TMI Blog2024 (2) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... shown to form part of the books of accounts regularly maintained by the assessee or his business entities, do not constitute material evidence. Following the law declared by the Hon'ble Apex Court, we are of the view that the action taken by the respondent / Revenue against the Assessee based on the material contained in the diaries/loose sheets, are contrary to the law declared by the Hon'ble Apex Court. In that view of the matter, impugned notices issued under Section 153C of the Act, based on the loose sheets/diaries are contrary to law, which require to be set aside in these writ appeals, as the same are void and illegal. Whether Centralization is in violation of Section 127 of the Income Tax Act, 1961, is valid? - officer of Bangalore Judicature sent Notice and Assessment order to the resident of Delhi - As per section 127 of the IT Act, before transferring the cases, a reasonable opportunity must be provided to the Assessee, which is evaded as per the papers provided herein, furthermore officer of Bangalore Judicature should not have sent Notice and Assessment order to the respondent who is a resident of Delhi which is in total violation of section 127 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utory remedies, unless the High Court finds that factual disputes are involved and it would not be desirable to deal with them in a writ petition. The learned Single Judge had referred to a plethora of decisions which were facilitated on behalf of the petitioners and respondent / Revenue and the same decisions have been referred to even in the present writ appeals. In the given facts and circumstances of the matter, it is relevant to refer to the case of NISHANT CONSTRUCTION (P) LTD. [ 2017 (3) TMI 1048 - ITAT AHMEDABAD ] wherein it is held that, in the absence of any corroborative evidence, loose sheet can at the most be termed as dumb document which did not contain full details about the dates, and its contents were not corroborated by any material and could not be relied upon and made the basis of addition. Reliance can also be placed on the judgment of the Panaji Bench of ITAT in the case of ABHAY KUMAR BHARAMGOUDA PATIL [ 2018 (9) TMI 209 - ITAT PANAJI wherein the judgment of the Apex Court was relied upon. In the instant case, the first issue raised by the Revenue is as regards the addition of income made by the Assessing Officer based on loose sheets found in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RAI K For the Appellants : (By Sri. Balbir Singh The Then ASG; Sri. Y V Raviraj - Advocate) For the Respondent : (By Sri Kiran S Javali Sr. Counsel For Sri. Sreehari Kutsa Advocate For C/Respondent) (By Sri A Mahesh Chowdhary Advocate) JUDGMENT K. SOMASHEKAR J., These appeals have been preferred by the Deputy Commissioner of Income Tax, Circle 1(4) (for short Revenue ), challenging the common order dated 12.08.2022 passed by a learned Single Judge of this Court in W.P. No. 9937/2022 and connected matters. All these appeals are directed against one Shri Sunil Kumar Sharma who is the respondent in W.A. Nos. 830/2022, 831/2022, 832/2022 and 833/2022 and one Shri Kandaswamy Rajendran who is the respondent in W.A. No. 834/2022. The respondents shall hereinafter be referred to as the assessee for brevity. 2. Since all these appeals which have been preferred by the Revenue arise out of a common order dated 12.08.2022 rendered by a learned Single Judge in W.P. No. 9937/2022 and connected petitions, they are heard together and are disposed of by this common order. 3. Heard the arguments advanced by the then learned Addl. Solicitor General Shri Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incriminating material and other material gathered post search investigation, the Assessing Officer concluded the assessment by its order dated 31.12.2019. The assessee challenged the said order by preferring an appeal as on 30.01.2020 before the Commissioner of Income Tax, Appeals, which appeal is pending consideration. In view of the fact that the said appeal was still pending consideration, the assessee is said to have preferred writ petitions as on 23.05.2022 challenging the notice and the order of assessment. 6. Respondents / Assessee, while urging the aforementioned aspects, questioned the impugned notices calling upon Assessee herein to submit his returns of income for the Assessment Year 2015-2016, as without jurisdiction. The main grievance of the respondents is that impugned notices under Section 153C of the Act is to be issued on other person and the respondents being searched person , the impugned notice under Section 153C of the Act is not maintainable. Hence, the impugned order by the Commissioner of Income Tax in the CIT(A) was challenged through Writ Petition No. 9937/2022 connected matters before a learned Single Judge of this High Court. Further, aggrieved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice. The learned Single Judge though has remanded the matter for de novo enquiry, in view of setting aside the notice under Section 153C of the IT Act, the result is that there are no proceedings pending before the Assessing Officer and in view of the same, the order of remand cannot be given effect to and it would only remain a futile exercise. Being aggrieved by the same, it is contended that the Revenue has preferred the appeals on various grounds. 