TMI Blog2022 (9) TMI 1134X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income Tax (Benami Prohibition), but by the Investigation Wing Therefore, it cannot be said that there is violative of principles of natural justice, as alleged by the appellant. Allegation levelled by the appellant that the orders under section 24(4) were passed in total disrespect to the interim order of this court - During the course of argument, respondent drew the attention of this court to the documents enclosed in the additional typed set of papers which disclose that the Deputy Commissioner of Income Tax (Benami Prohibition) has placed the draft of section 24(4) orders before the Approving Authority for approval and after obtaining approval from the approving authority, passed the orders under section 24(4) of the PBPT Act. In the mean while, the appellant filed WP and obtained an order of interim stay which was communicated to the respondent by the learned senior standing counsel only on 25.05.2018, according to the counter affidavit filed by them. Such being the factual matrix, this court finds merit and acceptance in the contention made on the side of the respondent that the initiating officer came to aware of the order of interim stay granted by this court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.The appellant herein is the petitioner in all the aforesaid writ petitions and the case projected by him would run thus: 2.1. The appellant is an individual engaged in the business of steel and power and he is the Managing Director of M/s.Surana Industries Ltd M/s.Surana Power Ltd. He is an assessee on the file of the ACIT, Central Circle - 2(3), Chennai, in PAN No.AACPS3233K and has been regularly filing his return of income within the prescribed time. 2.2. While so, based on certain credible information, a search operation under section 132 of The Income Tax Act, 1961, (in short, the Act ) was conducted in the premises of M/s.Surana Corporation Limited and in his residence between 07.11.2017 and 11.11.2017 as per the instructions given by the Deputy Director of Income Tax (Investigation Wing). During the course of the same, several sworn statements were recorded, besides impounding documents at the time of inspection. According to the appellant, he is only a shareholder in M/s.Surana Corporation Limited and is not holding any position in the said company. 2.3. Subsequent to the search operation, the first respondent in WP.No.12848 of 2018 / respondent in other t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attachment within 90 days from the date of issuing the show cause notice, however, at the fag end of completion of 90 days i.e., on 27.05.2018, the respondent alleged that they had received certain additional information and hence, directed the appellant to submit his response. In the said circumstances, the appellant filed WP No. 12848 of 2018 praying to issue a Writ of Mandamus directing the first respondent to provide the entire set of documents referred to by him in his letters dated 23.03.2018 and 21.05.2018. 2.7. When the aforesaid writ petition was taken up for hearing, this court granted an order of interim stay on 23.05.2018 and posted the matter for further hearing on 05.06.2018. 2.8. In the mean while, the respondent passed separate orders dated 23.05.2018 under Section 24(4) of the PBPT Act, in respect of two different properties. Stating that when an order of interim stay was in force, the respondent ought not to have passed the orders dated 23.05.2018, the appellant preferred two more writ petitions viz., WP Nos.13160 and 13161 of 2018 to quash the same. 3.1. Opposing the writ petitions, the first respondent in WP.No.12848/2018 / respondent in other two writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... granted in WP.No.12848 of 2018 was communicated to the department, the draft order was put up before the approving authority on 22.05.2018 for approval in terms of section 24(4)(a)(i) and the same was passed on 23.05.2018 after getting approval. Therefore, the allegation that the first respondent passed the orders of provisional attachment of the properties dated 23.05.2018 knowing fully well about the interim order of this court, is not correct. In fact, the order dated 23.05.2018 was communicated by the learned Senior Standing Counsel and it reached the office of the first respondent only on 25.05.2018. Hence, there is no wilful negligence on the part of the first respondent in passing the orders dated 23.05.2018 under Section 24 (4) of the PBPT Act. Even otherwise, the orders dated 23.05.2018 are provisional in nature. Therefore, according to the respondent, the relief sought in the writ petitions is pre-mature and the same will have to be dismissed. 4.By order dated 02.07.2018, the learned Judge disposed of the writ petition bearing no.12848 of 2018 and dismissed the other two writ petitions viz., WP.Nos.13160 and 13161 of 2018. The relevant passage of the said order is quot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner during course of survey proceedings, within a period of one week from the date of receipt of a copy of this order and the order of interim stay granted in this writ petition is vacated. 8. For the reasons stated, above, the relief sought for in W.P.Nos.13160 13161 of 2018 cannot be granted and therefore, the writ petitions are dismissed and the order of interim stay granted in these writ petitions are vacated. 