2004 (3) TMI 16 - HC - Income Tax

Authority to issue the requisition - Writ petitioners have challenged the jurisdiction of respondent to make enquiry or to require the petitioners to furnish any information or to produce any document asked for in the said letter dated September 9 1996 in order to substantiate the claim of exemption in support of the return u/s 206- By this letter respondent required petitioner to furnish various information and further asked the petitioners to produce relevant books of account and documents in respect of such information which related to the tax deducted by petitioner u/s 192 - unless an Income-tax Officer is an Assessing Officer by virtue of section 2 clause (7A) he cannot issue directions in terms of section 131 as done by the impugned letter - I find that the notification dated May 1 1989 invested respondent with the authority to issue the requisition dated September 9 1996 by virtue of his power of being the Assessing Officer. Thus this application is devoid of any substance and is dismissed

Summary

Issues Involved:
1. Jurisdiction of respondent No. 1 to request documents and information.
2. Maintainability of the writ application due to the existence of an alternative remedy.
3. Validity of the notification dated May 1, 1989, and its implications on the powers of respondent No. 1.

Detailed Analysis:

1. Jurisdiction of Respondent No. 1:
The petitioners challenged the jurisdiction of respondent No. 1 to request documents and information by a letter dated September 9, 1996. The petitioners argued that respondent No. 1 was not their Assessing Officer and therefore could not ask for the production of books of account and other documents. The petitioners contended that only the Deputy Commissioner of Income-tax, Special Range-11, Calcutta, under the Commissioner of Income-tax, West Bengal-1, had the jurisdiction to make such assessments and inquiries.

The court examined the definition of "Assessing Officer" under section 2(7A) of the Income-tax Act, 1961, and the notification dated May 1, 1989. The notification conferred powers upon respondent No. 1 in respect of all matters relating to Chapter XVII-B (except section 195) and section 221 of the Act for assessees under the jurisdiction of the Commissioner of Income-tax, W.B.-1 and W.B.-VII, Calcutta. The court concluded that the power under section 221, which relates to the assessment of penalties, inherently includes the powers of an Assessing Officer, thereby allowing respondent No. 1 to exercise powers under section 131 of the Act, which includes the discovery and production of evidence.

2. Maintainability of the Writ Application:
The respondent authority raised a preliminary objection regarding the maintainability of the writ application, arguing that the petitioners had an alternative remedy available under the Act. The court acknowledged that while a writ court can refuse to entertain a writ application if an efficacious alternative remedy exists, it is not an absolute bar, particularly when the authority in question is alleged to have acted without jurisdiction.

The court referred to the Supreme Court's ruling in Dr. Smt. Kuntesh Gupta v. Management of Hindu Kanya Mahavidyalaya, which held that the existence of an alternative remedy does not preclude a writ court from granting relief if the authority acted without jurisdiction. Given that the writ application had been entertained since 1996 and affidavits had been filed, the court decided to overrule the preliminary objection and proceed to examine the merits of the case.

3. Validity of the Notification Dated May 1, 1989:
The court analyzed the notification dated May 1, 1989, which conferred jurisdiction upon respondent No. 1. The petitioners argued that this notification did not explicitly grant respondent No. 1 the powers under section 131 of the Act, unlike a subsequent notification dated September 15, 1999, which explicitly mentioned such powers.

The court found that the notification dated May 1, 1989, did indeed confer powers upon respondent No. 1 to act as the Assessing Officer for the purposes of sections in Chapter XVII-B and section 221. The court reasoned that the powers under section 131 are implicit in the authority of an Assessing Officer, and the absence of an explicit mention in the 1989 notification did not negate these powers. The court also noted that the subsequent notification in 1999 served as a clarification rather than a new conferral of powers.

The court dismissed the application, concluding that respondent No. 1 had the jurisdiction to issue the requisition dated September 9, 1996, by virtue of being the Assessing Officer.

Conclusion:
The court dismissed the writ application, holding that respondent No. 1 had the jurisdiction to request the production of documents and information. The court overruled the preliminary objection regarding the maintainability of the writ application due to the existence of an alternative remedy and upheld the validity of the notification dated May 1, 1989, which conferred the necessary powers upon respondent No. 1. The interim order granted earlier was vacated.