9. The then learned ASG contends that after the appearance of the Revenue, no arguments were addressed on behalf of the Assessee. Since the learned Single Judge had indicated that the Revenue was to argue regarding the order of assessment being passed without considering the law laid down by the Hon ble Supreme Court in the case of CBI vs. V.C. SHUKLA ((1998 3 SCC 410)) and COMMON CAUSE vs. UNION OF INDIA ((2017) 11 SCC 731)) , the arguments were addressed by the Revenue only on the said issue. However, the learned Single Judge has proceeded to address various other issues raised in the writ petitions which were not at all argued, without considering the Statement of objections filed by the Revenue in response to the content ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place. Thus, it is contended by the then learned Addl. ASG that since the assessee prior to transfer of jurisdiction under Section 127 of the IT Act was assessed in Bangalore and after transfer of jurisdiction under Section 127 of the IT Act also, the assessee jurisdiction remains in Bangalore only. Hence, the order of the learned Single Judge is without proper appreciation of the facts aspects, which is liable to be set aside. 13. It is further pointed out that the objection filed by the assessee dated 18.11.2019 for issuance of notice under Section 153C of the IT Act was disposed of on 28.11.2019. Subsequently, the assessee participated in the assessment proceedings and the same came to be concluded by order dated 31.12.2019. It is contended that in view of Section 124(3)(c) of the IT Act, the assessee is not entitled to question the jurisdiction of the Assessing Officer, after expiry of one month from the date of notice or assessment order, whichever is earlier. Though specific contention has been raised on this issue, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents. Even if it is to be assumed for the sake of arguments that the loose sheets would not fall within the ambit of books of accounts, undoubtedly the same would fall within the ambit of documents. Hence the finding of the learned single judge that the diary / loose sheets will not fall within the ambit of books of accounts is incorrect. 17. Without prejudice to the above contention it is further submitted that in terms of the law laid down by the Hon ble Supreme Court which has been relied on by the learned single judge, in the case of VC Shukla and Common Cause, the seized diary would fall within the ambit of books of accounts and holding the diary as not admissible evidence is contrary to the law laid down by the Hon ble Supreme Court. On all these grounds, learned counsel for the appellant / Revenue prayed to allow the appeals and thereby to set aside the order of the learned Single Judge. 18. The Respondents in this Writ Appeal entered appearance and vehemently contended that the Appellant / Revenue Authorities have concluded that the income that has escaped assessment and notice under Section 153C of the Income Tax Act, 1961 are solely issued on loose sheets an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, the learned counsel has relied upon by the following Judgements namely, PCIT V. ASSOCIATE MINING CO. 417 ITR 420 (KAR) which lays down the essential conditions to comply before serving the Notice under Section 153C of Income-tax Act, 1961, and in the judgment of SUPER MALLS (P.) LTD V. PCIT 8, NEW DELHI (2020) 115 TAXMAN.COM 105(SC). 21. Both the Appellant-Revenue and Respondent-Assessee entered appearance and submitted their arguments extensively. On hearing the learned counsel for both the parties, this Court finds it relevant to examine the following questions that arises for consideration in these writ appeals, which are as under: 1) Whether Loose Sheets and Diary have any evidentiary value? 2) Whether Centralization is in violation of Section 127 of the Income Tax Act, 1961, is valid? 3) Whether the Notice under Section 153C of the Income Tax Act, 1961 is valid herein? As regards Question No. 1: Upon reading the material provided and the order of the learned Single Judge delivered on 12.08.2022, it is evident that the income that has escaped assessment and notices under Section 153C of the Income Tax Act, 1961, were solely issued based ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loose sheets by the respondent-Revenue. In the case of CBI Vs. VC SHUKLA (MANU/SC/0168/1998), at paragraphs 16 to 18 of the judgment, it is observed thus: 16. To appreciate the contentions raised before us by the learned counsel for the parties it will be necessary at this stage to refer to the material provisions of the Act. Section 3 declares that a fact a relevant to another when it is connected with the other in any of the ways referred to in the provisions of the Act relating to the relevancy of facts; and those provisions are to be found in Section 6 to 55 appearing in Chapter II. Section 5, with which Chapter II opens, expressly provides that evidence may be given in any suit or proceeding of the existence or non-existence of every fact in issue and the facts declared relevant in the aforesaid section, and of no others. Section 34 of the Act reads as under:- 34. Entries in books of account when relevant - Entries in book of account, regularly kept in the course of business, are relevant whenever they refer to a matter into which the court has to inquire but such statements shall not alone be sufficient evidence to charge any person with liability. 