9. The adjudicating authority under the Act has issued show cause notice and fixed the hearing on 02.08.2018. It is well open to the petitioner to raise all contentions before the adjudicating authority and the matter shall be proceeded in accordance with law. 5.1. Mr. P.S. Raman, learned Senior counsel appearing for the appellant in all the writ appeals would contend that as per Section 24(4)(a)(ii) of the PBPT Act, the respondent viz., Deputy Commissioner of Income Tax (Benami Prohibition) is empowered to revoke the provisional order with the approval of the approving authority, if the appellant is able to prove his case. Such power includes investigation, calling for information, conducting enquiry etc. and to pass an order under Section 24 (4) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, while passing the order impugned in these writ appeals. It is also submitted that taking note of the fact that with a pre-conceived notion and malafide intention, the respondent proceeded to pass orders under Section 24 (4) of the Act, without furnishing the complete set of documents to the appellant, including his sworn statements, the learned Judge ought to have set aside the said orders and remanded the matter to the respondent with a direction to provide the copies of the documents sought for by the appellant, whereas, he failed to do so. Thus, the learned senior counsel sought to allow these appeals by quashing the orders impugned herein as well as in the writ petitions. 6.Per contra, the learned Senior Standing Counsel appearing for the respondent(s) would submit that as mandated under the PBPT Act, the respondent issued the show cause notices dated 26.02.2018 under Section 24(1), and provided sufficient opportunities to the appellant to make his submissions. Considering the same, the learned Judge has stated that the party cannot be said to be aggrieved as the orders of the initiating officer are only provisional in nature and full opportunity of hearing is available b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irectors of M/s. Vinayaga Infra Pvt Ltd, were recorded, which according to the appellant, are unrelated to his case. Upon receipt of the show cause notices, the appellant sought copies of the complete set of documents referred to in the show cause notices as well as the sworn statement recorded from him during the course of search. It is alleged that only a part of the documents was furnished to him. Even then, the appellant filed a preliminary written submission on 09.04.2018. While so, at the fag end of completion of 90 days from the date of issuance of show cause notices, the respondent viz., Deputy Commissioner of Income Tax (Benami Prohibition) sent a letter dated 14.05.2018 stating that additional information was received from the Investigation Wing, with respect to the proceedings under the PBPT Act, and hence, calling upon the appellant to file his reply. Stating that without the complete set of documents, the appellant was unable to file his reply to the show cause notices, he preferred WP.No.12848 of 2018 and obtained an order of interim stay on 23.05.2018. On the same day, i.e., the respondent passed orders under section 24(4) of the PBPT Act. Aggrieved over the same, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3)- (i)pass an order provisionally attaching the property with the prior approval of the Approving Authority, till the passing of the order by the Adjudicating Authority under sub-section (3) of section 26; or (ii)decide not to attach the property as specified in the notice, with the prior approval of the Approving Authority. [Explanation.- For the purposes of this section, in computing the period of limitation, the period during which the proceeding is stayed by an order or injunction of any Court shall be excluded: Provided that where immediately after the exclusion of the aforesaid period, the period of limitation referred to in sub-section (4) available to the Initiating Officer for passing order of attachment is less than thirty days, such remaining period shall be deemed to be extended to thirty days: Provided further that where immediately after the exclusion of the aforesaid period, the period of limitation referred to in sub-section (5) available to the Initiating Officer to refer the order of attachment to Adjudicating Authority is less than seven days, such remaining period shall be deemed to be extended to seven days.] ......... A read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offences committed under the provisions of PBPT Act, 1988 and hence, calling upon him to submit his reply on or before 21.05.2018. Immediately, without furnishing the complete set of documents to the appellant, the respondent passed the orders dated 23.05.2018 under section 24(4) of the PBPT Act, attaching the properties provisionally, that too, despite the order of interim stay granted in WP.No.12848 of 2018 on 23.05.2018 and the same are arbitrary, illegal and in violation of principles of natural justice. Without properly appreciating those aspects, the learned Judge erred in dismissing the writ petitions filed to quash the said orders. 