Commissioner of Income-tax, Gujarat v. Vijaybhai N. Chandrani
[Citation -2013-LL-0718-33]

Citation 2013-LL-0718-33
Appellant Name Commissioner of Income-tax, Gujarat
Respondent Name Vijaybhai N. Chandrani
Court SUPREME COURT
Relevant Act Income-tax
Date of Order 18/07/2013
Judgment View Judgment
Keyword Tags reason to believe • satisfaction note • show-cause notice • seized document
Bot Summary: The Assessing Authority had provided the said documents to the assessee, whereafter the assessee has approached the High Court in a Writ Petition questioning the six Show Cause Notices dated 07.10.2009. The High Court has elaborately examined the case at hand and delved into the statutory scheme for assessment in case of search and requisition as prescribed under Sections 153A, 153B and 153C of the Act, 1961 and reached the conclusion that the documents seized by the Assessing Authority under Section 132A do not belong to the assessee and therefore the condition precedent for issuance of the notice under Section 153C is not fulfilled. Shri Prasad besides questioning the impugned judgment and order on merits would also submit that the High Court ought not to have entertained the Writ Petition filed by the assessee against the Show Cause Notices issued by the Assessing Authority under Section 153C. 11. Thereafter, upon request of the assessee, the Assessing Authority has furnished him with the copies of documents seized under Section 132A. The assessee being dissatisfied with the said documents instead of filing his explanation/reply to the Show Cause Notices, has filed a Writ Petition before the High Court impugning the said notices. In Bellary Steels Alloys Ltd. v. CCT, 17 SCC 547, this Court had allowed the assessee therein to withdraw the original Writ 6 Page 6 Petition filed before the High Court as the said proceedings came to be filed against the show-cause notice and observed that the High Court should not have interfered in the matter as the Writ Petition was filed without even reply to the show cause notice. We are fortified by the decision of this Court in Indo Asahi Glass Co. Ltd. v. ITO, 10 SCC 444, wherein the assessee had approached this Court against the judgment and order of the High Court which had dismissed the Writ Petition filed by the assessee wherein challenge was made to the show cause notice issued by the Assessing Authority on the ground that alternative remedy was available to the assessee. Since these appeals are primarily decided on facts by the First Appellate Authority, the Tribunal and the High Court, we do not find any substantial question of law which requires to be decided by this Court.


IN SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 5888 OF 2013 (@ SPECIAL LEAVE PETITION (CIVIL) NO.8947 OF 2011) COMMISSIONER OF INCOME TAX, GUJARAT APPELLANT VERSUS VIJAYBHAI N. CHANDRANI RESPONDENT WITH C.A.NO.5896 OF 2013 @ S.L.P.(C)NO.29038/2011 WITH C.A.NO.5897 OF 2013 @ S.L.P.(C)NO.29039/2011 WITH C.A.NO.5898 OF 2013 @ S.L.P.(C)NO.29040/2011 WITH C.A.NO.5899 OF 2013 @ S.L.P.(C)NO.31248/2011 WITH C.A.NO.5900 OF 2013 @ S.L.P.(C)NO.32912/2011 WITH C.A.NO.5901 OF 2013 @ S.L.P.(C)NO.34009/2011 WITH C.A.NO.5902 OF 2013 @ S.L.P.(C)NO.34010/2011 WITH C.A.NO.5889 OF 2013 @ S.L.P.(C)NO.113/2012 WITH C.A.NO.5890 OF 2013 @ S.L.P.(C)NO.114/2012 WITH C.A.NO.5903 OF 2013 @ S.L.P.(C)NO.8502/2012 WITH C.A.NO.5891 OF 2013 @ S.L.P.(C)NO.12900/2012 WITH C.A.NO.5892 OF 2013 @ S.L.P.(C)NO.19991/2012 WITH C.A.NO.5893 OF 2013 @ S.L.P.(C)NO.21295/2012 WITH C.A.NO.5894 OF 2013 @ S.L.P.(C)NO.21340/2012 WITH C.A.NO.5895 OF 2013 @ S.L.P.(C)NO.24322/2012 O R D E R 1. Delay in filing and refiling Special Leave Petitions is condoned. 1 Page 1 2. Leave granted. C.A.No.5888 of 2013 @ S.L.P.(C)No.8947 of 2011: 3. This appeal is directed against judgment and order passed by High Court of Gujarat in S.C.A. No.13787 of 2009, dated 30.03.2010, whereby and whereunder High Court has set aside Show Cause Notices issued by Assessing Authority under Section 153C of Income Tax Act, 1961 (for short 'the Act, 1961'), dated 07.10.2009. 