W.P.(C) No. 21407 of 2016. Case: Aditya Narayan Mahasupakar Vs Chief Commissioner of Income Tax and Ors.. High Court of Orissa (India)
| Case Number | W.P.(C) No. 21407 of 2016 |
| Counsel | For Appellant: Ravichandran Iyer, G.K. Acharya, S.K. Behera, D.K. Naik, D.P. Mishra and S. Behera, Advs. and For Respondents: Standing Counsel |
| Judges | Sanju Panda and S.N. Prasad, JJ. |
| Issue | Constitution of India - Articles 226, 227; Income Tax Act, 1961 - Sections 120, 131, 131(1A), 132, 132A, 132B, 133(A), 139, 140, 142, 142(1), 143(2), 147, 148, 149, 151, 153, 153A, 153B, 153C, 158BC, 158BE; Indian Income-tax Act, 1922 - Sections 22, 37; Information Technology Act, 2000 - Section 2 |
| Judgement Date | January 20, 2017 |
| Court | High Court of Orissa (India) |
Judgment:
S.N. Prasad, J.
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This writ petition has been filed, inter alia, for the following reliefs:
(i) Issue a writ of mandamus or any other writ or writs hold that the search and seizure as held under Section 132 of the Income Tax Act as illegal same being not in consonance with the set procedures under the Income Tax Act.
(ii) Issue a writ of certiorari or any other appropriate writ or writs by quashing the notices as issued U/S. 153-A of the Income Tax Act, 1961 dated 06.08.2015 vide Annexure-2 and notice as issued 143(2) of the I.T. Act dated 11.07.2016 vide Annexure-4 and notice as issued U/s. 142(1) of the Income Tax Act, 1961 dated 01.11.2016 vide Annexure-5.
(iii) And further issue a writ of mandamus or any other appropriate writ or writs by directing the opp. Parties to release the seized documents as per the Panchanama dated 02.12.2014 vide Annexure-1."
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The brief fact leading to the institution of this writ petition is that search warrant was issued by opposite party No. 1 on 01.12.2014 by the Income Tax Department in exercise of the powers conferred under Section 132 of the Income Tax Act, 1961, hereinafter to be referred to as "the Act, 1961", in short. The authorities of the Income Tax Department conducted search, but no incriminating material has been recovered, rather they found cash amounting to Rs. 40,050/- and gold jewellery of 906 grams belonging to two married ladies of the family, which are within the permissible limits as prescribed by the Income Tax Department and accordingly, Panchanama was prepared showing inventory of cash worth of Rs. 40,050/-, golden jewellery valued at Rs. 22,00,714/-, but not seized.
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Opposite party No. 2 after search and seizure, issued a notice under Section 153 of the Act, 1961 on 06.08.2015 calling upon the petitioner to prepare a true and correct return for the assessment year 2009-10 and furnish the same within a period of 30 days. In compliance to the notice, the petitioner had filed compliance stating therein that the return filed under Section 139 of the Act, 1961 prior to the search operation may be treated as compliance to the notice issued under Section 153-A of the Act.
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Opposite party No. 2 has issued notice under Section 143(2) of the Act, 1961 on 11.07.2016 asking the petitioner to attend his office and explain the discrepancy in connection with the return income for the assessment year 2009-10 to 2014-15. Opposite party No. 2 has also called for the records for the last six assessment years in exercise of the powers vested under Section 142(1) of the Act, 1961 from the assessment year 2009-10 and fixed the date to 7.11.2016 for compliance of the notice dated 1.11.2016. The petitioner on receipt of the notice under Section 142(1) of the Act, 1961 filed his objection through his counsel challenging the correctness of the initiation of search and seizure proceeding. Opposite party No. 2 on receiving the objection from the petitioner has passed order holding the search and seizure conducted on 2.12.2014 as legal and valid.
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The petitioner has taken a ground to challenge the action of the Income Tax authorities including the jurisdiction conferred to them under Section 132 of the Act, 1961 by submitting that the said power can only be exercised by the competent authority if they have definite reasons to belief, there being material information in his possession otherwise not and in case any such search is conducted without any specific information or material information in possession, then the search action will be deemed illegal and arbitrary. The petitioner has further taken a ground that on mere assumption by the competent authorities of the Income Tax Department, the search and seizure order/warrant cannot be issued as the same will be totally against the provisions of Section 132 of the Act, 1961 and in the given case, it is seen that as per the Panchanama no materials have been seized from the petitioner, which would establish that the same was unaccounted for.
