedorder as well as in the notice under Section 148 of the Act of 1961given by the respondents. The petitioner would, however, be atliberty to take alternative remedy and, for that, any observationmade in this order would not come in his way. (M.N. BHANDARI)J. Preeti, PA/218