G.Venkateswar Rao V. The Assistant Commissioner of Income Tax

WP/10956/2002

AI Insights

The case involves G. Venkateswar Rao, the petitioner, who challenged a notice issued by the Assistant Commissioner of Income Tax under Section 158BC of the Income Tax Act, 1961. The notice was based on findings from a search conducted at the petitioner's father's house, which allegedly revealed discrepancies in the cost of construction of a building disclosed by the petitioner. The petitioner argued that the notice was unjustified as no direct search was conducted at his residence and contested the valuation provided by the respondent. The court dismissed the writ petition, noting that the petitioner could contest the notice and its implications through the appropriate legal channels provided under the Income Tax Act, rather than through a writ petition.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 691779 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 20-08-2014
• Assessment Year: misc
• Other Referred Cases: Manish Maheshwari vs. Asst. Commissioner of Income-Tax, Commissioner of Income-Tax vs. Tirupati Oil Corporation
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: J PRASAD
• Assessee Lawyers: Y RATNAKAR
• Keywords: Block period assessment; Cost of construction; Search and seizure; Valuation Officer; Writ petition
• Section: 158BC; 158BD; 260-A; 158B

Judgement Text

"*THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY AND *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 0341 2. (2005) 248 ITR 198 THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY AND THE HON’BLE SRI JUSTICE CHALLA KODANDA RAM W.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 the assessment year 1999-2000, he has shown the cost of the building constructed by him at Rs.30,45,318/-. A search was conducted on 05.09.2000 in the house of the father of the petitioner. Based upon the discoveries said to have been made during the search, the respondent opined that the cost of the construction of the house of the petitioner is much more than what was disclosed. The matter was forwarded to the Valuation Officer, who in turn has estimated the cost of construction at Rs.1,14,00,000/-. The respondent issued a show cause notice, dated 06.12.2000 to the petitioner in exercise of power under Section 158BC of the Act, requiring him to file the block period assessment under Section 158B of the Act. The said notice is challenged in this writ petition. The petitioner submits that no search as such was conducted in his house and there was no basis for the respondent to issue the impugned notice, by referring to the search said to have been made in the house of his father. He pleads that block assessment was submitted in response to the impugned notice, but under protest. As regards the value indicated by the respondent, the petitioner submits that he got the structure estimated by a registered Valuer by name Subbarow Gupta and through his report, dated 27.12.2000, the said Valuer estimated the cost at Rs.74,54,000/-. Stating these and other relevant facts, the petitioner submits that the impugned notice cannot be sustained in law. The respondent filed a detailed counter affidavit. According to him, a notice was issued in exercise of power under Section 158BD of the Act and the petitioner can put forward all his contentions in the proceedings that ensue under the Act. On merits also, an attempt was made to contradict the facts pleaded by the petitioner. The petitioner filed an additional affidavit contradicting the contents of the counter affidavit. Heard Sri Y.Ratnakar, learned counsel for the petitioner and Sri J.V.Prasad, learned counsel for the respondent. It is too well known that the Act is a self-contained code and it provides for hierarchy of remedies in the form of appeal, further appeal to the Tribunal and independent appeal to the High Court under Section 260-A of the Act and so on. The concerned authorities are conferred with wide powers not only to decide the case on facts but also to express their view on questions of law, may be guided by the precedents handed out by the Constitutional Courts. . The occasion to interfere with the proceedings under the Act in a writ petition under Article 226 of the Constitution of India would arise, if only the notice is issued or the order is passed by an authority, who is not conferred with the jurisdiction under the Act. In the instant case, what is challenged is a notice requiring the petitioner to file a block return. As a matter of fact, the petitioner filed such a return with his own effort to contradict the facts alleged against him on the basis of the search. The mere fact that it is filed under protest does not make much of difference. The contentions advanced before this Court are two fold viz., that the impugned notice could not have been issued, when there was no search in the house of the petitioner and that the respondent ought to have recorded satisfaction before issuing notice. As regards the first contention, the respondent states that the notice was issued by invoking the power under Section 158BD of the Act. A perusal of that provision discloses that it is intended only to deal with the situations, where the search made in the premises of one assessee has led to suspicion, as regards accuracy of the facts and figures with reference to another assessee. Alternatively, it was also pleaded that the search was conducted in the premises of the petitioner also. These are the matters, which can be dealt with before the concerned Forum under the Act. When the disputed questions are involved and when it is not even alleged that the respondent is not conferred with the power to issue notice, the writ petition cannot be maintained. The second ground viz., that the satisfaction was not recorded, can also be urged in the regular proceedings under the Act. The petitioner can certainly insist on compliance with that, as required under law before the assessing authority or in the 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 High Court in Commissioner of Income-Tax vs. Tirupati Oil Corporation[2] in support of his contentions. A perusal of those judgments discloses that they arose out of the regular appeals preferred under Section 260-A of the Act before the High Court and other proceedings under the Act before the concerned authority earlier thereto. Hence, the writ petition is dismissed, leaving it open to the petitioner to urge all the contentions that are open to him in law before the respondent and other authorities. The miscellaneous petition filed in this writ petition shall also stand disposed of. There shall be no order as to costs. ____________________ L.NARASIMHA REDDY, J ______________________ CHALLA KODANDA RAM, J Date: 20.08.2014 Note: L.R.Copy to be marked. JSU THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY AND THE HON’BLE SRI JUSTICE CHALLA KODANDA RAM W.P.No.10956 of 2002 Date: 20.08.2014 JSU [1] (2007) 289 ITR 0341 [2] (2005) 248 ITR 198 "