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Learned counsel representing the Revenue has vehemently opposed the submission of the learned counsel representing the petitioner by submitting that it is not correct that the authorities have exercised the powers conferred upon them under Section 132 of the Act, 1961 merely on surmises and conjectures, rather in course of scrutiny of the documents in the premises of the petitioner, it was found that there was some undisclosed income, which has not been disclosed by the petitioner while submitting the return under Section 139 of the Act, 1961 and as such, it cannot be said that there was no reason for making search and seizure. He further submits that the competent authorities of the Income Tax Department had issued notice under Section 153-A of the Act, 1961 in which he has made objection, which has been answered by the petitioner and in the meanwhile the assessment order has also been passed by the competent assessing authority and as such, at this moment, the writ petition itself is not maintainable because there is an assessment order and if the petitioner is at all aggrieved, he may challenge the same before the appropriate forum. He further submits that since the order of assessment has been passed by the authority, he ought to have approached the alternative remedy of appeal under the Statute, but instead of doing so, he has approached this Court invoking the extraordinary jurisdiction of this Court under Articles 226 and 227 of the Constitution of India, and hence, this writ petition is not maintainable even on the ground of alternative remedy. He further submits that the petitioner has challenged the search and seizure, but the search was conducted on 2.12.2014 in pursuance to the search warrant issued on 1.12.2014, but fairly for about more than two years the search warrant has not been questioned by the petitioner and only when notice under Section 153 of the Act, 1961 has been issued on 6.8.2014 and even from that date, this writ petition has been filed after lapse of more than one year and four months approximately from the date of issuance of notice. Hence, it cannot be said that the petitioner is at all aggrieved with the search warrant.
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We have heard the learned counsels for the parties and gone through the materials available on record.
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Before appreciating the argument advanced on behalf of the parties, we thought it proper to have a discussion regarding the statutory provision which has got bearing for deciding the issue involved in this case which are being quoted hereunder as:-
"132 Search and seizure. (1) Where the [Principal Director General or] Director General or [Principal Director or] Director or the [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner or Additional Director or Additional Commissioner or Joint Director or Joint Commissioner in consequence of information in his possession, has reason to believe that--
(a) any person to whom a summons under sub-section (1) of section 37 of the Indian Income-tax Act, 1922 (11 of 1922), or under sub-section (1) of section 131 of this Act, or a notice under sub-section (4) of section 22 of the Indian Income-tax Act, 1922, or under sub-section (1) of section 142 of this Act was issued to produce, or cause to be produced, any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account or other documents as required by such summons or notice, or
(b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any books of account or other documents which will be useful for, or relevant to, any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act, or
(c) any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been, or would not be, disclosed for the purposes of the Indian Income-tax Act, 1922 (11 of 1922), or this Act (hereinafter in this section referred to as the undisclosed income or property), [then,--
(A) the [Principal Director General or] Director General or [Principal Director or] Director or the [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner, as the case may be, may authorise any Additional Director or Additional Commissioner or Joint Director, Joint Commissioner, Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income-tax Officer, or
(B) such Additional Director or Additional Commissioner or Joint Director, or Joint Commissioner, as the case may be, may authorise any Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income-tax Officer,
(the officer so authorised in all cases being hereinafter referred to as the authorised officer) to--]
(i) enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that such books of account, other documents, money, bullion, jewellery or other valuable article or thing are kept;
(ii) break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (i) where the keys thereof are not available;
(iia) search any person who has got out of, or is about to get into, or is in, the building, place, vessel, vehicle or aircraft, if the authorised officer has reason to suspect that such person has secreted about his person any such books of account, other documents, money, bullion, jewellery or other valuable article or thing;
(iib) require any person who is found to be in possession or control of any books of account or other documents maintained in the form of electronic record as defined in clause (t) of sub-section (1) of section 2 of the Information...
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