17. F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of paper in whatever quantity, though filled up with one continuous account, are not a book of account within the purview of S.34. 24. The aforesaid approach is in accordance with good reasoning and we are in full agreement with it. Applying the above tests, it must be held that the two spiral note books (MR 68/91 and 71/91) and the two spiral pads (MR 69/91 and MR 70/91) are books within the meaning of Section 34, but not the loose sheets of papers contained in the two files (MR 72/91 and MR 73/91). 25. The Hon'ble Supreme Court in the case of COMMON CAUSE AND OTHERS v. UNION OF INDIA, reported in (2017) 11 SCC 731 , at paragraphs 278 to 282 of the judgment, has observed thus: 278. With respect to the kind of materials which have been placed on record, this Court in V.C. Shukla case has dealt with the matter though at the stage of discharge when investigation had been completed by same is relevant for the purpose of decision of this case also. This court has considered the entries in Jain Hawala Diaries, note books and file containing loose sheets of papers not in the form of books of accounts and has held that such entries in loose papers/sheets are ir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound that they were neither books of account nor they were regularly kept in the course of business. he submitted that at best it could be said that those books were memoranda kept by a person for his own benefit. According to Mr. Sibal, in business parlance 'account' means a formal statement of money transactions between parties arising out of contractual or fiduciary relationship. Since the books in question did not reflect any such relationship and, on the contrary, only contained entries of monies received from one set of persons and payment thereof to another set of persons it could not be said, by any stretch of imagination that they were books of account, argued Mr. Sibal. He next contended that even if it was assumed for argument's sake that the above books were books of account relating to a business still they would not be admissible under Section 34 as they were not regularly kept. It was urged by him that the words 'regularly kept' mean that the entries in the books were contemporaneously made at the time the transactions took place but a cursory glance of the books would show that the entries were made therein long after the purported transactions t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Following the law declared by the Hon'ble Apex Court, we are of the view that the action taken by the respondent / Revenue against the Assessee based on the material contained in the diaries/loose sheets, are contrary to the law declared by the Hon'ble Apex Court. In that view of the matter, impugned notices issued under Section 153C of the Act, based on the loose sheets/diaries are contrary to law, which require to be set aside in these writ appeals, as the same are void and illegal. 27. As regards the further question as to, 2) Whether Centralization is in violation of Section 127 of the Income Tax Act, 1961, is valid: On a perusal of the writ papers, it indicates that the Appellant / Revenue conducted a search at the premises of one Sri Rajendran at New Delhi and recovered certain diaries/loose sheets, which purportedly consisted certain entries relating to the affairs/transactions of the assessee. Based on the statement of the said Sri Rajendran (Petitioner in Writ petition No. 9946 of 2022) recorded during the investigation, Appellant/Revenue initiated action against the assessee / Sunil Kumar Sharma. In this regard, the Appellant/Revenue, by exercising powe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plied) 29. As per section 127 of the IT Act, before transferring the cases, a reasonable opportunity must be provided to the Assessee, which is evaded as per the papers provided herein, furthermore officer of Bangalore Judicature should not have sent Notice and Assessment order to the respondent who is a resident of Delhi which is in total violation of section 127 of the Act. These points are transpired from the following Judgments: i) M/S AJANTHA INDUSTRIES ORS VS CENTRAL BOARD OF DIRECT TAXES, NEW DELHI ORS ((1976) 1 SCC 1001)): Once an order is passed transferring the case file of an assessee to another area the order has to be communicated. Communication of the order is an absolutely essential requirement since the assessee is then immediately made aware of the reasons which impelled the authorities to pass the order of transfer. (Para 9) Under Section 127(1) the reason for recording of reasons in the order and making these reasons known to the assessee is to enable an opportunity to the assessee to approach the High Court under its writ jurisdiction under Article 226 of the Constitution or even the Supreme Court under Article 136 of the Constitution in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years referred to in sub-section (1) of section 153A: Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the 'other person' iii) Such documents found must be incriminating material to invoke proceedings against the other person As the title