RAJOO ENGINEERS LIMITED V. ASSISTANT COMMISSIONER OF INCOME TAX

SCA/13435/2021

AI Insights

Rajoo Engineers Limited filed a petition under Article 226 of the Constitution of India challenging notices issued by the Assistant Commissioner of Income Tax under Section 153(C) of the Income Tax Act, 1961. The notices required the petitioner to furnish returns of income for the assessment years 2013-2014 to 2018-2019, based on incriminating material found during a search and seizure operation at M/s. Star Alliances. The petitioner argued that the notices were arbitrary, illegal, and lacked jurisdictional validity. After hearing the arguments, the court was disinclined to show indulgence, leading the petitioner to withdraw the petition.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 766350 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 21-09-2021
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: B S SOPARKAR
• Keywords: Assessment years; Income Tax; Jurisdictional infirmity; Legal Challenge; Notices; Search and seizure
• Section: 132; 132(4); 131(1A); 153 C

Judgement Text

"C/SCA/13435/2021 ORDER DATED: 21/09/2021 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 13435 of 2021 ========================================================== RAJOO ENGINEERS LIMITED Versus ASSISTANT COMMISSIONER OF INCOME TAX ========================================================== Appearance: MR B S SOPARKAR(6851) for the Petitioner(s) No. 1 for the Respondent(s) No. 1 ========================================================== CORAM: HONOURABLE MS. JUSTICE SONIA GOKANI and HONOURABLE MR. JUSTICE RAJENDRA M. SAREEN Date : 21/09/2021 ORAL ORDER (PER : HONOURABLE MS. JUSTICE SONIA GOKANI) 1. By way of the present petition under Article 226 of the Constitution of India, the petitioner is seeking to challenge the legality, validity and propriety of the notices issued by the respondent dated 29.09.2020 under Section 153(C) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) directing the petitioner to furnish the return of income for the assessment years 2013-2014 to 2018-2019. On the ground that the notices issued are manifestly arbitrary, illegal and suffers from the jurisdictional infirmity that the petitioner is before this Court with the following prayers: - “(a) Quash and set aside the impugned notices at Annexure-A1 to A6 as well as the order disposing off the objections at Annexure-F to this petition; Page 1 of 5 C/SCA/13435/2021 ORDER DATED: 21/09/2021 (b) pending the admission, hearing and final disposal of this petition, to stay implementation and operation of the notices at Annexure-A1 to A6 to this petition and stay further proceedings for assessment for A.Y. 2013-14 to A.Y. 2018-19; (c) any other and further relief deemed just and proper be granted in the interest of justice; (d) to provide for the cost of this petition.” 2. The petitioner is a company incorporated under the provisions of Companies Act, 1956. The search and seizure actions under Section 132 were undertaken by the Income Tax Department in case of one M/s. Star Alliances on 26.09.2018 which is an entity based at Rajkot. Pursuant to the said search, various incriminating material had been found and impounded. A pen drive was discovered and seized from the residence of the accountant - Shri Himanshu Raiyani of M/s. Star Alliance. This was a pen drive maintained in a software Miracle and the same belonged to Decora Group, according to Shri Raiyani. The digital data seized reflected huge cash inflows in form of advances towards booking of the units in a commercial project Om Decora Nine Square. 2.1. It is further averred that the consideration received in the form of advances to the tune of Rs. 78,85,77,200/- and such other sums had been attributed to the different parties Page 2 of 5 C/SCA/13435/2021 ORDER DATED: 21/09/2021 who have paid earnest monies against the booking of the units in the said commercial projects. 2.2. The statement of Shri Raiyani was recorded under Section 132(4) of the Act where he disclosed that the old data pertaining to the details of cash is recorded by way of parallel entries of receipt of consideration in cash. The backup of the said data also had been taken by him on instructions given by Mr. Nikhil Patel, accountant. The statement of Mr. Patel also had been recorded on 06.03.2019 under Section 131(1A) wherein he has stated that as a matter of practice, certain receipts were recorded as off book transactions and they were not recorded in the regular course of business. The list of persons in the statement of Mr. Patel is in the form of Balance Sheets where the names of the parties to whom the units were allocated had been reflected and the corresponding cash paid by them also were found. 2.3. The respondent suspected one Raju Engineering and it is suspected that he has booked a unit being A-504 against the cash consideration of Rs. 1,10,30,000/-. The statement providing the breakup of payment of the said amount on different dates also is provided. 2.4. The notices came to be issued under Section 153(C) Page 3 of 5 C/SCA/13435/2021 ORDER DATED: 21/09/2021 directing the petitioner to file return of income for the assessment years 2013-2014 to 2018-2019. The petitioner filed the return of income and requested the respondent to afford the satisfaction recorded for issuance of the said notices. The two satisfaction notes, one recorded by the Assessing Officer of the searched person dated 15.10.2019 and another recorded by the Assessing Officer of the petitioner dated 21.09.2020 had been furnished. 2.5. The petitioner raised various objections and communicated the same on 08.07.2021. The respondent disposed of the said objection on 19.08.2021 and sought to proceed further against the petitioner under the provision of Section 153(C) of the Act. 2.6. This has been challenged essentially on three counts by the petitioner that the officer who has issued notice under Section 153(C) for the searched person when has provided the material to the officer, within whose jurisdiction the assessment of the petitioner would fall, has not recorded the satisfaction. Secondly, there is a change of the name which itself is a reason not to proceed against the petitioner and thirdly the six assessment years which have been reflected in the notice is impermissible relying on the decision of the Apex Page 4 of 5 C/SCA/13435/2021 ORDER DATED: 21/09/2021 Court. 3. We have heard learned advocate Mr.Soparkar appearing for the petitioner who has taken us through the material which has been placed on record and also the provision of law and the authorities on the subject. 4. When the Court was disinclined to show indulgence, learned advocate Mr. Soparkar has, on instructions, sought withdrawal of this petition. 5. Keeping the rights of the parties open to raise all the issues which have been raised before this Court to be determined by the appropriate authority, this petition is disposed of as withdrawn as dismissed without entering into the merits of the matter. (SONIA GOKANI, J) (RAJENDRA M. SAREEN,J) Bhoomi Page 5 of 5 "