Ram Naresh Survey International Pvt. Ltd. v. Asstt. Director Of Income-tax (Investigation) And Others
[Citation -2015-LL-0429-10]

Citation 2015-LL-0429-10
Appellant Name Ram Naresh Survey International Pvt. Ltd.
Respondent Name Asstt. Director Of Income-tax (Investigation) And Others
Court HIGH COURT OF ALLAHABAD
Relevant Act Income-tax
Date of Order 29/04/2015
Judgment View Judgment
Keyword Tags financial consultancy • search and seizure • undisclosed income • issuance of notice • unaccounted money
Bot Summary: II. To issue a writ of mandamus, order or direction to respondent no.1 to permit the banks to allow the operation of bank accounts to discharge liabilities of the petitioner to its customers who are suffering due to illegal action of the respondent no.1. On information, the Assistant Director, Income Tax issued a notice on 30.6.2011 under Section 131(1A) of the Income Tax Act to the main Banker of the assessee i.e. Branch Manager, H.D.F.C. Bank, Dankinganj, Mirzapur for personal attendance alongwith documents and 3 details of account of the petitioner. Further, the Bank was directed that No further operation from any of the accounts in the name of Ram Naresh Financial Consultancy Private Limited or in the name of Ram Naresh Survey International Private Limited should be allowed until the bank receive permission from the office of the undersigned. Later, a search was conducted at the business premises of the assessee on 10.10.2011 and in respect of the Bank account on 12.10.2011. The bank balance was converted in the Demand Draft and deposited in the account of Commissioner of Income Tax, by treating the same as undisclosed income. The Assistant Director of Income Tax, Allahabad vide his order dated 30.6.2011 while issuing notice to the petitioner, rightly directed the banks not to allow the petitioners to operate the bank account. Based on the above set of facts, independent enquiries were conducted and it came to light that the group has four bank accounts in the name of Ram Naresh Consultancy Private Limited, the details of which are as under:- S.No.


A.F.R. Court No. - 10 Case :- WRIT TAX No. - 1259 of 2011 Petitioner :- Ram Naresh Survey International Pvt. Ltd. Respondent :- Asstt. Director Of Income Tax (Investigation) And Others Counsel for Petitioner :- Dinesh Tiwari,R.B. Shukla,Rahul Misra Counsel for Respondent :- C.S.C., Income Tax,Bharat Ji Agrawal,Govind Krishna Hon'ble Arun Tandon,J. Hon'ble Dr. Satish Chandra,J. 1. By means of this writ petition petitioner has made following prayers:- "I. To issue writ of mandamus ex debito justitiae to compel respondent no.1 to withdraw notices under section 131 (1A) of Income Tax Act, 1961, issued by him to HDFC Bank, Dankinganj, Mirzapur, and other branches of this bank and all other banks given in para-20 of petition illegally restraining operation of bank accounts and covertly sealing office premises on 21.8.2011. II. To issue writ of mandamus, order or direction to respondent no.1 to permit banks to allow operation of bank accounts to discharge liabilities of petitioner to its customers who are suffering due to illegal action of respondent no.1. III. To issue any other writ, order or direction which this Hon'ble Court may deem appropriate in facts and circumstances of case to avoid inconvenience and hardship to petitioner which has been made vulnerable to interest u/s234A penalties u/s 271B & 271F and prosecution u/s 276CC of Income-tax Act, 1961, if it is not able to get its accounts audited and fails to submit return of income along with audit report by 30.9.2011 for A.Y. 2011-12. (iiia) suitable writ in nature of certiorari to quash order of search by Director of Income-tax date 20.8.2011 since he had no information in his possession to believe that petitioner was in possess of 2 undisclosed income or property as per section 132 (1)(c) and other clauses (a) and (b) of section 132(1) of Income-tax Act were not applicable. (iiib) suitable writ or order in nature of certiorari to quash order of seizure of money from banks by authorized offices on 12.10.2011 under Section 132 (1)(c)(iii) of Income-tax Act. (iiic) suitable writ or order in nature of mandamus to Income-tax Department to release illegally seized money to petitioner. IV To award exemplary cost to petitioner for impugned illegal action of respondent no.1." 2. Sri V. B. Upadhyaya, learned senior counsel assisted by Sri R. B. Shukla, learned counsel for petitioner-assessee submits that petitioner's company was named as Ram Naresh Financial Consultancy Private Limited, on its inception on 12.2.2010. Its name was changed to Ram Naresh Survey International Private Limited on 24.2.2011, which change was duly registered with Assistant Registrar of Companies as per Annexure-6 to writ petition. petitioner manages 'Ram Survey', which is online market research centre to elicit customers to shape and develop products and services, with help of latest information and guideline to ensure better compliance by industries and consumers. It is professionally managed market research company based at Mirzapur. 