MOHD MIYAN V. ASSITANT COMMI OF INCOME TAX ORS

CW/16567/2015

AI Insights

The case involves Mohd Miyan, the petitioner, challenging a notice and subsequent order under Section 148 of the Income Tax Act, 1961, issued by the Income Tax authorities in Kota. The notice was based on a discrepancy between the sale consideration of a property, where Miyan was the power of attorney holder, and its market value as per the DLC rate. The petitioner argued that the notice was issued without jurisdiction as he was merely a power of attorney holder and not the actual owner. The respondents contended that the petitioner had shown himself as the owner in various legal documents, including a gift deed. The court dismissed the petition, emphasizing that the extraordinary jurisdiction under Article 226 of the Constitution was not applicable as the notice was not without jurisdiction.

• Counselvise Citation: [2017] 140 COUNSELVISE.COM (IT) 685019 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 19-09-2017
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax & Ors. Vs. Chhabil Dass Agarwal, Jeans Knit (P) Ltd. Vs. Deputy Commissioner of Income Tax & Ors., Calcutta Discount Co. Ltd. VS. ITO
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: ABHAY JAIN; PARINITOO JAIN
• Assessee Lawyers: PRAKUL KHURANA
• Keywords: Gift deed; Jurisdiction; Notice; Power of attorney; Sale deed
• Section: 148

