M/S. Mahalaxmi Jewellers v. Union Of India

HIGH COURT OF JUDICATURE FOR RAJASTHAN ATJODHPUR S.B. Civil Writ Petition No. 6112/2019 M/s. Mahalaxmi Jewellers, through its Proprietor Smt. SantoshSoni W/o Shri Rajendra Verma, aged 44 years, Resident ofSunaron Ka Bas, Ghoron Ka Chowk, Jodhpur. ----Petitioner Versus 1. Union of India, through the Principal Commissioner ofIncome Tax-2, Jodhpur.Income Tax-2, Jodhpur. 2. Income Tax Officer, Ward-3(3), Jodhpur. ----Respondents For Petitioner(s) : Mr. Sandeep Bhandawat with Mr. Shanker Singh.Shanker Singh.For Respondent(s): Mr. Sunil Bhandari. HON'BLE MR. JUSTICE P.K. LOHRA 16/05/2019 Order Petitioner-assessee, through its Proprietor Smt. SantoshSoni, has preferred this writ petition under Article 226 of theConstitution to assail summons dated 1[st] of March, 2019(Annex.3) and 26[th] of April, 2019 (Annex.6), with a prayer toannul the same. Apart from that, the petitioner has also cravedfor quashment of consequential proceedings, undertaken by therespondent-Department, pursuant to impugned summons Annex.3& 6 respectively. The facts, in brief, are that petitioner furnished its tax-returnon 29[th] of October, 2018 for Assessment Year 2018-19 and,thereupon, as per return the income was accordingly assessed. Petitioner has averred in the petition that although no proceedingwas pending against it before any authority under the Income-taxAct, 1961 (for short, ‘Act’), yet a survey was carried at thebusiness premises of the firm on 1[st] of March 2019 by resorting toSection 133(A) of the Act. It is further averred that during thecourse of survey, statements of Manager of the firm, i.e.petitioner’s husband, were recorded, which were concurred by thepetitioner as proprietor of the firm. Some queries were alsomade and answers thereto were solicited from petitioner and thenshe was served summons dated 1[st] and 5[th] of March, 2019(Annex.3 & 4) respectively under Section 131(1A) of the Act. Asper version of the petitioner, impugned summons were issued bysecond respondent without any authority. Be that as it may, thepetitioner challenged summons before this Court by filing CivilWrit Petition No.4585/2019, which came up for considerationbefore Court on 23[rd] of April 2019, and the Court, after hearingrival contentions, decided the same. Operative part of order dated23[rd] of April, 2019, reads as under: “In this view of the matter, the writ petition isallowed and the impugned notice/summon is, hereby,quashed and set aside. However, before parting it is made clear that the respondent Department shall be at liberty to takeappropriate action against petitioner-assessee inaccordance with law.” Petitioner has further submitted that to camouflage mistakein issuing unauthroized summon, now summon (Annex.6) underSection 131(1) of the Act is issued on 26[th] of April, 2019, askingthe petitioner to furnish books of account and/or other documentswith a word of caution that failure would entail penalty under Section 272A(1) of the Act. Summon (Annex.6) is challenged onvarious counts including non-fulfilment of conditions under Section131(1) of the Act. Besides that, the summon (Annex.6) is alsoassailed on various grounds. However, before parting it is made clear that the respondent Department shall be at liberty to takeappropriate action against petitioner-assessee inaccordance with law.” Petitioner has further submitted that to camouflage mistakein issuing unauthroized summon, now summon (Annex.6) underSection 131(1) of the Act is issued on 26[th] of April, 2019, askingthe petitioner to furnish books of account and/or other documentswith a word of caution that failure would entail penalty under Section 272A(1) of the Act. Summon (Annex.6) is challenged onvarious counts including non-fulfilment of conditions under Section131(1) of the Act. Besides that, the summon (Annex.6) is alsoassailed on various grounds. On behalf of respondent-Department, reply to the writpetition is submitted. In the return, the respondent-Departmenthas raised some preliminary objections and has stoutly defendedits action in issuing summon (Annex.6). It is averred that thesecond respondent is authorized to issue said summon under sub-section (1) of Section 131 of the Act. The respondent has alsoasserted in the preliminary objection that the writ petition ispremature, inasmuch as, second respondent has not passed anyorder but has simply solicited certain information from theassessee. Joining issue with the petitioner, the respondent-Department has raised the preliminary objection that instant caseinvolves many disputed question of facts, and therefore, it wouldnot be appropriate to exercise extraordinary jurisdiction underArticle 226 of the Constitution. On merits also, it is stated byrespondent-Department that the facts averred in para 3 to 7 and14 of the writ petition are vague, cryptic and far from truth, andtherefore, not worth any credence. It is also submitted in thereturn that proceedings and inquiry against the petitioner is invogue and the same has not been concluded yet. Relying on thestatements recorded under Section 133A(3)(iii)/131 of the Act, itis stated that during the course of survey various documents andinformation were not supplied by the petitioner and the proprietorof petitioner-firm also not