enunciates, Assessment of income of any other person , no search is sine qua non for issuance of proceedings under Section 153C of the Income Tax Act, 1961. The searched person in the instant case is the petitioner, as the search was conducted in his premises, which is evident from the Panchanama. The distinction between searched person and other person is misinterpreted in the case advanced by the Appellant-Revenue, as the premises of the Respondent was searched and documents pertaining to him were seized, thereby making him the searched person. The stipulated conditions have not been satisfied in the instant case. 31. It is relevant to refer to a judgment in the case of SUPER MALLS (P.) LTD VS PRINCIPAL COMMISSIONER OF INCOME TAX 8, (MANU/SC/0724/2020), wherein the Apex court has dealt with the proposition in detail, which reads thus: 5. We have heard the learned Counsel for the respective parties at length. 5.1. As observed hereinabove, the short question which is posed for the consideration of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y observed and held by the Delhi High Court in the case of Ganpati Fincap (supra), the same is for the administrative convenience and the failure by the Assessing Officer of the searched person, after preparing and dispatching the satisfaction note and the documents to the Assessing Officer of the other person, to make a note in the file of a searched person, will not vitiate the entire proceedings Under Section 153C of the Act against the other person. At the same time, the satisfaction note by the Assessing Officer of the searched person that the documents etc. so seized during the search and seizure from the searched person belonged to the other person and transmitting such material to the Assessing Officer of the other person is mandatory. However, in the case where the Assessing Officer of the searched person and the other person is the same, it is sufficient by the Assessing Officer to note in the satisfaction note that the documents seized from the searched person belonged to the other person. Once the note says so, then the requirement of Section 153C of the Act is fulfilled. In case, where the Assessing Officer of the searched person and the other person is the same, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titions challenging the action of the Revenue as non-est and contrary to law. 34. In the aforesaid writ petitions, the respondent / Revenue entered appearance and filed objection, and contended that proceedings have been initiated against the petitioners under Section 153C of the Act, based on the material found and seized by the Enforcement Directorate. Further, the writ petition was not maintainable as the impugned order passed in the writ petition is appealable before the Commissioner of Income Tax-Appeals, which is an efficacious remedy for the petitioners. Hence, the Revenue sought to dismiss the writ petitions as premature. It was further contended that the officer authorised under Section 132 of the IT Act, is empowered to enter and search any building, place, vessel, vehicle or Aircraft where he has reason to suspect such books of account, other documents, money, etc. Further that Section 132 of the Act, empowers seizure or books of account/document not only relatable to searched person, however, in relation to other person also. The Assessing Officer, after compliance of the pre-conditions of recording statement after satisfaction, issued notice under Section 153C of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved around scribbling of loose sheets seized from premises of another person (Sri Rajendran) and therefore, learned Senior Counsel argued that the action taken by respondent No. 1 is contrary to the law declared by the Apex Court in the case of CENTRAL BUREAU OF INVESTIGATION v. V.C. SHUKLA AND OTHERS, reported in (1998)3 SCC 410 and in the case of COMMON CAUSE AND OTHERS v. UNION OF INDIA, reported in (2017)11 SCC 731 and accordingly, sought for quashing of impugned notices. 36. Further, learned Senior Counsel argued that satisfaction note is required under Section 153C of the Act for each Assessment Year and in the impugned proceedings, consolidated satisfaction note has been recorded for different Assessment Years which vitiates entire assessment proceedings. In this regard, he placed reliance on the judgment of the Hon ble Apex Court in the case of L K VERMA v. HMT AND ANOTHER, reported in (2006)2 SCC 269 and in the case of JEANS KNIT PVT LTD v. COMMISSIONER OF INCOME TAX, reported in (2017)390 ITR 10 (SC) and argued that this Court is having jurisdiction to interfere with the impugned notices issued by the Revenue as the same is without jurisdiction and hence sought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion as to assets, books of account etc. in certain cases and further argued that, as the Respondent-Revenue found incriminating material at the time of search and seizure made at the residence at Delhi, whereby the involvement of the petitioner was forthcoming in the note sheet/diaries and therefore, learned Additional Solicitor General contended that the judgments referred to by the learned Senior Counsel appearing for the petitioner, viz. V.C. SHUKLA (supra) and in the case of COMMON CAUSE AND OTHERS (supra) are not applicable to the facts of the present case. Emphasizing on these aspects, he