1999 (8) TMI 30 - HC - Income Tax

Court quashes tax summonses lacking jurisdiction; ruling favors petitioners.

The court quashed the summonses issued by Income-tax Officers for production of documents and penalties under various tax Acts, as they were deemed to ... - Issues Involved:The legality and jurisdiction of summonses issued by Income-tax Officers under sections 131/37/36 of the Income-tax Act, 1961/Wealth-tax Act, 1957/Gift-tax Act, 1958 for production of documents and imposition of penalties.Summary:The petitioners challenged the summonses issued by Income-tax Officers without jurisdiction and application of mind, as no proceedings were pending under the mentioned Acts. The summonses were seen as a fishing enquiry for non-deduction of tax at source, lacking proper application of mind and jurisdiction. Despite notices and hearings, the Revenue did not respond or challenge the petitioners' contentions.The summonses issued were found to be incomplete and demonstrated a lack of application of mind by the Income-tax Officers. The summonses did not specify the Act under which they were issued, and the powers under section 131 were deemed to be applicable only for pending proceedings under the Act. The petitioners' challenge to the summonses was not addressed by the Income-tax Officers, who directed compliance under penalty threats.As the Revenue did not challenge the petitioners' contentions or attend hearings, the court quashed the summonses and related notices due to the lack of response and non-compliance. The writ petition was allowed with no costs imposed.