3. On information, Assistant Director, Income Tax (Investigation) issued notice on 30.6.2011 under Section 131(1A) of Income Tax Act to main Banker of assessee i.e. Branch Manager, H.D.F.C. Bank, Dankinganj, Mirzapur for personal attendance alongwith documents and 3 details of account of petitioner. Further, Bank was directed that "No further operation from any of accounts in name of Ram Naresh Financial Consultancy Private Limited or in name of Ram Naresh Survey International Private Limited should be allowed until bank receive permission from office of undersigned." 4. Later, search was conducted at business premises of assessee on 10.10.2011 and in respect of Bank account on 12.10.2011. bank balance was converted in Demand Draft and deposited in account of Commissioner of Income Tax, by treating same as undisclosed income. 5. Challenging action so taken by department learned counsel for assessee submits that Section 131(1A) of Act only empowers inquiry or investigation, if officer has reasons to suspect that any income has been concealed or is likely to be concealed. He submits that no income is unaccounted nor there are any outstanding income tax dues against company that can be recovered by department. It is submitted that similar notices had also been issued to other bankers of assessee namely I.C.I.C.I. Bank, Mirzapur, AXIS Bank, Mirzapur; S.B.I., Mirzapur. entered business of petitioner had come to halt. Its customers who are to be paid are lining up with complaint and pressure. 6. It is also submission of learned counsel that petitioner-assessee wrote letter to Assistant Director, Income Tax (Investigation) with respect to notice dated 30.6.2011, but no response was received by petitioner or 4 its Bankers. 7. By filing application, learned counsel tired to prove that petitioner had explained source of credit of balance available in current account of Bank from deposits of public investors in Ram Survey scheme. 8. According to learned counsel for petitioner, all accounts are subject to audit under Section 44AB of Act. entire money has been fully explained. So, he submits that issuance of notice to bankers are illegal and all notices to effect have to be set aside. He further prays that search is also illegal as there was no material for issuing search warrant. 9. Lastly, he relied upon judgment in case of Shyam Jewellers Vs. Chief Commissioner of Income Tax (Admn.) 196 ITR 244 All., where it has been held that when search and seizure is without jurisdiction then impugned order of summary assessment is invalid specially during pendency of writ proceedings. remedy under Section 132(11) was not wide enough to cover all pleas raised in case particularly sealing of premises. So, writ petition is maintainable. 10. On other hand, Sri Govind Krishna, learned counsel for department justified impugned action. He explained modus operandi pertaining to business of assessee. According to him, brochure annexed to supplementary affidavit declares 'Ram Survey' as India's largest survey company. It is group of 'Ram Naresh Survey International Private Limited'. Ram Survey, as it is declared in brochure, 5 is online market research Group, where consumers join hands to shape and develop products and services through online survey. survey opinions, upon customers, who have opinion matters for market survey are given opportunity to mint opinion of customer every time he expresses it. person can become member of Ram Survey with joining fee of Rs. 3500/- (including service tax and registration fee of Rs. 1000/- and panel charges of Rs. 2500/-). On becoming member, company offers advance product coupon to be downloaded and printed which can be used for online shopping from ramdiscountbazaar.com. scheme provides that on every Wednesday, member will be asked to provide his opinion in questionnaire or survey format, about product or services. income will be generated from reward point. 11. Learned counsel submits that money of innocent people was taken under various schemes/names, but same was never refunded to then and these people have been duped. Notices were rightly issued to HDFC bank in respect of enquiries made. Assistant Director of Income Tax, Allahabad vide his order dated 30.6.2011 while issuing notice to petitioner, rightly directed banks not to allow petitioners to operate bank account. 12. notice refers to Ram Naresh Survey International Private Limited, Ashish Dwivedi, Ruchi Kesharvani, Chandra Prabha Kushwaha, Ratnesh Mishra, & Sushil Kushwaha. 13. It is also stated that first information report was lodged against S. K. Kushwaha, Managing Director in Case Crime no. 6 298 of 2011. Bail has been granted to accused on 15.6.2011. 14. This court had called for material on basis whereof authorization of search made alongwith original authorization order. records have been produced and have been perused by Court. 