4. Brief facts of case are: respondent-assessee purchased plot of land from Samutkarsh Co-operative Housing Society (for short Society ) being developed by one Savvy Infrastructure Ltd. In 2008, search was conducted under Section 132 of Act, 1961 in premises of Society and also at office of Savvy Infrastructure Ltd. During search certain documents were seized under Section 132A of Act, 1961. Upon scrutiny, it was found that seized documents reflected names of certain individuals including assessee. Accordingly, for further proceedings Assessing Authority had transmitted seized documents to jurisdictional Assessing 2 Page 2 Authority in whose jurisdiction assessee was being assessed. After receipt of said information/documents, Assessing Authority has recorded satisfaction note dated 06.10.2009, that, he has reason to believe that case of escapement of income may exist and therefore assessee s case requires to be reassessed for assessment years 2001-2002 to 2006-2007 under Section 153C of Act, 1961. relevant paragraphs of said satisfaction note read as under: SATISFACTION NOTE FOR INITIATION OF PROCEEDINGS U/S.153C OF INCOME TAX ACT, 1961 Name of assessee : Shri Vijay H.Chandrani AY : 2001-02 to 2006-07 U/s.153C and 2007-08 U/s.143(3). DCIT Central Circle 1(1) Ahmedabad, vide his letter DCIT/CC.1 (1)/Vijay Chandrani/Samutkarsh dated 30.03.2009 had intimated ITO Ward 7(4) Ahmedabad that above mentioned assessee is one of member of Co-op. Society namely Samutkarsh Co-op.Housing Society, case of Samutkarsh Co-op.Housing Society as well as in case of Sa' Infrastructure Ltd., Ahmedabad, proceedings U/s.132 were carried out by department. During course of search, certain incriminating document pertaining to assessee were also found...... 5. Accordingly, Assessing Authority has issued six Show Cause Notices under Section 153C of Act,1961 to assessee for reassessment of income of aforesaid six assessment years and directed him to furnish return of income in respect of said 3 Page 3 assessment years in prescribed form within thirty days of receipt of said notices, dated 07.10.2009. 6. Upon receipt of said notice, assessee by letter dated 11.11.2009 requested Assessing Authority to furnish him with copies of seized documents on basis of which said notices were issued. Assessing Authority had provided said documents to assessee, whereafter assessee has approached High Court in Writ Petition questioning six Show Cause Notices dated 07.10.2009. 7. High Court has elaborately examined case at hand and delved into statutory scheme for assessment in case of search and requisition as prescribed under Sections 153A, 153B and 153C of Act, 1961 and reached conclusion that documents seized by Assessing Authority under Section 132A do not belong to assessee and therefore condition precedent for issuance of notice under Section 153C is not fulfilled. Accordingly High Court has allowed Writ Petition filed by assessee and quashed said notices issued by Assessing Authority by impugned judgment and order. 4 Page 4 8. Aggrieved by aforesaid judgment and order passed by High Court, Assessing Authority is before us in this appeal. 9. We have heard Shri Prasad, learned counsel for Assessing Authority and Shri Amar Dave, learned counsel appearing for respondent at considerable length. 10. Shri Prasad besides questioning impugned judgment and order on merits would also submit that High Court ought not to have entertained Writ Petition filed by assessee against Show Cause Notices issued by Assessing Authority under Section 153C. 11. Au contraire Shri Amar Dave justifies impugned judgment and order. 12. We have gone through documents on record including satisfaction note recorded by Assessing Authority and Show Cause Notices. We have also perused impugned judgment and order of High Court. 5 Page 5 13. In instant case, it transpires from record that jurisdictional Assessing Authority, upon having reason to believe that documents seized indicate escapement of income, has issued Show Cause Notices under Section 153C to assessee for reassessment of his income during assessment years 2001-2002 to 2006-2007. Thereafter, upon request of assessee, Assessing Authority has furnished him with copies of documents seized under Section 132A. assessee being dissatisfied with said documents instead of filing his explanation/reply to Show Cause Notices, has filed Writ Petition before High Court impugning said notices. 14. In our considered view, at said stage of issuance of notices under Section 153C, assessee could have addressed his grievances and explained his stand to Assessing Authority by filing appropriate reply to said notices instead of filing Writ Petition impugning said notices. It is settled law that when alternate remedy is available to aggrieved party, it must exhaust same before approaching Writ Court. In Bellary Steels & Alloys Ltd. v. CCT, (2009) 17 SCC 547, this Court had allowed assessee therein to withdraw original Writ 6 Page 6 Petition filed before High Court as said proceedings came to be filed against show-cause notice and observed that High Court should not have interfered in matter as Writ Petition was filed without even reply to show cause notice. This Court further observed as follows: 3. In circumstances, we could have dismissed these civil appeals only on ground of failure to exhaust statutory remedy, but for fact that huge investments involving large number of industries is in issue. 