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TaxTMI 
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2022 (8) TMI 1233
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....ther, heard and disposed of by this common order. 2. In writ petitions No.9937, 9938, 9939 and 9945 of 2022, Petitioner has questioned the Notice dated 21st August, 2019; Order of Assessment dated 31st December, 2019; and also sought for quashing the Notice of Demand dated 31st December, 2019 issued by respondent No.1. In writ petition No.9945 of 2022, the petitioner has also challenged the order dated 03rd May, 2022 passed in Appeal No. CIT(A)-11/ BNG/10701/2019-20, dismissing the appeal. In Writ Petition No.9946 of 2022, the petitioner is challenging the Notice issued under Section 153C of the Income Tax Act, 1961, for Assessment Years 2012-13, 2013- 14, 2014-15, 2015-16, 2016-17 and 2017-18 all dated 22nd August, 2019 as per Annexure-A to A5; and also sought for quashing Assessment orders dated 30th December, 2019 for Assessment Years 2015-16, 2016-17, 2017-18 and 2018-19 as per Annexure-B to B3 and further prayed for quashing demand notices dated 30th December, 2019 as per Annexure-C to C3 for the aforementioned Assessment Years. 3. Brief facts for adjudication of these writ petitions are that, the respondent-Revenue had conducted search action under Section 132 of....
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.... petitions deserve to be dismissed on the ground of delay and laches. It is further contended that the officer authorised under Section 132 of the Act, is empowered to enter and search any building, place, vessel, vehicle or Aircraft where he has reasoned to suspect such books of account, other documents, money, etc. It is further pleaded 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 the Act, and therefore, sought for dismissal of Writ Petitions. It is further clarified that Section 132(1) of the Act, provides for "person specific and not premises specific" and therefore, the determinative factor is the person against whom the warrant of search is issued under Section 132 of the Act. It is further submitted that Section 34 of the Evidence Act, 1872 are applicable to the proceedings under Income Tax Act, as the Income tax Act, is itself a Code and accordingly, sought for dismissal of writ petitions. 5. I have heard Sri Kiran ....
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....ry 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. 8. Nextly, Sri Kiran S. Javali, 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, learned Senior Counsel appearing for the petitioners places 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 respondent- Revenue as the same is without jurisdiction and as such, learned Senior Counsel sought for interference of this court in these writ petitions. 9. Insofar as Writ Petition No.....
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....l 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. Emphasising 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. 11. Nextly, Sri Balbir Singh, learned Additional Solicitor General, 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 defaultee. In this regard, learned Additional Solicitor General refers to the judgment of the Hon'ble Apex Court in the case of P....
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....levant provision is Section 127(1) of the Act and same is extracted below: "Section 127(1): The Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, transfer any case from one or more Assessing Officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him." (underlining supplied) 14. The language employed under Section 127 of the Act connotes providing reasonable opportunity to the assessee and passing Assessment Order based on reasons. Perusal of the writ papers and the arguments of learned Counsel appearing for the respondent-Revenue do not satisfy the ingredients of "fair play" as embodied under Section 127(1) of the Act {see PUNJAB NATIONAL BANK LTD. v. ALL INDIA PUNJAB NATIONAL BANK EMPLOYEES FEDERATION (1960(1) SCR 806)}. I have also carefully noticed the observation m....
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....t, and rendered, over a long period in recent years, of infinitely more convenient access than that provided by the old prerogative writs and actions for a declaration, is intended to protect the individual against the abuse of power by a wide range of authorities, judicial, quasi-judicial, and, as would originally have been thought when I first practiced at the Bar, administrative. It is not intended to take away from those authorities the powers and discretions properly vested in them by law and to substitute the courts as the bodies making the decisions. It is intended to see that the relevant authorities use their powers in a proper manner (p. 1160)." In R. v. Panel on Takeovers and Mergers, ex p Datafin plc, Sir John Donaldson, M.R. commented: "An application for judicial review is not an appeal." In Lonrho plc v. Secretary of State for Trade and Industry, Lord Keith said: "Judicial review is a protection and not a weapon." It is thus different from an appeal. When hearing an appeal the Court is concerned with the merits of the decision under appeal. In Amin, Re, Lord Fraser observed that : "Judicial review is concerned not with the m....