Judgement Text

"HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR S.B. Civil Writ Petition No. 16567 / 2015 Mohd Miyan s/o Shri Nanneh Khan, aged about 63 years, R/o H.No.5-B-18, Vigyan Nagar, Kota – 324005. ----Petitioner Versus 1. Assistant Commissioner Of Income Tax, Circle – I, Kota. 2. Assistant Commissioner of Income Tax, Circle – II, Kota 3. Commissioner of Income Tax, Kota. ----Respondents _____________________________________________________ For Petitioner(s) : Mr.Prakul Khurana For Respondent(s) : Mr.Abhay Jain for Mrs.Parinitoo Jain _____________________________________________________ HON'BLE MR. JUSTICE M.N. BHANDARI Judgment 19/09/2017 By this writ petition, a challenge is made to the notice under Section 148 of the Income Tax Act, 1961 (for short “the Act of 1961”) dated 07th May, 2014 and order dated 08th September, 2015 passed by the respondent No.2. Learned counsel for the petitioner submits that notice under Section 148 of the Act of 1961 is without jurisdiction. The reasons recorded by the respondents are untenable and, otherwise, the authority acted without jurisdiction in causing notice and, subsequently, passing the order dated 08th September, 2015. The notice under Section 148 of the Act of 1961 disclosed sale of the land measuring 12 hectares of khasra NO.79 to Ku.Afsha Khan (minor) for sum of Rs.3,76,963/- (mentioned as Rs.3,67,963/- in the impugned notice), whereas, as per DLC rate, the value of the property was Rs.3,90,00,000/- (Rs.Three Crore and Ninety Lac only). (2 of 6) [CW-16567/2015] The notice aforesaid was caused by taking difference of the amount, but, ignoring the fact that the petitioner was shown to be power of attorney holder, hence, sale of the property could not have been accounted against him. If, at all, notice was to be given, it should have been against the land holder of the property. It is also submitted that once the petitioner was shown to be power of attorney holder, it could not have been substituted or modified, rather, the authorities were required to stick to the reason given under Section 148 of the Act of 1961. The sale consideration cannot be taken against the power of attorney. In view of the above, impugned order as well as the notice under Section 148 of the Act of 1961 deserves to be set aside. The respondents have acted without jurisdiction and authority apart from the fact that no reason to believe for causing notice under Section 148 of the Act of 1961 exists. Learned counsel for the respondent/s has contested the writ petition. The preliminary objection on maintainability of the writ petition has been raised. The petitioner is having alternative remedy to challenge the order dated 08th September, 2015, but, instead of availing it, this writ petition has been filed. A reference of the judgment of the Apex Court in the case of Commissioner of Income Tax & Ors. Vs. Chhabil Dass Agarwal reported in (2014) 1 SCC 603 has been given. It is further stated that notice under Section 148 of the Act of 1961 is not without jurisdiction, rather, has rightly been caused. The petitioner had been referred as power of attorney holder of the land in dispute, as it was shown in the sale deed, but, it was disclosed in the balance sheet of the petitioner towards assets. (3 of 6) [CW-16567/2015] While causing notice under Section 148 of the Act of 1961, it was referred in the same manner as was disclosed in the sale deed. A further reference of the gift deed executed by the petitioner has also been given. In the gift deed at Annexure - 5, the petitioner has shown himself to be owner of the property. It is not now open for the petitioner to say that property was not belonging to him, hence, it could not have been accounted against him for causing notice under Section 148 of the Act of 1961. The much emphasis has been led against use of words “power of attorney holder” in the notice under Section 148 of the Act of 1961 in ignorance of the fact that the words aforesaid were used taking it to be from the sale deed where consideration was shown much below the DLC rate. The authority could not have changed the words used in the sale deed, but, taking into consideration that the property has been disclosed in the balance sheet of the petitioner and even in the gift deed where he has shown himself to be landholder, notice was rightly caused. The prayer is accordingly made to dismiss the writ petition. I have considered the rival submissions made by learned counsel for the parties and perused the record. This writ petition has been filed to challenge the notice under Section 148 of the Act of 1961 and subsequent order dated 08th September, 2015. It is said to be without jurisdiction. The notice under Section 148 of the Act of 1961 makes a reference of power of attorney holder. The words “power of attorney holder” have been used taking it from the sale deed executed by the petitioner where the consideration shown is of Rs.3,76,963/- (mentioned as Rs.3,67,963/- in the impugned notice) as against the value of the property to be Rs.3,90,00,000/- on DLC rate, making (4 of 6) [CW-16567/2015] difference of Rs.3,86,23,037/-. The property aforesaid was shown to be asset of the petitioner in the balance sheet and he had executed the sale deed. If the petitioner is not the owner of the property then while executing the gift deed, why he had shown himself to be the owner. It is not such a case where reasons to believe recorded by the authority is without jurisdiction so as to invoke the extra ordinary jurisdiction of this Court. In the case of Chhabil Dass Agarwal (supra), the exercise of jurisdiction under Article 226 of the Constitution of India has not been excluded, but, when it can be exercised, has been elaborately discussed. Learned counsel for the petitioner has referred the subsequent judgment of the Apex Court in the case of Jeans Knit (P) Ltd. Vs. Deputy Commissioner of Income Tax & Ors. reported in (2017) 145 DTR (SC) 16. Therein, the earlier judgment in the case of Chhabil Dass Agarwal (supra) has been considered so as the judgment in the case of Calcutta Discount Co. Ltd. VS. ITO reported in (1961) 41 ITR 191 (SC). I have gone through the judgment of the Apex Court in the case of Calcutta Discount Co. Ltd.(supra) and find that exercise of extra ordinary jurisdiction under Article 226 of the Constitution of India can be if the notice or the order is without jurisdiction. The relevant para Nos.27 and 28 of the said judgment are quoted hereunder for ready reference : “27.Mr. Sastri next pointed out that at the stage when the Income-tax Officer issued the notices he was not acting judicially or quasi- judicially and so a writ of certiorari or prohibition cannot issue. It is well settled (5 of 6) [CW-16567/2015] however that though the writ of prohibition or certiorary will not issue against an executive authority, the High Courts have power to issue in a fit case an order prohibiting an executive authority from acting without jurisdiction. Where such action of an executive authority acting without jurisdiction subjects or is likely to subject a person to lengthy proceedings and unnecessary harassment, the High Courts, it is well settled, will issue appropriate orders or directions to prevent such consequences. 28.Mr. Sastri mentioned more than once the fact that the company would have sufficient opportunity to raise this question, viz., whether the Income-tax Officer had reason to believe that under assessment had resulted from non- disclosure of material facts, before the Income-tax Officer himself in the assessment proceedings and if unsuccessful there before the appellate officer or the appellate tribunal or in the High Court under Section 66(2) of the Indian Income-tax Act. The existence of such alternative remedy is not however always a sufficient reason for refusing a party quick relief by a writ or order prohibiting an authority acting without jurisdiction from continuing such action.” The judgment of the Apex Court in the case of Jeans Knit (P) Ltd. is in reference to the earlier judgment in the case of Calcutta Discount Co. Ltd.(supra), though, the judgment in the case of Chhabil Dass Agarwal (supra) has also been considered. If the facts of this case are considered, I do not find that notice is without (6 of 6) [CW-16567/2015] jurisdiction so as to exercise extra ordinary jurisdiction under Article 226 of the Constitution of India despite existence of alternative remedy. Even, I do not find a prima facie case on merit so as to cause interference in the impugned order, however, the finding recorded above is only a prima facie opinion and has been expressed to find out whether the notice as well as the order passed by the authority is without jurisdiction or not and would not be taken adverse if the petitioner avail the alternative remedy. In the light of the discussion made above, the writ petition is dismissed without causing interference in the impugned order as well as in the notice under Section 148 of the Act of 1961 given by the respondents. The petitioner would, however, be at liberty to take alternative remedy and, for that, any observation made in this order would not come in his way. (M.N. BHANDARI)J. Preeti, PA/218 "