15. We are fortified by decision of this Court in Indo Asahi Glass Co. Ltd. v. ITO, (2002) 10 SCC 444, wherein assessee had approached this Court against judgment and order of High Court which had dismissed Writ Petition filed by assessee wherein challenge was made to show cause notice issued by Assessing Authority on ground that alternative remedy was available to assessee. This Court concurred with findings and conclusions reached by High Court and dismissed said appeal with following observations: 7 Page 7 5. This and other facts cannot be taken up for consideration by this Court for first time. In our opinion, High Court was right in coming to conclusion that it is appropriate for appellants to file reply to show-cause notice and take whatever defence is open to them. 16. In present case, assessee has invoked Writ jurisdiction of High Court at first instance without first exhausting alternate remedies provided under Act. In our considered opinion, at said stage of proceedings, High Court ought not have entertained Writ Petition and instead should have directed assessee to file reply to said notices and upon receipt of decision from Assessing Authority, if for any reason it is aggrieved by said decision, to question same before forum provided under Act. 17. In view of above, without expressing any opinion on correctness or otherwise of construction that is placed by High Court on Section 153C, we set aside impugned judgment and order. Further, we grant time to assessee, if it so desires, to file reply/objections, if any, as contemplated in said notices within 15 days' time from today. If such 8 Page 8 reply/objections is/are filed within time granted by this Court, Assessing Authority shall first consider said reply/objections and thereafter direct assessee to file return for assessment years in question. We make it clear that while framing assessment order, Assessing Authority will not be influenced by any observations made by High Court while disposing of Writ Petition. If, for any reason, assessment order goes against assessee, he/it shall avail and exhaust remedies available to him/it under Act, 1961. 18. appeal is disposed of accordingly. No costs. C.A.NO. 5896 OF 2013 @S.L.P.(C)NO.29038/2011, WITH C.A.NO.5897 OF 2013 @S.L.P.(C)NO.29039/2011 WITH C.A.NO.5898 OF 2013 @S.L.P.(C)NO.29040/2011 WITH C.A.NO.5899 OF 2013 @S.L.P.(C)NO.31248/2011 WITH C.A.NO.5900 OF 2013 @S.L.P.(C)NO.32912/2011 WITH C.A.NO.5901 OF 2013 @S.L.P.(C)NO.34009/2011 WITH C.A.NO.5902 OF 2013 @S.L.P.(C)NO.34010/2011 WITH C.A.NO.5889 OF 2013 @S.L.P.(C)NO. 113/2012 WITH C.A.NO.5890 OF 2013 @S.L.P.(C)NO. 114/2012 WITH C.A.NO.5903 OF 2013 @S.L.P.(C)NO. 8502/2012 WITH C.A.NO.5891 OF 2013 @S.L.P.(C)NO.12900/2012 WITH C.A.NO.5892 OF 2013 @S.L.P.(C)NO.19991/2012 WITH C.A.NO.5893 OF 2013 @S.L.P.(C)NO.21295/2012 WITH C.A.NO.5894 OF 2013 @S.L.P.(C)NO.21340/2012 AND WITH C.A.NO. 5895 OF 2013 @S.L.P.(C)NO.24322/2012: 19. These appeals arise from judgment and orders passed by High Court of Gujarat in Tax Appeal 9 Page 9 Nos.2085 of 2009, 2082 of 2009, 2078 of 2009, 2083 of 2009, 2080 of 2009, 2077 of 2009, 2086 of 2009, 2084 of 2009, 2079 of 2009, dated 27.04.2011 and Tax Appeal No.444 of 2010, 445 of 2010, 2081 of 2009, dated 26.07.2011, 2081 of 2009, dated 27.04.2011, 1498 of 2010, dated 21.12.2011, 449 of 2010, dated 26.07.2011 and 1493 of 2010, dated 21.12.2011 respectively. 20. In these appeals Tribunal and High Court, after going through facts and circumstances of each case, have reached conclusion that Assessing Authority was not justified in computing assessments and thereafter fastening liability on assessee to pay tax and interest. Since these appeals are primarily decided on facts by First Appellate Authority, Tribunal and High Court, we do not find any substantial question of law which requires to be decided by this Court. 21. We make it abundantly clear that we have not expressed any opinion on correctness or otherwise of observations made by High Court insofar as interpretation of Section 153C of Act, 1961 is concerned. said question is kept open to be agitated in appropriate matter. 10 Page 10 22. Accordingly, all these appeals are disposed of with no order as to costs. ....J. (H.L. DATTU) ......J. (DIPAK MISRA) NEW DELHI; JULY 18, 2013. 11 Page 11 Commissioner of Income-tax, Gujarat v. Vijaybhai N. Chandrani
Report Error