Madras High Court
Kamalam Rajendran vs Deputy Commissioner Of Income-Tax on 27 April, 1998
Equivalent citations: [2000]245ITR63(MAD)
JUDGMENT Y. Venkatachalam, J.
1. Invoking Article 226 of the Constitution of India, the writ petitioner has filed the present writ petition seeking for a writ of certiorari to call for the records of the respondent in file No. 47-016-PN-7130 of 1984-85 and to quash the notice dated March 23, 1989, issued therein under Section 148 of the Income-tax Act, 1961.
2. In support of the writ petition, the petitioner herein has filed an affidavit wherein she has narrated all the facts and circumstances that forced her to file the present writ petition and prayed that her petition may be ordered as prayed for. On behalf of the respondent no counter affidavit has been filed. But they argued the matter.
3. Heard the arguments advanced by learned counsel appearing for both the parties. I have perused the contents of the affidavit together with the material documents available on record in the form of typed set of papers. I have also taken into consideration the various points raised by learned counsel appearing for the respective parties during the course of their arguments.
4. In such circumstances, the only point that arises for consideration in this writ petition is, as to whether there are any valid grounds to allow this writ petition or not.
5. The petitioner herein constructed a residential house for her own use in Madurai and the construction was completed before the financial year ended March 31, 1982, and ever since she is occupying this house for her residence. In her return of income for the assessment year 1982-83, she offered a notional property income. The assessment was completed by accepting the income offered. In the course of finalisation of the income-tax assessment for the said assessment year, the respondent issued a notice under Section 143(2) for production of records, relating to cost of construction, etc., and on scrutiny of records and account books produced by her authorised representative, the assessment was completed. The respondent has subsequently completed income-tax assessments for 1983-84, 1984-85 and 1986-87 also, adopting the notional income from house property as was done for the assessment year 1982-83. For the purpose of wealth-tax in respect of the year March 31, 1982, relevant to the assessment year 1982-83, she offered the value of the property in accordance with Rule 1BB of the Wealth-tax Rules, 1957, and the assessment was completed on that basis. Similarly, assessment under the Wealth-tax Act in respect of her wealth including the said house property have been completed up to and inclusive of assessment year 1984-85. That being so, in the course of income-tax assessment proceedings, for the assessment year 1985-86, however, the respondent called upon the petitioner herein to produce a valuation certificate in respect of the above dwelling house. Accordingly, she produced the valuation certificate by an approved valuer estimating the value at Rs. 8.13 lakhs. But the assessing authority, however, without any notice to her and calling for her objections, got the property valued by the Departmental valuing officer who determined the value at Rs. 9.49 lakhs. When he issued a letter dated March 25, 1988, proposing to add the difference in her assessment either in 1984-85 or in 1985-86, she filed an objection, inter alia, contending that the valuation itself was clearly illegal there being no provision under the Act for such valuation excepting for the purpose of capital gains. The respondent dropped the proposal and completed the assessment for 1985-86 on March 28, 1988. Though he dropped the proposal for addition in 1985-86, he issued a notice under Section 148 in respect of 1983-84 purporting to assess the escaped income in that year. She challenged the above notice and filed W. P. No. 9339 of 1988 (Kamalam Rajendran v. IAC of I. T. ), before this court and got interim stay of the said proceedings. That being so, however, realising that he had already issued a notice in respect of 1983-84 which had been stayed by this court in W. P. No. 9339 of 1988 (Kamalam Rajendran v. IAC of J. T, [1999] 237 ITR 299), the respondent served another notice on the petitioner's auditor dating same with the same date as the one already issued to the petitioner herein in respect of the year 1983-84, but changing the assessment year to 1984-85. Hence, this writ petition.
