Surendra Pal Singh Sahni v. The Director General Of Income Tax (Investigation), C Rbuilding, Near Statue Circle, Bhagwan Das Road, Jaipur

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR S.B. Civil Writ Petition No.3421/2017 Surendra Pal Singh Sahni S/o Late Rajendra Singh, aged about 59years, resident of Ruber Factory Road, Rajendra Vila, KotaJunction, Kota (Rajasthan). ----Petitioner Versus 1. The Director General of Income Tax (Investigation), C RBuilding, near Statue Circle, Bhagwan Das Road, Jaipur. 2. The Assistant Commissioner of Income Tax, Central Circle Kota,Room No.212, Central Revenue Building, Rawatbhata Road, Kota(Rajasthan). ----Respondents _____________________________________________________ For Petitioner(s) :Mr. Suresh Sahni with Mr. R.M. Sharma For Respondent(s) : _____________________________________________________ HON'BLE MR. JUSTICE M.N. BHANDARIOrder 09/03/2017 By this writ petition, a direction is sought for quashing of thesearch proceedings under Section 132 of the Income Tax Act,1961 (for short “the Act of 1961”), Panchnama dated 30[th] June,2016 and consequential proceedings. Learned counsel submits that Income Declaration Scheme,2016 (for short “the Scheme of 2016”) was launched by therespondents which was between 1[st] June, 2016 till 30[th] September,2016. The assessee was given option to make disclosure duringthe intervening period and avail the benefit. The petitioner made disclosure but his case has not been considered under the Schemeof 2016, rather, his application was dismissed by the PrincipalCommissioner of Income Tax, Kota. The petitioner maintained a writ petition and is pending.During pendency of the writ petition, respondents are nowproceeding in pursuance of search and even notice under Section153A of the Act of 1961 has also been given. It is submitted that when beneficial scheme has beenlaunched and till it was available, the respondents were under anobligation not to effect Section 132 of the Act of 1961 during theintervening period. If at all any search is made under Section 132of the Act of 1961, it should not debar any person to take benefitof the Scheme 2016. If search comes in the way of the petitionerthen very purpose of the Scheme of 2016 gets frustrated andotherwise exclusion of the person to whom scheme would notapply, does not allow proceedings against those who have madedisclosure under the Scheme of 2016. In view of the above, thesearch proceedings against the petitioner deserve to be set aside. I have considered the submission made by learned counsel for petitioner and perused the record. The petitioner has made reference of the Scheme of 2016 toseek benefit and also to state that no proceedings under Section132 of the Act of 1961 followed by proceedings under Section153A of the Act of 1961 could have been initiated during thecurrency of the Scheme of 2016 between 1[st] June, 2016 till 30[th]September, 2016. The petitioner’s premises was searched on28[th]/30[th] June, 2016 which was during the currency of the scheme. I find that scheme itself makes reference for those on whom itwould not apply. The relevant Para 196 of the Scheme of 2016 is reproduced hereunder: 196. The provisions of this Scheme Shall not apply- (a) to any person in respect of whom an order of detention hasbeen made under the Conservation of Foreign Exchange andPrevention of Smuggling Activities Act, 1974 (52 of 1974): Provided that- (i) such order of detention, being an order to which theprovisions of section 9 or section 12A of the said Act do notapply, has not been revoked on the report of the AdvisoryBoard under section 8 of the said Act or before the receipt ofthe report of the Advisory Board; or (ii) such order of detention, being an order to which theprovisions of section 9 of the said Act apply, has not beenrevoked before the expiry of the time for, or on the basis of, thereview under sub-section (3) of section 9, or on the report ofthe Advisory Board under section 8, read with sub-section (2)of section 9 of the said Act; or (a) to any person in respect of whom an order of detention hasbeen made under the Conservation of Foreign Exchange andPrevention of Smuggling Activities Act, 1974 (52 of 1974): Provided that- (i) such order of detention, being an order to which theprovisions of section 9 or section 12A of the said Act do notapply, has not been revoked on the report of the AdvisoryBoard under section 8 of the said Act or before the receipt ofthe report of the Advisory Board; or (ii) such order of detention, being an order to which theprovisions of section 9 of the said Act apply, has not beenrevoked before the expiry of the time for, or on the basis