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....asonableness? Is it a magical formula? In R. v. Askew, Lord Mansfield considered the question whether mandamus should be granted against the College of Physicians. He expressed the relevant principles in two eloquent sentences. They gained greater value two centuries later : "It is true, that the judgment and discretion of determining upon this skill, ability, learning and sufficiency to exercise and practise this profession is trusted to the College of Physicians and this Court will not take it from them, nor interrupt them in the due and proper exercise of it. But their conduct in the exercise of this trust thus committed to them ought to be fair, candid and unprejudiced; not arbitrary, capricious, or biased; much less, warped by resentment, or personal dislike." 79. To quote again, Michael Supperstone and James Goudie; in their work Judicial Review (1992 Edn.) it is observed at pp. 119 to 121 as under : "The assertion of a claim to examine the reasonableness been done by a public authority inevitably led to differences of judicial opinion as to the circumstances in which the court should intervene. These differences of opinion were resolved in two land....
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....which they ought not to have taken into account, or, conversely, have refused to take into account or neglected to take into account matter which they ought to take into account. Once that question is answered in favour of the local authority, it may still be possible to say that, although the local authority had kept within the four comers of the matters which they ought to consider, they have nevertheless come to a conclusion so unreasonable that no reasonable authority could ever have come to it. In such a case, again, I think the court can interfere. The power of the court to interfere in each case is not as an appellate authority to override a decision of the local authority, but as a judicial authority which is concerned, and concerned only, to see whether the local authority has contravened the law by acting in excess of the power which Parliament has confided in them.' This summary by Lord Greene has been applied in countless subsequent cases. "The modem statement of the principle is found in a passage in the speech of Lord Diplock in Council of Civil Service Unions v. Minister for Civil Service 'By "irrationality" I mean what can now be succinctly referred....
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....VC SHUKLA (supra), wherein 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. From a plain reading of the Section it is manifest that to m....
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....ith one continuous account, are not a book of account within the purview of S.34." We must observe that the aforesaid approach is in accord 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)." (underlining by me) 17. The Hon'ble Supreme Court in the case of COMMON CAUSE (supra), at paragraphs 278 to 282 of the judgmnt, 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 irrelevant and not admissible under Section 34 of the Evide....
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....hat 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 took pl....
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....tute material evidence. Following the law declared by the Hon'ble Apex Court, I am of the view that the action taken by the respondent- Revenue against the petitioner 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 petitions, as the same are void and illegal. In this connection, it is relevant to deduce the law declared by the Hon'ble Apex Court in the case of ICICI BANK LIMITED AND ANOTHER v. MUNICIPAL CORPORATION OF GREATER BOMBAY AND OTHERS reported in AIR 2005 SC 3315 wherein it is held that, "The ratio and effect of the judgment is required to be ascertained with reference to the question of law as decided by the Court. The ratio of the judgment or the principle upon which the question before the Court is decided is alone binding as a precedent. The decision of the Supreme Court upon a question of law is considered to be a binding precedent and this must be ascertained and determined by analysing all the material fa....
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....ound administration of justice delivery system, to make known that there have been proper and due application of mind by the authorities, which is an essential requisite of principles of natural justice. Reasons introduces clarity in Order and absence of such reasons would render the decision making process null and void. Reasons substitute subjectivity by objectivity and therefore, the recording of reasons is the principle of natural justice and it ensures transparency and fairness in decision making [see (2010)3 SCC 732]. At this juncture, it is useful to refer to the judgment of Hon'ble Apex Court in the case of BABU VERGHESE AND OTHERS v. BAR COUNCIL OF KERALA AND OTHERS, reported in (1999)3 SCC 422, wherein at paragraph 31 and 32, it is held as follows: "31. It is the basic principle of law long settled that if the manner of doing a particular act is prescribed under any Statute, the act must be done in that manner or not at all. The origin of this rule is traceable to the decision in Taylor vs. Taylor (1875) 1 Ch.D 426 which was followed by Lord Roche in Nazir Ahmad vs. King Emperor who stated as under : "Where a power is given to do a certain thing in a cer....
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....aken note in appropriate proceedings if at all any issue is raised by the aggrieved party." 21. In the case of THE COLLECTOR (DISTRICT MAGISTRATE) ALLAHABAD v. RAJARAM, reported in AIR 1985 SC 1622, Hon'ble Supreme Court has held that where power is conferred to achieve a certain purpose, the power can be exercised only for achieving that purpose. It is useful to refer to paragraph 26 of the said judgment, which reads thus: "26. Where power is conferred to achieve a purpose it has been repeatedly reiterated that the power must be exercised reasonably and in good faith to effectuate the purpose. And in this context 'in good faith' means 'for legitimate reasons'. Where power is exercised for extraneous or irrelevant considerations or reasons, it is unquestionably a colourable exercise of power or fraud on power and the exercise of power is vitiated. If the power to acquire land is to be exercised, it must be exercised bona fide for the statutory purpose and for none other. If it is exercised for an extraneous, irrelevant or non-germane consideration, the acquiring authority can be charged with legal mala fides In such a situation there is no que....
