Wp/10956/2002 Of G. Venkateswar Rao v. The Assistant Commissioner Of Income-Tax

*THE HON’BLE SRI JUSTICE L.NARASIMHA REDDYAND *THE HON’BLE SRI JUSTICE CHALLA KODANDA RAM+W.P.No.10956 of 2002 % Dated 20.08.2014 G.Venkateswar Rao. ….Petitioner $ The Assistant Commissioner of Income Tax ….Respondent ! Counsel for the petitioner : Sri Y.Ratnakar^ Counsel for respondents : Sri J.V.Prasad < GIST: > HEAD NOTE: ? Cases referred:1. (2007) 289 ITR 03412. (2005) 248 ITR 198 THE HON’BLE SRI JUSTICE L.NARASIMHA REDDYAND THE HON’BLE SRI JUSTICE CHALLA KODANDA RAMW.P.No.10956 of 2002 ORDER: (Per LNR,J) The petitioner is an assessee under the Income Tax Act,1961 (for short ‘the Act’). In the returns submitted for theassessment year 1999-2000, he has shown the costof the building constructed by him at Rs.30,45,318/-. A searchwas conducted on 05.09.2000 in the house of the father of the petitioner. Based upon the discoveries said to have been madeduring the search, the respondent opined that the cost of theconstruction of the house of the petitioner is much more thanwhat was disclosed. The matter was forwarded to the ValuationOfficer, who in turn has estimated the cost of construction atRs.1,14,00,000/-. The respondent issued a show cause notice, dated06.12.2000 to the petitioner in exercise of power under Section158BC of the Act, requiring him to file the block periodassessment under Section 158B of the Act. The said notice ischallenged in this writ petition. The petitioner submits that no search as such wasconducted in his house and there was no basis for therespondent to issue the impugned notice, by referring to thesearch said to have been made in the house of his father. Hepleads that block assessment was submitted in response to theimpugned notice, but under protest. As regards the valueindicated by the respondent, the petitioner submits that he gotthe structure estimated by a registered Valuer by nameSubbarow Gupta and through his report, dated 27.12.2000, thesaid Valuer estimated the cost at Rs.74,54,000/-. Stating theseand other relevant facts, the petitioner submits that the impugnednotice cannot be sustained in law. The respondent filed a detailed counter affidavit. According to him, a notice was issued in exercise of power underSection 158BD of the Act and the petitioner can put forward allhis contentions in the proceedings that ensue under the Act. Onmerits also, an attempt was made to contradict the facts pleadedby the petitioner. The petitioner filed an additional affidavit contradicting thecontents of the counter affidavit. Heard Sri Y.Ratnakar, learned counsel for the petitionerand Sri J.V.Prasad, learned counsel for the respondent. It is too well known that the Act is a self-contained codeand it provides for hierarchy of remedies in the form of appeal,further appeal to the Tribunal and independent appeal to theHigh Court under Section 260-A of the Act and so on. The concerned authorities are conferred with wide powers not only todecide the case on facts but also to express their view onquestions of law, may be guided by the precedents handed outby the Constitutional Courts. . The occasion to interfere withthe proceedings under the Act in a writ petition under Article 226of the Constitution of India would arise, if only the notice is issuedor the order is passed by an authority, who is not conferred withthe jurisdiction under the Act. In the instant case, what ischallenged is a notice requiring the petitioner to file a blockreturn. As a matter of fact, the petitioner filed such a return withhis own effort to contradict the facts alleged against him on thebasis of the search. The mere fact that it is filed under protestdoes not make much of difference. The contentions advanced before this Court are two foldviz., that the impugned notice could not have been issued, whenthere was no search in the house of the petitioner and that therespondent ought to have recorded satisfaction before issuingnotice. The contentions advanced before this Court are two foldviz., that the impugned notice could not have been issued, whenthere was no search in the house of the petitioner and that therespondent ought to have recorded satisfaction before issuingnotice. As regards the first contention, the respondent states thatthe notice was issued by invoking the power under Section158BD of the Act. A perusal of that provision discloses that it isintended only to deal with the situations, where the search madein the premises of one assessee has led to suspicion, as regardsaccuracy of the facts and figures with reference to anotherassessee. Alternatively, it was also pleaded that the search wasconducted in the premises of the petitioner also. These are thematters, which can be dealt with before the concerned Forumunder the Act. When the disputed questions are involved andwhen it is not even alleged that the respondent is not conferredwith the power to issue notice, the writ petition cannot bemaintained. The second ground viz., that the satisfaction was notrecorded, can also be urged in the regular proceedings underthe Act. The petitioner can certainly insist on compliance withthat, as required under law before the assessing authority or inthe appeal or in the further appeal. Learned counsel for the petitioner relied upon a judgment of the Hon’ble Supreme Court in Manish Maheshwari vs. Asst.Commissioner of Income-Tax[[1]]and that of the Bombay HighCourt in Commissioner of Income-Tax vs. Tirupati OilCorporation[[2]]in support of his contentions. A perusal of thosejudgments discloses that they arose out of the regular appealspreferred under Section 260-A of the Act before the High Courtand other proceedings under the Act before the concernedauthority earlier thereto. Hence, the writ petition is dismissed, leaving it open to thepetitioner to urge all the contentions that are open to him in lawbefore the respondent and other authorities. The miscellaneous petition filed in this writ petition shallalso stand disposed of. There shall be no order as to costs. ____________________ L.NARASIMHA REDDY, J ______________________ CHALLA KODANDA RAM, J Date: 20.08.2014Note: L.R.Copy to be marked.JSU THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY AND THE HON’BLE SRI JUSTICE CHALLA KODANDA RAM JSU [1](2007) 289 ITR 0341 [2](2005) 248 ITR 198 W.P.No.10956 of 2002 Date: 20.08.2014