P.Durga Prasad V. The Chief Vigilance Commissioner, Income Tax Department, New Delhi and two others

WP/25838/2007

AI Insights

The case involves a petitioner, P. Durga Prasad, who accused the third respondent of fabricating income tax returns for the assessment years 1999-2000 to 2001-2002. The petitioner sought action from the Chief Vigilance Commissioner and the Income Tax Department, alleging that the third respondent, after receiving an advance for property purchase, did not report this income correctly in his tax returns and instead filed a suit claiming the advance was a hand loan. The court found that there was no provision in the Income Tax Act to mandate an enquiry by the respondents into the third respondent's returns and suggested that the matter be resolved in the civil court where a related suit was pending.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 681553 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 09-06-2010
• Assessment Year: misc
• Other Referred Cases: OS No. 542 of 2001, CRP No. 4702 of 2002
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Keywords: Civil court; Income Tax Returns; Legal dispute; Fabricated income tax returns; Thorough enquiry
• Section: 138

Judgement Text

"IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE NINETH DAY OF JUNE TWO THOUSAND AND TEN PRESENT THE HON'BLE MRS. JUSTICE T.MEENA KUMARI AND THE HON'BLE MR JUSTICE NOOTY RAMAMOHANA RAO WRIT PETITION NO : 25838 OF 2007 Between: P.Durga Prasad ..... PETITIONER AND The Chief Vigilance Commissioner, Income Tax Department, New Delhi and two others .....RESPONDENTS The Court made the following : ORAL ORDER: (per THE HON’BLE MRS. JUSTICE T.MEENA KUMARI) The petitioner questions inaction on the part of the second respondent in not taking any action against the third respondent in pursuance of his representations dated 8.3.2006 and 17.5.2006 for fabricating the income tax returns for the assessment years 1999-2000 to 2001-2002 filed by the third respondent and to consequently direct the first and second respondents to conduct thorough enquiry on the above representations. It is case of the petitioner that the third respondent, after several deliberations, hass agreed to purchase one of his properties and has paid a sum of Rs.50.00 lakhs as advance on various dates and on advice, he has not shown the said amount in his income tax returns inasmuch as the same is only an advance and he was intending to show the same as and when regular sale deed is executed in favour of the third respondent, but the third respondent has shown the said sum in his income tax returns. It is further stated that contrary to the said understanding, the third respondent has filed suit OS No. 542 of 2001 before the XI Chief Judge, City Civil Court, Hyderabad against the petitioner for recovery of the said sum with interest as if the third respondent had given hand loan to the petitioner. To disprove the claims made by the third respondent in the suit, the petitioner filed representations to the second respondent for furnishing certified copies of the income tax returns of the third respondent for the assessment years 1999-2000 to 2001-2002 so as to file the same before the trial court. Since the second respondent has not furnished the certified copies sought for by the petitioner, he filed I.A. No. 174 of 2002 in OS No. 542 of 2001 for summoning the above returns of the third respondent, which was allowed by the trial court on 26.9.2002. Aggrieved thereby, the third respondent preferred CRP No. 4702 of 2002 and obtained stay and in the meanwhile, the third respondent tampered with the income tax returns, sought to be summoned, by inserting new sheets in place of the old one and thus fabricated the returns in collusion with some of the officials of the second respondent and thereafter withdrew the C.R.P. It is further stated that the arbitration proceedings ended in compromise which, however, failed due to the inaction of the third respondent in complying the terms. The original income tax returns were marked as Exs.35 to 37 on behalf of the petitioner and the fabricated income tax returns were marked as Exs. R-13 to 15 on behalf of the third respondent before the Arbitrator. It is the case of the petitioner that the income tax returns submitted by the third respondent were fabricated with the help of some of the officials of the second respondent and, as such, it is just and necessary to conduct investigation by the first and second respondents, as to how the second respondent did not demand the tax on the interest component, if the amount shown in the returns is a hand loan. Therefore, sought for an enquiry. Heard the learned counsel for the petitioner and the learned Special Standing Counsel for Income Tax for the learned counsel appearing for the third respondent. It is the contention of the learned counsel for the petitioner that the income tax returns submitted by the third respondent for the assessment years 1999-2000 to 2001-2002 before the second respondent were fabricated subsequently with the help of some of the officials of the second respondent after obtaining orders of stay in Civil Revision Petition No.4702 of 2002 and, as such, to disprove the claim of the third respondent that he has lent him a sum of Rs.50.00 lakhs as hand loan, he submitted representations dated 8.3.2006 and 17.5.2006 to cause enquiry, but the respondents 1 and 2 have not acted in the way they ought to have and, therefore, the present writ petition is filed seeking a direction to the respondents 1 and 2 to conduct a thorough enquiry on the returns submitted by the third respondent. Per contra, it is contended by the learned counsel appearing for the third respondent that since assessments have been revised by the respondent officials, he was directed to pay penalty and the same has been the subject matter of appeal before the concerned authorities. Learned counsel has further contended that the issue involved in the writ petition is purely a private dispute between the petitioner and the third respondent and the rights of the respective parties have to be adjudicated before the civil court in suit OS No.542 of 2001 pending before the civil court and not in the writ proceedings. Admittedly, there is no provision as such in the Income Tax Act to direct either the first or the second respondent to conduct enquiry into the returns submitted by the third respondent. The only provision available under the Income Tax Act enabling the petitioner to secure information about the third respondent seems to be Sec.138, which authorises the officials, in public interest, to furnish information relating to any assessee. Clause (b) of Sub-Sec. (1) of Sec.138 states that where a person makes an application in the prescribed form, the Chief Commissioner or the Commissioner is authorised to furnish the information about the assessee and such a decision of the Commissioner or Chief Commissioner is final and shall not be called in question in any court of law. In this case, it is the petitioner who has sought the enquiry to be conducted with reference to the returns filed by the third respondent. Hence we are of the considered opinion that the application itself is not maintainable and, as such, the contention of the learned counsel for the petitioner cannot be acceded to. We, however, make it clear that the parties are at liberty to agitate their rights in the suit filed by the third respondent before the Civil Court. With the above observation, the writ petition fails and is accordingly dismissed. No order as to costs. ____________________ Justice T.Meena Kumari __________________________ Justice Nooty Ramamohana Rao June 9, 2010 MAS "