TaxTMI 
TaxTMI 
1991 (8) TMI 62
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....wn as Continental Construction Pvt. Ltd. The petitioner held certain shares therein. For the assessment year 1973-74, a return was filed on August 20, 1973. Thereafter, a revised return was filed on January 1, 1975. Ultimately, the return was accepted and an assessment was made under section 16(1) of the Act. In respect of the assessment year 1974-75, a return was similarly filed by the petitioner and an assessment was made under section 16(1) of the Act. After the assessments had been made, notices were sent under section 17 seeking to reopen the said assessments. In order to appreciate the challenge to these two notices it will be helpful to refer to the two facts relating to the two assessment years, namely, 1973-74 and 1974-75, in....
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....iven which indicated that the value of the shares was Rs. 21,250. Interpolation could only be possible by changing Rs. 21,250 to Rs. 27,250, but the corresponding interpolation in the other figure could not take place. During the course of the proceedings, it appears that a statement of wealth, as on March 31, 1973, was, filed. The reason for interpolation becomes apparent from it. In this statement, the petitioner valued 200 equity shares at the market rate of Rs. 30 each and had shown the total value at Rs. 6,000. The petitioner also had 250 preference shares which he valued at the rate of Rs. 85 per share which came to the value of Rs. 21,250. The total value of the equity and preference shares, therefore, came to Rs. 27,250. It is cl....
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....6(1). These orders are both dated November 30, 1978. The contention on behalf of the petitioner is that notices under section 17 were bad in law because the said notices were issued because of change of opinion. In the writ petition, it is further averred that notices which were issued under section 17 were served on Shri S. L. Batra, chartered accountant, and A. K. Jain, an employee of the company, and that was not a proper service. The grievance was that none of these two persons were authorised representatives of the petitioner. It is a cardinal principle of writ jurisdiction that the petitioner must approach the court with clean hands. If false statements are made in the writ petition or misleading or incomplete facts are stated, ....
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....and is further guilty of misstating the fact, namely, when it is averred that the notice was served on Shri A. K. Jain. It is an admitted fact that, for the purpose of reopening an assessment, the Wealth-tax Officer will assume jurisdiction only by the issuance of a valid notice under section 17. Whether there has been a proper service or not amounts to determination of a jurisdictional fact. When a wrong statement is made with regard thereto, the attempt obviously is to mislead the court on an important issue. On this ground alone, the petitioner would not be entitled to any relief. It has further been stated in the writ petition that, in the return of wealth, the petitioner had valued the shares of Continental Construction P. Ltd. at R....
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....theless, one can safely presume that this attempt to alter the figure was with a view to subsequently contend that, in the original return, the petitioner had disclosed the value of 200 equity shares at the rate of Rs. 30 each. In normal circumstances, this could only have been after issuance of section 17 notice with a view to make out a case that the Department is reopening the assessment only because of the change of opinion and for no other reason. If the petitioner had disclosed the value of the shares, then the petitioner may have been able to contend that it had intimated to the Income-tax Department all primary and material facts and, therefore, resort could not be had to section 17. Being conscious of the fact that, in the original....
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.... that this averment is also untrue and false. The record of the Wealth-tax Officer shows that the petitioner belongs to group of shareholders of Continental Construction Pvt. Ltd. Mr. Batra was representing the case of the members of the group before the wealth-tax and income-tax authorities. Pursuant to the receipt of the notice by Shri S. L. Batra, a return of wealth was filed. No objection was taken before the wealth-tax authorities to the effect that Shri Batra had no authority to accept the notice. We do not believe that a professional accountant of repute would accept a notice under section 17 unless and until he was authorised to do so. If he accepted the notice wrongly and thereby deliberately misled the Income-tax Department to bel....