referred to the judgment of the Apex Court in the case of V.C. SHUKLA (supra) and argued that the factual aspects in the said case is quite different from the present case and accordingly, it was argued that Section 34 of the Indian Evidence Act, 1872 is not applicable to the facts of the present case. 39. Shri Balbir Singh, learned Additional Solicitor General, further argued that Section 132 of the Act is a Code in itself which provides for search and seizure by the respondent-Revenue as the authorities, based on the incriminating material, have reason to believe in the custody of defau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed and analysed. Therefore, it is once again reiterated that the entries in the diaries seized from the premise of Mr. Rajendran contain details of hawala transactions from the directions of Mr. Sunil Kumar Sharma. Therefore, quantification of unexplained to be taxed under Section 69A of the Act as per discussions above is Rs. 40 lakh for AY-2015-16. (emphasis supplied) 41. The learned Single Judge had also referred to the celebrated decision of the Hon'ble Apex Court in the case of TATA CELLULAR v. UNION OF INDIA reported in (1994)6 SCC 651. Though the matter pertained to the action of the Administrative Authority, it was held that the ratio laid down by the Hon'ble Apex Court in the said judgment is aptly applicable to the facts of the case on hand. The relevant Paragraphs 74 to 81 of the said judgment reads thus: 74. Judicial review is concerned with reviewing not the merits of the decision in support of which the application for judicial review is made, but the decision- making process itself. 75. In Chief Constable of the North Wales Police v. Evans (1982) 3 All ER 141, 154 Lord Brightman said : Judicial review, as the words imply, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he court will, under the guise of preventing the abuse of power, be itself guilty of usurping power. 77. The duty of the court is to confine itself to the question of legality. Its concern should be : 1. Whether a decision-making authority exceeded its powers? 2. Committed an error of law, 3. Committed a breach of the rules of natural justice, 4. Reached a decision which no reasonable tribunal would have reached or, 5. Abused its powers. Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfilment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under: (i) Illegality : This means the decision- maker must understand correctly the law that regulates his decision-making power and must give effect to it. (ii) Irrationality, namely, Wednesday unreasonableness. (iii) Procedural impropriety. The above are only the broad grounds but it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as between different classes, if they were manifestly unjust, if they disclosed bad faith, or if they involved such oppressive or gratuitous interference with the rights of citizens as could find no justification in the minds of reasonable men. Lord Russell emphasised that a bye-law is not unreasonable just because particular judges might think it went further than was prudent or necessary or convenient. In 1947 the Court of Appeal confirmed a similar approach for the review of executive discretion generally in Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn. This case was concerned with a complaint by the owners of a cinema in Wednesbury that it was unreasonable of the local authority to licence performances on Sunday only subject to a condition that 'no children under the age of 15 years shall be admitted to any entertainment whether accompanied by an adult or not'. In an extempore judgment, Lord Greene, M.R. drew attention to the fact that the word 'unreasonable' had often been used in a sense which comprehended different grounds of review. (At p. 229, where it was said that the dismissal of a teacher for having red hair (cited by Warrington ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity properly directing itself on the relevant law and acting reasonably could have reached it. (Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn. 3 1, per Lord Greene, M.R.) 81. Two other facets of irrationality may be mentioned. (1) It is open to the court to review the decision-maker's evaluation of the facts. The court will intervene where the facts taken as a whole could not logically warrant the conclusion of the decision-maker. If the weight of facts pointing to one course of action is overwhelming, then a decision the other way, cannot be upheld. Thus, in Emma Hotels Ltd. v. Secretary of State for Environment34, the Secretary of State referred to a number of factors which led him to the conclusion that a non-resident's bar in a hotel was operated in such a way that the bar was not an incident of the hotel use for planning purposes, but constituted a separate use. The Divisional Court analysed the factors which led the Secretary of State to that conclusion and, having done so, set it aside. Donaldson, L.J. said that he could not see on what basis the Secretary of State had reached his conclusion. (2) A decision would be regarded as unreasonable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt made therein shall not along be sufficient evidence to charge any person with liability. It is thus seen that while the first part of the section speaks of the relevancy of the entry as evidence, the second part speaks, in a negative way, of its evidentiary value for charging a person with a liability. It will, therefore, be necessary for us to first ascertain whether the entries in the documents, with which we are concerned, fulfil the requirements of the above section so as to be admissible in evidence and if this question is answered in the affirmative then only its probative value need be assessed. 