Surendra Pal Singh Sahni V. Union Of India, Through Principal Commissioner Of Income Tax (Central), Rajasthan and Additional Commissioner Of Income Tax, Central Range, Udaipur and Deputy Commissioner Of Income Tax, Central Circle, Kota and Acit, Central Circle, Revenue Building, Cad Circle, Kota

CW/8968/2021

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The case involves Surendra Pal Singh Sahni, the petitioner, who challenged the order of the Additional Commissioner of Income Tax, Central Range, Udaipur, which denied him access to the appraisal reports for the assessment years 2014-15 to 2017-18. These reports were prepared following a search and seizure operation conducted on the petitioner. The petitioner argued that the denial of the appraisal report was unjustified and hindered transparency in the assessment process. The respondents, representing the Income Tax Department, contended that the appraisal report is part of an internal procedure and not a statutory provision, thus not required to be shared with the assessee. The court examined the provisions of the Income Tax Act, particularly Section 153A, and the search and seizure manual, ultimately deciding in favor of the respondents.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 699627 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 19-08-2021
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: SURESH SAHNI
• Keywords: Appraisal report; Assessment Officer; Search and seizure; Transparency; Writ petition; Income undisclosed
• Section: 153A

Judgement Text

"HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR S.B. Civil Writ Petition No. 8968/2021 Surendra Pal Singh Sahni S/o Late Rajendra Singh, Aged About 63 Years, Resident Of Ruber Factory Road, Rajendra Vila, Kota Junction, Kota (Rajasthan) ----Petitioner Versus 1. Union Of India, Through Principal Commissioner Of Income Tax (Central), Rajasthan, Room No. 402, Ivth Floor, Jeevan Nidhi-Ii, Bhawani Singh Road, Ambedkar Circle, Jaipur-302005. 2. Additional Commissioner Of Income Tax, Central Range, Udaipur, Second Floor, Moomal Tower, 16, Saheli Marg, Udaipur (Rajasthan) 3. Deputy Commissioner Of Income Tax, Central Circle, Kota (Rajasthan) 4. Acit, Central Circle, Revenue Building, Cad Circle, Kota. ----Respondents For Petitioner(s) : Mr. Suresh Kumar Sahni For Respondent(s) : HON'BLE MR. JUSTICE SANJEEV PRAKASH SHARMA Order 19/08/2021 The petitioner by way of the writ petition has prayed to set aside the order dated 29.07.2021, passed by the Additional Commissioner of Income Tax, Central Range, Udaipur, and has further prayed that the respondent Nos. 1 and 2 be directed to supply the copy of the appraisal reports relating to the assessment years, 2014-15 to 2017-18, to the petitioner. Learned counsel submits that after the search and seizure was conducted, Income Tax Officers have prepared an appraisal (2 of 4) [CW-8968/2021] report to generally assess the income which is alleged to have remained undisclosed. In order to maintain transparency, the said assessment done by way of appraisal report ought to be made available to the assessee so that at the time of assessment by the Assessment Officer under section 153A of the Income Tax Act, an independent assessment may be done with application of mind and it may not be a mere repetition of what has already been prepared under the appraisal report. Learned counsel submits that the denial of copy of the appraisal report on the basis of search and seizure manual, Para 6.40 as mentioned in the impugned order dated 22.07.2021 is unjustified as the said Para of search and seizure manual cannot be said to be a statutory provision and merely on the basis of internal procedure, the copy of appraisal report cannot be denied. Since it is not a coded law, it cannot have a statutory force and denial is wholly illegal. I have considered the submissions. After a search and seizure is conducted, the assessment or reassessment as the case may be, made by the Assessing Officer by including the income which is found to be undisclosed and for that purpose, as per Section 153A of the Act, the assessee is issued a notice, requiring him to furnish such period, as may be specified in the notice, the return of income in respect of each assessment year and thereafter assessment or reassessment of the total income of six assessment years immediately preceding the assessment relevant to the previous year in which such search is conducted, is made. So far as the preparation of appraisal report is concerned, the same is part of the search and seizure manual as quoted in (3 of 4) [CW-8968/2021] the impugned order dated 22.07.2021 which provides that “the concerned DDIT/ADIT (Inv.) should forward the appraisal report to the Joint/Additional ( Inv.) who should forward the same with his detailed comments to the concerned DGIT/ADIT(Inv.), DIT (Inv.), CIT, Range Additional/Joint CIT and the Assessing Officer. In case any fact or conclusion drawn in the appraisal report, is also relevant to the functions assigned to any income tax authority, other than those named above, relevant information should be passed on to such authority also. The assessee or the person in whose case search was conducted is not entitled to get a copy of the appraisal report.” While such a provision may not be a coded provision, however, it is essentially a procedure laid down by which the search and seizure operation is conducted as it is part of manual. In the opinion of this court, such appraisal report of DDIT/ADIT (Inv.) is further subject to detailed comments of Joint /Additional Investigation, the Income Tax Authority and even other officers who may have relevance to the said functions of income tax authorities who may have relevance to the functions assigned, may also make their own comments. It is altogether ultimately put before the Assessing Officer. While the concerned person is present with his own assessments made after issue of notice under section 153(1) (A) of the Act, the AO would then decide, taking into consideration the view of the DDIT/ADIT (Inv.), in the form of appraisal report, meaning thereby, there are two aspects which would be presented before the Assessment Officer and keeping in view and weighing all the circumstances, he takes a decision and passes an order (4 of 4) [CW-8968/2021] under section 153 (A) & (B) assessing or reassessing the total income for six assessment years. Thus, it can be safely said that it is an inter departmental communication relating to appraisal report and the same is not necessarily required to be given to the assessee or the person in whose case search was conducted. As question of transparency does not arise since such person is independently required to submit his return of income in respect of each assessment year after the search has been already made. Of course, he is always entitled to assess the documents, books of accounts which have been seized for the purpose of submitting his own assessment. Thus, it is only, if the said own assessment is found to be different to the appraisal report, that the Assessment Officer shall take a decision. In the opinion of this court, therefore, the course adopted by the department as envisaged in para 6.4 of the search and seizure manual, as mentioned in the letter dated 22.07.2021, cannot be said to be in any manner contrary to the provisions of the statutes and it is in addition to the provisions of the statutes which need not be interfered with by this court no right of the petitioners can be said to be isolated. Keeping thereto, the impugned order dated 22.07.2021 does not warrant any interference. This writ petition is found to be devoid of merits and the same is accordingly dismissed. (SANJEEV PRAKASH SHARMA),J Chhaya Awasthi/150 "