Mahalaxmi Jewellers V. Union of India and Income Tax Officer, Ward-3(3), Jodhpur

CW/6112/2019

AI Insights

The case involves M/s. Mahalaxmi Jewellers, represented by its proprietor Smt. Santosh Soni, who filed a writ petition challenging the summons issued by the Income Tax Department. The petitioner contested the validity of the summons dated 1st March 2019 and 26th April 2019, claiming they were issued without authority. The court had previously quashed similar summons but allowed the Department to take appropriate action in accordance with the law. The Department defended the issuance of the new summons, asserting they were within legal bounds and necessary for verifying certain facts. The court, after considering the arguments and the legal provisions, upheld the validity of the summons and rejected the petition.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 802951 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 16-05-2019
• Assessment Year: misc
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: SUNIL BHANDARI
• Assessee Lawyers: SANDEEP BHANDAWAT; SHANKER SINGH
• Keywords: Assessment; Authority; Income Tax; Jurisdiction; Quashment; Summons; Survey; Writ petition
• Section: 131(1); 131(1A); 226; 272A(1); 133-A

Judgement Text

"HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR S.B. Civil Writ Petition No. 6112/2019 M/s. Mahalaxmi Jewellers, through its Proprietor Smt. Santosh Soni W/o Shri Rajendra Verma, aged 44 years, Resident of Sunaron Ka Bas, Ghoron Ka Chowk, Jodhpur. ----Petitioner Versus 1. Union of India, through the Principal Commissioner of Income Tax-2, Jodhpur. 2. Income Tax Officer, Ward-3(3), Jodhpur. ----Respondents For Petitioner(s) : Mr. Sandeep Bhandawat with Mr. Shanker Singh. For Respondent(s) : Mr. Sunil Bhandari. HON'BLE MR. JUSTICE P.K. LOHRA Order 16/05/2019 Petitioner-assessee, through its Proprietor Smt. Santosh Soni, has preferred this writ petition under Article 226 of the Constitution to assail summons dated 1st of March, 2019 (Annex.3) and 26th of April, 2019 (Annex.6), with a prayer to annul the same. Apart from that, the petitioner has also craved for quashment of consequential proceedings, undertaken by the respondent-Department, pursuant to impugned summons Annex.3 & 6 respectively. The facts, in brief, are that petitioner furnished its tax-return on 29th of October, 2018 for Assessment Year 2018-19 and, thereupon, as per return the income was accordingly assessed. (2 of 7) [CW-6112/2019] Petitioner has averred in the petition that although no proceeding was pending against it before any authority under the Income-tax Act, 1961 (for short, ‘Act’), yet a survey was carried at the business premises of the firm on 1st of March 2019 by resorting to Section 133(A) of the Act. It is further averred that during the course of survey, statements of Manager of the firm, i.e. petitioner’s husband, were recorded, which were concurred by the petitioner as proprietor of the firm. Some queries were also made and answers thereto were solicited from petitioner and then she was served summons dated 1st and 5th of March, 2019 (Annex.3 & 4) respectively under Section 131(1A) of the Act. As per version of the petitioner, impugned summons were issued by second respondent without any authority. Be that as it may, the petitioner challenged summons before this Court by filing Civil Writ Petition No.4585/2019, which came up for consideration before Court on 23rd of April 2019, and the Court, after hearing rival contentions, decided the same. Operative part of order dated 23rd of April, 2019, reads as under: “In this view of the matter, the writ petition is allowed 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 take appropriate action against petitioner-assessee in accordance with law.” Petitioner has further submitted that to camouflage mistake in issuing unauthroized summon, now summon (Annex.6) under Section 131(1) of the Act is issued on 26th of April, 2019, asking the petitioner to furnish books of account and/or other documents with a word of caution that failure would entail penalty under (3 of 7) [CW-6112/2019] Section 272A(1) of the Act. Summon (Annex.6) is challenged on various counts including non-fulfilment of conditions under Section 131(1) of the Act. Besides that, the summon (Annex.6) is also assailed on various grounds. On behalf of respondent-Department, reply to the writ petition is submitted. In the return, the respondent-Department has raised some preliminary objections and has stoutly defended its action in issuing summon (Annex.6). It is averred that the second respondent is authorized to issue said summon under sub- section (1) of Section 131 of the Act. The respondent has also asserted in the preliminary objection that the writ petition is premature, inasmuch as, second respondent has not passed any order but has simply solicited certain information from the assessee. Joining issue with the petitioner, the respondent- Department has raised the preliminary objection that instant case involves many disputed question of facts, and therefore, it would not be appropriate to exercise extraordinary jurisdiction under Article 226 of the Constitution. On merits also, it is stated by respondent-Department that the facts averred in para 3 to 7 and 14 of the writ petition are vague, cryptic