Wp/18074/2005 Of P.venkateshwar Rao v. The Deputy Commissioner Of Income Tax

THE HON’BLE MR. JUSTICE B. SUDERSHAN REDDY AND THE HON’BLE MR. JUSTICE S. ANANDA REDDY WRIT PETITION NO. 18074 OF 2005 DATED: 20-09-2005 Between P. Venkateshwar Rao,S/o P. Rama Rao,Aged 40 years, Agriculturist,R/o. Plot No. 211,Padmavathi Colony,Near Rly. Station, Nalgonda.…………… PETITIONER And 1. The Deputy Commissioner of Income Tax,Circle 9(1), Hyderabad and others. ……………… RESPONDENTS THE HON’BLE MR. JUSTICE B. SUDERSHAN REDDY AND THE HON’BLE MR. JUSTICE S. ANANDA REDDY WRIT PETITION NO. 18074 OF 2005 ORDER:(per Sri B. Sudershan Reddy, J) The petitioner invokes the extraordinary jurisdiction of this Court under Article 226 ofthe Constitution of India with a prayer to issue a writ of Mandamus declaring theproceedings initiated by respondents 1 and 2 under Section 132 of the Income TaxAct, 1961 (for short ‘the Act’) as illegal, bad and without jurisdiction. The petitioneralso prays for a consequential direction to set aside the notice issued by the 1[st]respondent dated 01-06-2005 under Section 153A of the Act for the assessmentyears 2000-01 to 2005-06 and further direct the 1[st] respondent to permit the 3[rd]respondent – Bank to return the amounts after cancelling the demand drafts. We do not propose to refer the facts in extenso and deal with various contentionsurged by the learned counsel for the petitioner touching upon the merits of the casesince any observation by this Court at this stage of the proceedings may causeavoidable prejudice to both the Department as well as the petitioner. In order to satisfy ourselves that the proceedings under Section 132 of the Act havebeen properly initiated against the petitioners herein, we have required the learnedsenior counsel appearing for the Revenue to produce the record. We have perusedthe satisfactory note. The satisfactory note inter alia reveals that on specificinformation, the DDIT (Investigation) had undertaken investigation in the cases ofapplicants to IL 25 under the proposed new excise policy of the Andhra PradeshState Government. That in the process, it has come to the knowledge thatsubstantial unaccounted money has been used. The required information has beengathered that the petitioner has purchased as many as 26 demand drafts worthRs.27.05 Lakhs from Nagarjuna Grameena Bank, Nalgonda without any bankaccount. The petitioner is not assessed to tax. It is under those circumstances, theDDIT arrived at the conclusion that the petitioner has purchased all the 26 demanddrafts unaccounted. That is the basis on which the further proceedings wereinitiated. The Commissioner of Income Tax – VI, Hyderabad based on the materialavailable found that prima facie the demand drafts represent unaccounted amountinvested in the purchase of the drafts and the details of such income is not likely tobe disclosed if notices were issued under Section 131 or 142(1) of the Act and theassets are unlikely to be produced if notices were issued under Section 131 of theAct. It is for that reason the Commissioner arrived at the prima facie conclusion that itis a fit case for invoking the provisions under Section 132A of the Act to seize theamount covered by the demand drafts. The prima facie satisfaction arrived at by the authorities is in accordance with law.This Court in exercise of its jurisdiction under Article 226 of the Constitution of Indiadoes not exercise any appellate jurisdiction and at this stage, it would not beappropriate to make any further detailed enquiry. We are satisfied that therespondents had definite reason to believe that it is a fit case for invoking thejurisdiction under Section 132 of the Act. For the aforesaid reasons, we find no merit in this writ petition and the same shallaccordingly stand dismissed. The prima facie satisfaction arrived at by the authorities is in accordance with law.This Court in exercise of its jurisdiction under Article 226 of the Constitution of Indiadoes not exercise any appellate jurisdiction and at this stage, it would not beappropriate to make any further detailed enquiry. We are satisfied that therespondents had definite reason to believe that it is a fit case for invoking thejurisdiction under Section 132 of the Act. For the aforesaid reasons, we find no merit in this writ petition and the same shallaccordingly stand dismissed. However, this order shall not preclude the petitioner to file a proper applicationunder proviso to Section 132B of the Act and if any such application is made, thesame shall be considered by the respondents in accordance with law, uninfluencedby the observations if any made in this order. (B. Sudershan Reddy, J) 20..09..2005 (S. Ananda Reddy, J) ks