15. From records, it appears that group claims to conduct online surveys on behalf of renowned companied and claims to act as "online division of market research companies". For conducting these online surveys, company ropes in individuals through Internet and otherwise. These customers are called panelists. joining fee chargeable to start conducting surveys is Rs.3500. company promises to reward its panelists by giving them reward points for every survey conducted by them. These reward points can be redeemed either by cash/cheque, or by product reward point (by purchasing online through www.ramdiscountbazaar.com) or by service reward point (redemption can be done by purchasing services like Hotel Tickets, Tour Packages, E-Mobile Service, etc.). detail business profile of group is provided in pamphlet and power point presentation of group placed on file as Annexure-A. 16. record, disclose that FIR was lodged against company, with Mirzapur Police under sections 419, 420, 467 and 471 of Indian Penal Code for committing financial irregularities and for duping individual customers by usurping there hard earned money deposited as "joining fee". directors of company, Shri Susheel Kushwaha and Smt. Chandra Prabha Kushwaha, who were absconding after FIR 7 were arrested by Mirzapur Police and have been released on bail. 17. In meanwhile, reference was received from Financial Intelligence Unit-India, New Delhi, in form of Suspicious Transaction Report. dissemination note (which incidentally had also been disseminated to Enforcement Directorate) reads as under: "The said customer is suspected to be involved in multi level marketing. According to customer's website http://www.ramsurvey.com/OurBanker.aspx they provide each of their members 'freedom to live life they've dreamed'. Every members is required to participate in survey and refer others to participate too. For every pair member refers he earns one point. customer promises different prizes for members depending on number of points earned. prizes range from PC for 40 points to Mercedes Benz for 7000 points. customer seems to be duping general public with these tall promises. On studying financial transactions of main accounts credits are mainly by cash. debits are mainly by clearing to various third parties and as cash paid to self. From 19.06-2011 to 28-12-2011, total cash credits in account equal Rs.58.55 lakhs approx. During same period amount withdrawn as cash paid to self is Rs.30.25 lakhs approx. This nature and pattern of transactions seen to devoid of any economic or rational purpose............ Based on above mentioned facts, account is being reported as suspicious. 18. Internet data base was checked and verified. Local enquiries were also conducted and it was found that company was actually involved in financial bungling and fraud. Copy of some of complaints are registered on website www.scambook.com are annexed as Annexure-C. 19. Based on above set of facts, independent enquiries were conducted and it came to light that group has four bank accounts in name of Ram Naresh Consultancy Private Limited, details of which are as under:- S.No. Account No. Bank Branch Credit As on Credit 8 Balance (in balance (in Rs.) Rs.) as on 31.3.2011 1 31548151414 SBI City Branch 61547298=00 12-05-2011 47910215=00 Mirzapur 2 081805000389 ICICI Katra Bajirao, 91362=05 23-04-2011 8269721=82 Mirzapur 3 910020047515118 AXIS Badli Katra, 7859670=00 30-06-2011 42339848=60 Mirzapur 4 19128630000018 HDFC Dankinganj, 10525878=56 28-06-2011 1298994=54 Mirzapur 20. Summons were sent to above banks, to company (through its Directors) and to directors individually on 30.06.2011 (the Inspector of Income Tax who was authorized to serve summons could not do so as individuals were absconding). Similar summons were once again sent on 4.07.2011 by registered post fixing date of compliance as 11.07.2011. No one attended on 11.07.2011. Another set of summons alongwith show cause to explain why penalty for non-compliance of summons may not be levied was issued on 12.07.2011 in F.No. ADIT(INV.)/ALLD/FIU- STR/2011-12/7025 was sent requiring assessee to explain nature and source of credit balance in above four bank accounts. assessee was further directed to prove that transactions in above mentioned bank accounts were reflected in relevant books of accounts, which had been disclosed to department. date of compliance of this letter was 18.07.2011. No one responded to said notice. 21. From record, it appears that assessee has not cooperating with investigation. On 19.7.2011, counsel for assessee appeared, but no documents were produced, 9 despite fact that same were asked for in above mentioned letters. Again, on 22.7.2011, counsel appeared, but nothing was produced to satisfy requirement of letters. Again On 26.7.2011, no documents were produced. 22. No one attended proceedings on 18.07.2011, before Assistant Director (Investigation) Income Tax. 23. From above, it is crystal clear that assessee has not cooperated at all with department. Prima facie it appears that petitioner-assessee and its Directors are in possession of unaccounted money and same needs to be examined. We find no reason to interfere with impugned notice/order, same is hereby sustained alongwith reasons mentioned therein. 24. Counsel for department has informed Court that assessment under Section 153(A) has since been completed on 31st March, 2014 and same is available in sealed envelop, as per interim order of this Court. In view of above, we vacate interim order and direct department to serve assessment order on assessee and proceed as per law. 25. In result, writ petition filed by petitioner- assessee is hereby dismissed. (Dr. Satish Chandra,J.) (Arun Tandon,J.) Order Date :- 29.4.2015 Dev/- Ram Naresh Survey International Pvt. Ltd. v. Asstt. Director Of Income-tax (Investigation) And Other
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