11.Resisting the averments made by the appellant, the learned senior standing counsel appearing for the respondent(s) filed an affidavit of the Deputy Commissioner of Income Tax (Benami Prohibition) dated 21.06.2022, wherein it is inter alia stated as follows: ● The proceedings under section 24(1) commenced on 26.02.2018 along with a provisional attachment order under section 24(3) to prevent alienation of the property and a copy of the notice was also served to the appellant in terms of section 24(2) of the PBPT Act. ● Al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied on in the show cause notices were provided, but the sworn statement of the appellant, which was not relied on in the proceedings, was not furnished to him. After taking note of the entire aspects, the learned Judge, while disposing WP.No.12848 of 2018, directed the respondent to furnish the certified copy of the sworn statement recorded from the appellant during the course of survey proceedings, to him, within a period of one week. While doing so, the learned Judge has rightly rejected the relief sought by the appellant seeking any other sworn statements recorded during the search on 09.03.2017, as the same is absolutely vague, besides the said proceedings were not conducted by the respondent viz., Deputy Commissioner of Income Tax (Benami Prohibition), but by the Investigation Wing. It is pertinent to mention herein that applicability of the principles of natural justice and fair play, depends on the facts and circumstances of each case and is subjected to statutory provisions. In this context, it is relevant to refer to the observation of the Hon'ble Supreme Court in K.L. Tripathi v. State Bank of India and Ors. [AIR 1984 SC 273] , which reads as follows: 42. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basappa Basappa Happali v. State of Mysore. MANU/SC/0476/1970 : [1971] 2 SCR 645 In our opinion, in the background of facts and circumstances of this case, the nature of investigation conducted in which the appellant was associated, there has been no infraction of that principle. In the premises, for the reasons aforesaid, there has been in the facts and circumstances of the case, no infraction of any principle of natural justice by the absence of a formal opportunity of cross-examination Neither cross-examination nor the opportunity to lead evidence by the delinquent is an integral part of all quasi judicial adjudications. Therefore, it cannot be said that there is violative of principles of natural justice, as alleged by the appellant. 14.As regards the allegation levelled by the appellant that the orders under section 24(4) were passed in total disrespect to the interim order of this court dated 23.05.2018 in WP.No.12848 of 2018, it is to be noted that both the orders of the respondent and the interim order of this court were on the same day i.e., 23.05.2018. During the course of argument, the learned senior standing counsel appearing for the respondent drew the attentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... juncture, it would be appropriate to refer to the following decisions: In Arun Kumar Mishra v. Union of India [2014 SCC Online Del 493] , it was held by the Delhi High Court as follows: 13.We are unable to agree. The Adjudicating Authority is currently seized of and in seisin of the complaints. We, at this stage, do not know as to which way the order of the Adjudicating Authority will go. It cannot also be said at this stage whether the Adjudicating Authority even if deciding against the appellants will rely upon the material before it qua which the appellants claim a right of cross-examination. All this can be known only when the Adjudicating Authority passes an order and qua which if the appellants are aggrieved, the appellants shall have their statutory remedy. Any interference by us at this stage in the proceedings of which the Adjudicating Authority is seized is thus uncalled for and would result in a situation which the Supreme Court has warned the High Courts to avoid. Reference may also be made to U nion of India v. Kunisetty S atyanarayana AIR 2007 SC 906 reiterating that the reason why ordinarily a writ petition should not be entertained against a mere show caus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s given nor reasons were assigned in the impugned compulsory purchase order. In the present case show cause notice has been issued, opportunity has been given to the petitioner. The order impugned is provisional/tentative in nature. It is subject to judicial review by adjudicating authority. If order of adjudicating authority goes against the petitioner, the further forums of judicial review of the said order is available to the petitioner before the appellate tribunal and then before this court. Hence, against the tentative/provisional order, no interference is warranted by this court at this stage. As per the scheme of the Act, the petitioner can raise all possible grounds before the adjudicating authority. The adjudicating authority is best suited and statutorily obliged to consider all relevant aspects. Thus, at this stage no case is made out for interference. Moreso, when adjudicating authority has already fixed the hearing on 23.08.2017. Resultantly, the petition is dismissed. (Emphasis supplied) The aforesaid order got the stamp of approval by the Division Bench in WA.No.704 of 2017 decided on 16.08.2017 and the finding of the same would run thus: We do not fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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