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....convinced there was no need but a pretence- Therefore, disagreeing with the High Court, we are of the opinion that the power to acquire land was exercised for an extraneous and irrelevent purpose and it was colourable exercise of power, namely, to satisfy the chagrin and anguish of the Sammelan at the coming up of a cinema theatre in the vicinity of its campus, which it vowed to destroy. Therefore, the impugned notification has to be declared illegal and invalid for this additional ground." 22. In the case of SRI BUDHIA SWAIN AND OTHERS v. GOPINATH DEB AND OTHERS, reported in AIR 1999 SC 2089, Hon'ble Supreme Court, at paragraphs 8 and 9 of the judgment, held as follows: "8. In our opinion a tribunal or a court may recall an order earlier made by it if (i) the proceedings culminating into an order suffer from the inherent lack of jurisdiction and such lack of jurisdiction is patent, (ii) there exists fraud or collusion in obtaining the judgment, (iii) there has been a mistake of the court prejudicing a party or (iv) a judgment was rendered in ignorance of the fact that a necessary party had not been served at all or had died and the estate was not represented. The power....
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....de clear that as I have already concluded that the initiation of proceedings by the respondent-Revenue based on the diaries/loose sheets against the petitioners herein is without jurisdiction and contrary to the law declared by the Hon'ble Apex Court and same cannot be touched upon while conducting de novo enquiry afresh. 24. As regards the last limb of the argument advanced by the learned Additional Solicitor General that writ petitions are not maintainable 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 respondent- 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 maintainabil....
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....f maintainability of the writ petition, learned counsel for the appellants relied upon the following decisions: (a) In Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai and Others, [(1998) 8 SCC 1], (Whirlpool Corporation), at paragraph 15, it was observed that under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. But, the High Court has imposed upon itself certain restrictions, 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 ....
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....rding alternative remedy was made. It was held that the principle of alternative remedy is essentially a rule of policy, convenience and discretion and never a rule of law. Despite the existence of an alternative remedy, it is within the jurisdiction of discretion of the High Court to grant relief under Article 226 of the Constitution. At the same time, it cannot be lost sight of the fact that though the matter relating to an alternative remedy has nothing to do with the jurisdiction of the case, normally the High Court should not interfere 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 con....
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....on 9 of the Mines and Minerals (Regulation and Development) Act, 1957 was not the price for removal of minerals and hence, did not attract liability to pay purchase tax. (c) In Embassy Property Developments Private Limited vs. State of Karnataka, [2019 SCC Online SC 1542], (Embassy Property), one of the preliminary questions that arose was whether the High Court ought to interfere under Article 226/227 of the Constitution, with an Order passed by the National Company Law Tribunal (NCLT) in a proceeding under the Insolvency and Bankruptcy Code, 2016 (IBC), ignoring 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 H....
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....LT chose to exercise jurisdiction not vested in it in law, the High Court of Karnataka was justified in entertaining the writ petition, on the basis that NCLT was coram non judice. In the instant case, the State of Karnataka had invoked the jurisdiction of the High Court under Article 226 of the Constitution without taking recourse to the appellate remedy under NCLAT. It was held that the judicial review was permissible and the High Court was justified in entertaining the writ petition assailing the order of the NCLT, directing execution of a supplemental lease deed for the extension 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 ....
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....he Constitution and pass interim order ignoring the fact that the petitioner can avail effective, alternative remedy by filing an application, appeal, revision, etc. and the particular legislation contains a detailed mechanism for redressal of his grievance. (f) Of course in ICICI Bank Limited vs Umakanta Mohapatra and others, [(2019) 13 SCC 497], (Umakanta Mohapatra), it was held, the writ petition was not maintainable and therefore, allowed the appeals. (g) In Authorised Officer, State Bank of India vs. Allwyn Alloys Private Limited and others, [(2018) 8 SCC 120], the Hon'ble Supreme 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." 25. Following the aforementioned judgment rendered by the Division Bench of this Court, I am of the opinion that since the impugned notices are issued under Section ....