18. Book ordinarily means a collection of sheets of paper or other material, blank, written, or printed, fastened or bound together so as to form a material whole. Loose sheets or scraps of paper cannot be termed as 'book' for they can be easily detached and replaced. In dealing with the work 'book' appearing in Section 34 in Mukundram vs. Dayaram [AIR 1914 Nagpur 44], a decision on which both sides have placed reliance, the Court observed:- In its ordinary sense it signifies a collection of sheets of paper bound together in a manner which cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nable on the ground of alternative remedy and delay and laches is concerned, taking into consideration the fact that the impugned notices and the orders passed by the Revenue are contrary to the law declared by the Hon'ble Apex Court referred to above, in that view of the matter, it is trite law that the acceptance of writ petitions, despite having alternative remedy, is a rule of practice and not of jurisdiction and in this regard, the Division Bench of this Court in the case of U.M. RAMESH RAO AND OTHERS v. UNION OF INDIA reported in 2021(3) AKR 345 at paragraphs 40 and 41 of the judgment has observed thus: 40. The following judgments of the Hon'ble Supreme Court on the aspect of maintainability of a writ petition under Article 226 of the Constitution in the face of an alternative remedy are referred to as under: (a) In Veerappa Pillai vs. Raman and Raman Ltd.., [AIR 1952 SC 192], it was observed that where a particular statute provides a self-contained machinery for determination of questions arising under the Act, the remedy that is provided under the Act should be followed except in cases of acts, which are wholly without jurisdiction or in excess of ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions, one of which is, if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But, the availability of an alternative remedy has been consistently held not to operate as a bar in at least four contingencies, namely, where the writ petition has been filed for the enforcement of any of the Fundamental Rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged. In the said decision, reliance was also placed on Rashid Ahmad vs. Municipal Board, Kairana, [AIR 1950 SC 163], (Rashid Ahmad), to observe that where alternative remedy existed, it would be a sound exercise of discretion to refuse to interfere in a petition under Article 226 of the Constitution. This proposition was, however, qualified by the significant words, unless there are good grounds therefor , which indicated that alternative remedy would not operate as an absolute bar and that writ petition under Article 226 of the Constitution could still be entertained in exceptional circumstances. Reference was also made to State of U.P. v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re if there is an adequate, efficacious, alternative remedy. If somebody approaches the High Court without availing the alternative remedy, the High Court should ensure that he has made out a strong case or that there exist good grounds to invoke the extraordinary jurisdiction. The Court, in extraordinary circumstances, may exercise the power if it comes to the conclusion that there has been a breach of principles of natural justice or procedure required for decision has not been adopted. The rule of exclusion of writ jurisdiction by availability of alternative remedy is a rule of discretion and not one of compulsion and the Court must consider the pros and cons of the case and then may interfere. However, there are well recognized exceptions to the doctrine of exhaustion of statutory remedies. First is, when the proceedings are taken before the forum under a provision of law which is ultra vires, it is open to a party aggrieved thereby to move the High Court for quashing the proceedings on the ground that they are incompetent without a party being obliged to wait until those proceedings run their full course. Secondly, the doctrine has no application when the impugned order h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the availability of a statutory remedy of appeal to the National Company Law Appellate Tribunal (NCLAT) and if so, under what circumstances. In the said case, there is an exposition on the well recognised exceptions to the self-imposed restraint of the High Courts, namely, in cases where a statutory alternative remedy of appeal is available, or there is lack of jurisdiction on the part of the statutory/quasi-judicial authority against whose order judicial review is sought. It was observed that an error of jurisdiction was always distinguished from in excess of jurisdiction , till the judgment of the House of Lords in Anisminic Ltd. Vs. Foreign Compensation Commission [(1969) 2 WLR 163] (Anisminic). In Anisminic, the real question was not, whether, an authority made a wrong decision but whether they enquired into and decided a matter