TMI Blog2013 (7) TMI 805X X X X Extracts X X X X X X X X Extracts X X X X ..... is to be exercised needlessly without any purpose - The exercise of power in such case can only be challenged, if the power is being exercised with ulterior motive and mala fide intentions. It is not open for the petitioner to contend before the writ court that the exercise of power, which admittedly exists in the authority, will expose the petitioner to assessment for the same period on which assessing authority has already recorded satisfaction – petition decided against assessee. - - - - - Dated:- 25-11-2011 - SUNIL AMBWANI, PANDEY K. N. JJ. For the Petitioner: Shri S. D. Singh, learned counsel. For the Respondent: Shri Dhananjay Awasthi JUDGMENT The petitioner is engaged in the business of purchase and sale of jewellery, etc. In the regular course of business the petitioner dispatched 69.900 kg. of silver bullion to M/s R. M. Silver, Rajkot and M/s. Subh Enterprises at their addresses at Rajkot for manufacturing silver ornaments through M/s. Harish Kumar Laxman Kumar, 225, Kacha Ghasiram, Chandni Chowk, New Delhi. The entire consignment of the bullion was seized from the custody of petitioner's courier by the Delhi Police. The Deputy DIT (Inv), Unit-II (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e initiation of the assessment proceedings against the petitioner under section 153A read with section 153B for the assessment years 2003-04 to 2009-10, vide notice dated March 30, 2011, issued by the Income-tax Officer Ward-II(2), Bareilly. The petitioner has also challenged the vires of section 153A and 153C of the Act as against the basic spirit and structure of the Income-tax Act, 1961, providing for mandatory assessment or reassessment for six previous assessment years in advance on discovery of any undisclosed income of an assessee. In the counter-affidavit of Shri Amit Kumar Chaudhary, Income-tax Inspector, Commissioner of Income-tax, Office, Bareilly, it is stated in para. 6 as follows : "6. That the contents of paragraphs 3, 4, 5, 6, 7, 8, 9 and 10 of the writ petition it is averred that the silver taken into custody under section 132A on June 17, 2008, which was found to be in possession of M/s. Harish Kumar and Laxman Kumar the assessment under section 153B(1)(b) read with section 143(3) for the assessment year 2009-10 on December 13, 2010. The petitioner was issued notices and on the basis of notices produced the books of account which were examined and it was found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... report was accordingly submitted, vide this office letter of even No. dated January 29, 2009, to the Commissioner of Income-tax, Bareilly, wherein inquiries conducted in this case were also reported to him. I have gone through the details of the application furnished by the assessee and have also perused the relevant books of account, i.e., stock register, ledger and cash book. The silver bullion mentioned above has been found duly recorded in the stock register and necessary verification has also been made from the ledger and the cash book. The statement of the assessee, i.e., Shri Savesh Kumar Agarwal, S/o Shri Vishnu Kumar Agarwal, resident of Sahukara, Bareilly, was recorded on August 18, 2008. The careful study of the statement of Shri Savesh Kumar Agarwal recorded on oath revealed nothing adverse. The assessee is a income-tax payer and is regularly assessed to tax for a number of years. Since the application under section 132B is well within time and seized goods as mentioned above are part of the stock-in-trade and all the requirements mentioned under the provisions of section 132B are fulfilled, the silver bullion as mentioned above is released. The order has been passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the seized silver bullion belongs to M/s. Sarvesh Jewellers Prop. of Shri Sarvesh Agarwal, Bareilly. The ownership of consignment in the case of Shri Sarvesh Agrawal, Prop. of M/s. Sarvesh Jewellers, PAN-AETPA3062K had been confirmed by his Assessing Officer, i.e., Income-tax Officer, Ward. 2(2), Bareilly. Hence, this person is required to be assessed under section 153C of the Income-tax Act. Accordingly, the Incometax Officer, Ward-2(2), Bareilly, is requested to proceed under section 153C of the Income-tax Act in the case of Shri Sarvesh Agarwal Prop. of M/s Sarvesh Jewellers, PAN-AETPA3062K. (K.T. Pandya) Income-tax Officer Ward-3(2), Ahmedabad. Dated 31/12/2010." Shri S. D. Singh, learned counsel for the petitioner, submits that there is no other material or evidence in any form that any undisclosed income was either received by or accrued to the petitioner during the assessment years 2003-04 to 2009-10. In the absence of any material there was no need or any justification to assess or reassess the petitioner for the earlier periods. All the disclosures made by the assessee have already been accepted by the assessing authority under section 143(1). Just beca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CC 794 the Supreme Court held that the condition precedent for invoking a block assessment is that a search has been conducted under section 132, or documents or assets have been requisitioned under section 132A. These provisions would apply in the case of any person in respect of whom search has been carried out under section 132 or documents or assets have been requisitioned under section 132A. Section 158BD, however, provides for taking recourse to a block assessment in terms of section 158BC in respect of any other person, the conditions precedents wherefor are : (i) satisfaction must be recorded by the Assessing Officer that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 of the Act ; (ii) the books of account or other documents or assets seized or requisitioned had been handed over to the Assessing Officer having jurisdiction over such other person ; and (iii) the Assessing Officer has proceeded under section 158BC against such other person. The conditions precedent for invoking the provisions of section 158BD, thus, are required to be satisfied before the provisions of the said Chapter are applied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Officer, Ward-III(2), Ahmedabad, did not commit any error in law, in recording the satisfaction note requesting the petitioner's Assessing Officer to proceed under section 153C of the Income-tax Act. After the assessment of the person in respect of whom search action was carried out is completed, the officer under section 153C, where he find that seized articles belong to some other person, has to forward a satisfaction note to the Assessing Officer on such person. The satisfaction in such case is in respect of the material and disclosures of the person with which the articles or assets are found and not in respect of the person to whom they belong. The question which now calls for consideration is whether on receipt of satisfaction note, even if the assessing authority receiving satisfaction note has already examined account books, and has not found anything adverse against the assessee, and further seized goods have already been released in favour of the assessee, he is required to issue notice under section 153C of the Act to file returns for six years. The Department has taken a stand that even if the books of account were examined by the Assessing Officer of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