corroborated the same and thatnecessitated issuance of summon under Section 131(1) of the Act. The respondent-Department has also relied on the informationdivulged by the petitioner during inquiry, in response to QuestionsNo.10, 13, 14, 16 and 17 put by the Department. TheDepartment has also pleaded that second respondent has issuedsummon as per provisions of the Act and it is authorized to issuethe same. Besides that, many other facts are incorporated in thereply to defend the action of respondent-Department. Whilereferring to sub-section (3) of Section 133A of the Act, amendedby Finance Act, 2002 w.e.f. 01.06.2002, inserting clause (ia), it iscontended by the respondent-Department that questioning itsaction is wholly unfounded and if such contention is accepted, thesame would render the said amendment otiose or nugatory. Inthe return, while highlighting powers of the authority underSection 131(1) of the Act, the respondent-Department has alsopleaded that the powers vested under the said provision with theauthority concerned are akin to powers of a Court under Code ofCivil Procedure, 1908. In substance, the Department hasdefended its action with the prayer to thwart the petition of thepetitioner-assesee. I have heard learned counsel for the parties and perused thematerials available on record. The first and the foremost question, which has emerged forconsideration, is validity of the summons issued to the assessee.At the outset, it may be observed that earlier summons wereissued by second respondent to the petitioner under Section131(1A) of the Act and the same was annulled by the Court whiledeciding Writ Petition No.4585/2019. The Court has found that second respondent was neither authorized, nor having jurisdictionto issue summons, and therefore, it was quashed. I have heard learned counsel for the parties and perused thematerials available on record. The first and the foremost question, which has emerged forconsideration, is validity of the summons issued to the assessee.At the outset, it may be observed that earlier summons wereissued by second respondent to the petitioner under Section131(1A) of the Act and the same was annulled by the Court whiledeciding Writ Petition No.4585/2019. The Court has found that second respondent was neither authorized, nor having jurisdictionto issue summons, and therefore, it was quashed. Now, in the present matter, summon under challenge isunder Section 131(1) of the Act. Upon perusal of sub-section (1)of Section 131 of the Act, it is crystal clear that second respondentbeing Assessing Officer is authorized to issue the same. I amafraid, how and in what manner summon (Annex.3) is alsochallenged by the petitioner in the instant petition when the samehas already been annulled by the Court. Here, in the instantmatter, Court’s concern is to ascertain validity of impugnedsummon (Annex.6) only. It may also be pertinent to note herethat while quashing summon (Annex.3), the Court granted libertyto the respondents to take appropriate action against thepetitioner-assessee in accordance with law. Therefore, uponobjective analysis of the provision under sub-section (1) of Section131 of the Act, in my view, challenge laid to impugned summon(Annex.6) is not tenable. Moreover, the respondents, in theirreturn, have also made endeavour to canvass that foundation ofthe impugned summon is statements made by the proprietor ofpetitioner-assessee and she in her statements has admitted someof the facts, and therefore, the Assessing Officer by issuingsummon has made endeavour to unearth the truth and verifycertain facts. By any stretch of imagination, in the factual backdrop of thecase, it cannot be said that power exercised by the secondrespondent under sub-section (1) of Section 131 of the Act isunauthorized or for oblique purpose. Moreover, issuance of summons by itself cannot be construed as causing any prejudiceto the petitioner-assessee so as to invoke extraordinaryjurisdiction of this Court. The legal position is no more res-integra that writ petitionagainst show-cause notice is not maintainable unless it is shownthat same was issued without jurisdiction and without authority oflaw. It should be borne in mind that if there is no challenge to thevires of the statutory provisions governing the matter, obviously,there is no question of infringement of any fundamental right ofan aggrieved person. As observed supra, the summon issued to the assessee isneither totally unauthorized, nor wholly without jurisdiction; itwould not be appropriate for this Court to exercise jurisdictionunder Article 226 of the Constitution. It is trite that when anotice or summon is issued, the concerned noticee gets anopportunity to place his case before the concerned authority andusually there are elaborate procedures available by way of appealand/or revision against the order, which may be passed by theconcerned authority. In totality, the impugned action is undertaken by therespondents under a taxing statute by simply issuing summons tothe petitioner-assessee for which it is clothed with the jurisdictionunder the law, and therefore, the instant petition is premature andmerits rejection. Resultantly, the petition fails and same is, hereby, rejected. The stay petition also stands rejected. (P.K. LOHRA),J a.asopa/-