on which they had no right to consider. It was observed by the Hon'ble Supreme Court that just four days before the House of Lords delivered the judgment in Anisminic, an identical view was taken by a three judge Bench of the Hon'ble Supreme Court in West Bengal Others vs. Sachindra Nath Chatterjee Another, [(1969) 3 SCR 92], ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the mining lease. (d) Learned Senior counsel appearing for the respondent in Writ Appeal No. 538 of 2020 placed reliance on Authorised Officer, State Bank of Travancore and another vs. Mathew K.C. [(2018) 3 SCC 85] , (Mathew K.C.) wherein it was observed that SARFAESI Act is a complete Code by itself, providing for expeditious recovery of dues arising out of loans granted by financial institutions. The remedy of appeal by the aggrieved under Section 17 before the Debt Recovery Tribunal, followed by a right to appeal before the Appellate Tribunal under Section 18 was adequately provided under the Act. Therefore, the High Court ought not to have entertained the writ petition in view of the adequate alternative statutory remedies available. In that case, an interim order granted by the High Court in exercise of jurisdiction under Article 226 of the Constitution, staying further proceedings at the stage of Section 13(4) of the SARFAESI Act, on certain deposit to be made was questioned. It was observed that the writ petition ought not have been entertained and interim order granted for the mere asking without assigning special reasons, that too, without even granting opport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court opined that Section 34 of the SARFAESI Act clearly bars filing of a civil suit. No civil court can exercise jurisdiction to entertain any suit or proceeding in respect of any matter which a DRT or DRAT is empowered by or under the Act to determine and no injunction can be granted by any court or authority in respect of any action taken or to be taken in pursuance of any power conferred by or under the Act. 45. In the given facts and circumstances of the case and also issues involved between the Revenue and the assessee respectively, normally, the High Court should not entertain writ petitions unless it is shown that there is something more in a case, something going to the root of the jurisdiction of the officer, something which would show that it would be a case of palpable injustice to the writ petitioner to force him to adopt the remedies provided by the statute. But, if the High Court had entertained a petition despite availability of an alternative remedy, it would not be justifiable for the High Court to dismiss the same on the ground of non-exhaustion of statutory remedies, unless the High Court finds that factual disputes are involved and it would not be desirab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Notice dated 22nd August, 2019 were quashed and further proceedings thereof were quashed by remanding the matter to the respondent-Revenue to reconsider the issue afresh in terms of the discussion made above. 48. In the given facts and circumstances of the matter, it is relevant to refer to the case of NISHANT CONSTRUCTION (P) LTD. Vs. ACIT (ITA NO. 1502/AHD/2015), wherein it is held that, in the absence of any corroborative evidence, loose sheet can at the most be termed as dumb document which did not contain full details about the dates, and its contents were not corroborated by any material and could not be relied upon and made the basis of addition. Reliance can also be placed on the judgment of the Panaji Bench of ITAT in the case of ABHAY KUMAR BHARAMGOUDA PATIL vs. ASSTT. CIT ((2018) 96 taxmann.com 377)), wherein the judgment of the Apex Court was relied upon. 49. It is further relevant to refer to a Co-ordinate Bench decision of this Court rendered in the case of PRINCIPAL COMMISSIONER OF INCOME-TAX vs. SMT. G. LAKSHMI ARUNA ((2023) 150 taxmann.com 107 (Karnataka)) 31.03.2023 , in which judgment, this Court has extensively addressed the scope of Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice issued under Section 153C of the IT Act in respect of the Assessment year 2018-19 is not applicable, which is also supported by various judgments of the High Court. Further, the notice as regards the Assessment years 2015-16, 2016-17 and 2017-18 are also not applicable, as the total addition of income were made on the basis of loose sheets. Further, the panchanama or mahazar of all the loose sheets said to have been seized from the house of Shri Rajendran, are now unavailable and the learned counsel for the Revenue has no answer for the same. On these premise, the assessment order made for the Assessment years 2015-16, 2016-17, 2017-18 and 2018-19 requires to be quashed. 52. Insofar as the contention as regards cash of Rs. 6.68 having been found in Premises No. B5/201, Safdarjang Enclave, New Delhi during search, as per Section 292C of the IT Act, the presumption in law is that the cash seized belongs to the owner of the house from where it was seized. However, as regards the said cash which was found, the respondent / assessee had filed his Income Tax Return including the said cash as advance tax, and the same was also accepted by the Income Tax Department. Even the cro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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