and far from truth, and therefore, not worth any credence. It is also submitted in the return that proceedings and inquiry against the petitioner is in vogue and the same has not been concluded yet. Relying on the statements recorded under Section 133A(3)(iii)/131 of the Act, it is stated that during the course of survey various documents and information were not supplied by the petitioner and the proprietor of petitioner-firm also not corroborated the same and that necessitated issuance of summon under Section 131(1) of the Act. (4 of 7) [CW-6112/2019] The respondent-Department has also relied on the information divulged by the petitioner during inquiry, in response to Questions No.10, 13, 14, 16 and 17 put by the Department. The Department has also pleaded that second respondent has issued summon as per provisions of the Act and it is authorized to issue the same. Besides that, many other facts are incorporated in the reply to defend the action of respondent-Department. While referring to sub-section (3) of Section 133A of the Act, amended by Finance Act, 2002 w.e.f. 01.06.2002, inserting clause (ia), it is contended by the respondent-Department that questioning its action is wholly unfounded and if such contention is accepted, the same would render the said amendment otiose or nugatory. In the return, while highlighting powers of the authority under Section 131(1) of the Act, the respondent-Department has also pleaded that the powers vested under the said provision with the authority concerned are akin to powers of a Court under Code of Civil Procedure, 1908. In substance, the Department has defended its action with the prayer to thwart the petition of the petitioner-assesee. I have heard learned counsel for the parties and perused the materials available on record. The first and the foremost question, which has emerged for consideration, is validity of the summons issued to the assessee. At the outset, it may be observed that earlier summons were issued by second respondent to the petitioner under Section 131(1A) of the Act and the same was annulled by the Court while deciding Writ Petition No.4585/2019. The Court has found that (5 of 7) [CW-6112/2019] second respondent was neither authorized, nor having jurisdiction to issue summons, and therefore, it was quashed. Now, in the present matter, summon under challenge is under Section 131(1) of the Act. Upon perusal of sub-section (1) of Section 131 of the Act, it is crystal clear that second respondent being Assessing Officer is authorized to issue the same. I am afraid, how and in what manner summon (Annex.3) is also challenged by the petitioner in the instant petition when the same has already been annulled by the Court. Here, in the instant matter, Court’s concern is to ascertain validity of impugned summon (Annex.6) only. It may also be pertinent to note here that while quashing summon (Annex.3), the Court granted liberty to the respondents to take appropriate action against the petitioner-assessee in accordance with law. Therefore, upon objective analysis of the provision under sub-section (1) of Section 131 of the Act, in my view, challenge laid to impugned summon (Annex.6) is not tenable. Moreover, the respondents, in their return, have also made endeavour to canvass that foundation of the impugned summon is statements made by the proprietor of petitioner-assessee and she in her statements has admitted some of the facts, and therefore, the Assessing Officer by issuing summon has made endeavour to unearth the truth and verify certain facts. By any stretch of imagination, in the factual backdrop of the case, it cannot be said that power exercised by the second respondent under sub-section (1) of Section 131 of the Act is unauthorized or for oblique purpose. Moreover, issuance of (6 of 7) [CW-6112/2019] summons by itself cannot be construed as causing any prejudice to the petitioner-assessee so as to invoke extraordinary jurisdiction of this Court. The legal position is no more res-integra that writ petition against show-cause notice is not maintainable unless it is shown that same was issued without jurisdiction and without authority of law. It should be borne in mind that if there is no challenge to the vires of the statutory provisions governing the matter, obviously, there is no question of infringement of any fundamental right of an aggrieved person. As observed supra, the summon issued to the assessee is neither totally unauthorized, nor wholly without jurisdiction; it would not be appropriate for this Court to exercise jurisdiction under Article 226 of the Constitution. It is trite that when a notice or summon is issued, the concerned noticee gets an opportunity to place his case before the concerned authority and usually there are elaborate procedures available by way of appeal and/or revision against the order, which may be passed by the concerned authority. In totality, the impugned action is undertaken by the respondents under a taxing statute by simply issuing summons to the petitioner-assessee for which it is clothed with the jurisdiction under the law, and therefore, the instant petition is premature and merits rejection. (7 of 7) [CW-6112/2019] Resultantly, the petition fails and same is, hereby, rejected. The stay petition also stands rejected. (P.K. LOHRA),J a.asopa/- "