6. According to the petitioner, the impugned notice herein is nothing but a colourable exercise of powers vested with the respondent. It is also her case that having accepted her objection that he had no jurisdiction to add anything to her income in respect of 1985-86 relating to the property which was constructed in 1982-83, the respondent reopened the assessment for 1983-84 and when he found that this court stayed the proceedings in the above writ petition he changed the assessment year in the impugned notice from 1983-84 to 1984-85. Therefore, her grievance is that this move by the respondent is to somehow add to her income a difference in valuation on the basis of a report tainted with the illegality, in some assessment year or other. It is also the contention of the petitioner herein that the impugned notices have been issued without any information coming into the possession of the respondent after the original assessment was over. According to the petitioner, by successive proceedings with reference to several assessment years viz., 1983-84, 1984-85 and 1985-86, the respondent is going on changing his opinion and attempting to clutch at a jurisdiction without any legal information and justification.
7. In support of her contentions, on behalf of her, the following four decisions were relied on by learned counsel appearing for the petitioner :
1. Thanthi Trust v. CIT (Asst.) [1995] 213 ITR 626 (Mad) ;
2. Bhola Nath Majumdar v. ITO [1996] 221 ITR 608 (Gauhati) ;
3. CIT v. Smt. Prem Kumari Surana ;
4. Uma Devi Jhawar (Smt.) v. ITO .
8. So also, on behalf of the respondent-Department, learned junior standing counsel relied on the following decision in justifying their stand.
280 ITR 835 (sic).
9. That being so, it is significant to note that aggrieved by a notice similar to that of the impugned notice herein, as already stated the petitioner herein has filed W. P. No. 9339 of 1988 (Kamalam Rajendran v. Inspecting Asst. CIT ), before this court and has got interim order against that. The impugned notice in the said W. P. No. 9339 of 1988 was for the year 1983-84 whereas in the case on hand the impugned notice is for the year 1984-85. It is also significant to note that while this writ petition was filed the aforesaid W. P. No. 9339 of 1988 was pending disposal. But now it has been stated by learned counsel for the petitioner that the said W. P. No. 9339 of 1988 (Kamalam Rajendran v. Inspecting Asst. CIT ), has been allowed by this court on March 24, 1998, and he has also produced a copy of the orders of the said writ petition. In the said order, this court has clearly come to a conclusion that in the instant case, admittedly, the petitioner has fully and truly disclosed all the material facts by producing the vouchers and other contractor's bills, etc., at the appropriate time for assessing the property supported by the valuation certificate under Rule 1BB of the Wealth-tax Rules, for assessing the same both under the Income-tax Act as well as under the Wealth-tax Act. In the said order, this court has elaborately discussed all the facts and circumstances of this case and also a number of decisions relied on by both the sides. In the said order, my learned brother judge has clearly held that he does not find any justification to hold that the property has escaped assessment within the meaning of Section 147 of the Act, enabling" the respondent to issue the impugned notice therein under Section 148 of the Income-tax Act. Further, in the said order, it has been clearly stated by this court that the impugned order therein lacks very much, the jurisdic-tional fact, namely, that the assessing" authority had reason to believe that the property, namely, the building located at RA 1, RA 2, Poonga Street, Thirunagar, Madurai-625 008, has escaped assessment and, therefore, it was ultimately held by this court that the impugned notice therein was without jurisdiction and accordingly the same was quashed and the writ petition was allowed. That writ petition was filed in regard to the notice issued for the year 1983-84 whereas this writ petition is for a similar notice issued for the year 1984-85. That being so, I do not find any special reasons or grounds in the case on hand to take a different view than that which was taken by this court in W. P. No. 9339 of 1988 (Kamalam Rajendran v. IAC of I. T. [19991 237 ITR 299). Therefore, the order passed by this court in W. P. No. 9339 of 1988 (Kamalam Rajendran v. IAC of I. T. [1999] 237 ITR 299), squarely applies to the present case also. In that view of the matter, I am not inclined to discuss any of the decisions relied on by the parties herein. Therefore, for all the reasons aforesaid and in view of the order of this court made in W. P. No. 9339 of 1988, dated March 24, 1998 (Kamalam. Rajendran v. IAC of I.T. ), this writ petition also has to be allowed.
10. In the result, the writ petition is allowed as prayed for. No costs. Consequently, the notice impugned in this writ petition is hereby quashed. Consequently, W. M. P. No. 11452 of 1989 is dismissed.