of, thereview under sub-section (3) of section 9, or on the report ofthe Advisory Board under section 8, read with sub-section (2)of section 9 of the said Act; or (iii) such order of detention, being an order to which theprovisions of section 12A of the said Act apply, has not beenrevoked before the expiry of the time for, or on the basis of, thefirst review under sub-section (3) of that section, or on thebasis of the report of the Advisory Board under section 8, readwith sub-section (6) of section 12A, of the said Act; or (iv) such order of detention has not been set aside by acourt of competent jurisdiction; (b) in relation to prosecution for any offence punishable underChapter IX or Chapter XVII of the Indian Penal Code (45 of1860), the Narcotic Drugs and Psychotropic Substances Act,1985 (61 of 1985) the Unlawful Activities (Prevention) Act, 1967(37 of 1967) and the Prevention of Corruption Act, 1988 (49 of1988); (c) to any person notified under section 3 of the Special Court(Trial of Offences Relating to Transactions in Securities) Act,1992 (27 of 1992); (d) in relation to any undisclosed foreign income and assetwhich is chargeable to tax under the Black Money (UndisclosedForeign Income and Assets) and Imposition of Tax Act, 2015 (22of 2015); (e) in relation to any undisclosed income chargeable to taxunder the Income-tax Act for any previous year relevant to anassessment year prior to the assessment year beginning on the1[st] day of April, 2017- (i) where a notice under section 142 or sub-section (2) ofsection 143 or section 148 or section 153A or section 153C ofthe Income-tax Act has been issued in respect of suchassessment year and the proceeding is pending before theAssessing Officer; or (ii) Where a search has been conducted under section132 or requisition has been made under section 132A or asurvey has been carried out under section 133A of the Income-tax Act in a previous year and a notice under sub-section (2) ofsection 143 for the assessment year relevant to such previousyear or a notice under section 153A or under section 153C ofthe said Act for an assessment year relevant to any previousyear prior to such previous year has not been issued and thetime for issuance of such notice has not expired; or (iii) where any information has been received by thecompetent authority under an agreement entered into by theCentral Government under section 90 or section 90A of theIncome-tax Act in respect of such undisclosed asset.” The perusal of Clause (e) reveals that it would not apply inrelation to any undisclosed income chargeable to tax under theIncome Tax Act for any previous year relevant to an assessmentyear prior to 1[st] day of April, 2017 where search/proceedingsunder Section 132 and 132A of the Act of 1961 have beenundertaken. It would not apply even on a notice under Section153A apart from many other provisions. In the instant case,search proceedings were conducted on 30[th] June, 2016 and it wasduring the currency of the Scheme of 2016. Till search was (iii) where any information has been received by thecompetent authority under an agreement entered into by theCentral Government under section 90 or section 90A of theIncome-tax Act in respect of such undisclosed asset.” The perusal of Clause (e) reveals that it would not apply inrelation to any undisclosed income chargeable to tax under theIncome Tax Act for any previous year relevant to an assessmentyear prior to 1[st] day of April, 2017 where search/proceedingsunder Section 132 and 132A of the Act of 1961 have beenundertaken. It would not apply even on a notice under Section153A apart from many other provisions. In the instant case,search proceedings were conducted on 30[th] June, 2016 and it wasduring the currency of the Scheme of 2016. Till search was conducted under Section 132 of the Act of 1961, the petitioner didnot make disclosure/declaration under the Scheme of 2016. It issubsequent to the search proceedings under Section 132 of theAct of 1961. As per para quoted above, the petitioner is notentitled to seek benefit of the Scheme of 2016. The position wouldhave been different if declaration under the Scheme of 2016 wouldhave been made earlier to proceedings under Section 132 of theAct of 1961. It is not that relevant provisions of the Income TaxAct were kept in abeyance during currency of the Scheme of 2016,rather, there exists no provision under the scheme and otherwisescheme cannot override provisions of law so as to keep it inabeyance. Taking into consideration the aforesaid, I do not find anyground to cause interference in the search and subsequentproceedings. The writ petition is, accordingly, dismissed. (M.N. BHANDARI)J. FRBOHRA