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2014 (5) TMI 1141 - GUJARAT HIGH COURT

2014 (5) TMI 1141 - GUJARAT HIGH COURT - TMI - Validity of assessment u/s 153C - alternate remedy - availability of statutory remedies - Held that:- We are of the opinion that at this stage no interference is called for. Section 153C as is well known, pertains to assessment of income of persons other than one who is subjected to search. Subsection (1) of section 153C provides that where any Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or bo .....

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153A of the Act. - Section 158BD of the Act makes similar provisions for block assessment of undisclosed income of persons other than the searched person. Under the circumstances, the petitionerís contention that notice under section 153C of the Act could not have been issued after search operations were over cannot be accepted. - We are not inclined to entertain the writ petition in view of the availability of statutory remedies. Since we relegate the petitioners to remedies under the s .....

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r short). The petitioner has also challenged the reference made by the Assessing Officer on 31.7.07 to respondent No.2 the District Valuation Officer to opine on the valuation of certain immovable properties of the petitioner to ascertain the investment made by the petitioner in such properties. The petitioner is a firm engaged in the business of civil construction. The petitioner regularly files its return. Search operations were carried out by the Income Tax Department on 7.3.2006 in cases of .....

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Act in which it was stated as under: A search u/s 132 of the I.T. Act was conducted in the case of Rajhans Group & others on 07/03/2006. Whereas I am satisfied that money/bullion/jewellery/other valuable articles or things and/or books of account/documents seized belongs to you. Therefore, your income of six assessment years immediately preceding the assessment year relevant to previous year in which the search was conducted i.e. from A.Y. 2000-01 to A.Y. 2005-06 is required to be assessed/ .....

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40 of the said Act and delivered at my office as mentioned above within FIFTEEN DAYS from the service of this notice. It is this notice that the petitioner has challenged in he present petition. At our request, learned counsel for the Revenue had made available the satisfaction note recorded by respondent No.1 for issuing the impugned notice in which it is stated as under: A search and seizure action under section 132(1) in the cases of Rajhans Group was carried out on 7/3/2006 by the investigat .....

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.25 crore. Subsequently, the assessee group i.e. Rajhans Group concerns and its individuals vide their letter dated 31/03/2006 addressed to the Asstt. Director of Income tax (Investigation) submitted the breakup of the disclosure made by him. The relevant extract of the letter is reproduced below: In this connection and with reference to the survey conducted u/s.133A of the I.T.Act, 1961 at our all business places of our group project sites and search carried out u/s.132 of the I.T.Act, 1961 at .....

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with this letter is made by us on behalf of all group concerns and individuals of the Rajhans Group. From the breakup of disclosure filed by the assessee it can be seen that the partners had declared an amount of ₹ 1,00,00,000/in the hands of M/s.Rajhans Builders (R.F.). It could be seen from the records that the assessee had undertaken six different projects under the banner of Rajhans Builders right from the period 1999-2000 which ended up in the year 2005/2006. Since the period of const .....

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f the I.T.Act which includes the unaccounted income of ₹ 1 crore was ;admittedly made by the assessee to cover all loose papers/diaries and various other papers documents, and in the light of the fact that no action under section 132/133A was taken place in the case of the assessee, and also taking into account the nature of business of constructions which involves the expenses/investment for along period, and in the absence of specific year of disclosure, I am satisfied that this is a fit .....

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venue opposed the petition contending that respondent No.1 after recording his satisfaction that on the basis of the documents seized during the search carried out against Rajhans Group of Companies, unaccounted income belonged to the assessee was unearthed, issued the impugned notice. At this stage, therefore, the court would not interfere. We are of the opinion that at this stage no interference is called for. Section 153C of the Act, as is well known, pertains to assessment of income of perso .....

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son and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A of the Act. Section 158BD of the Act makes similar provisions for block assessment of undisclosed income of persons other than the searched person. In context of section 158BD of the Act, the Apex Court in the case of CIT v. Calcutta Knitwears, 362 ITR 673 (SC) held and observed as under .....

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ngs under section 158BC of the Act; and (c) immediately after the assessment proceedings are completed under section 158BC of the Act of the searched person. Under the circumstances, the petitioner s contention that notice under section 153C of the Act could not have been issued after search operations were over cannot be accepted. With respect to the validity of the notice itself, at this stage, we are not inclined to examine the same in view of the decisions of the Supreme Court in the case of .....

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for issuing notice under section 153C was not fulfilled. In this context, the Supreme Court held that the assessee could not have invoked the writ jurisdiction without first exhausting the alternative remedies provided under the Act and the High Court ought not to have entertained the writ petition. It was observed as under: 14. In our considered view, at the said stage of issuance of the notices under Section 153C, the assessee could have addressed his grievances and explained his stand to the .....

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st 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. This Court further observed as follows: 3.…In the circumstances, we could have dismissed these civil appeals only on the ground of failure to exhaust statutory remedy, but for the fact that huge investments involving the large number of industries is in issue. 15. We are fortified by the decision of this Court in Ind .....

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ons: 5. This and the other facts cannot be taken up for consideration by this Court for the first time. In our opinion, the High Court was right in coming to the conclusion that it is appropriate for the appellants to file a reply to the show-cause notice and take whatever defence is open to them. 16. In the present case, the assessee has invoked the Writ jurisdiction of the High Court at the first instance without first exhausting the alternate remedies provided under the Act. In our considered .....

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