Madhya Pradesh High Court
Lalit Kumar Chhallani vs Central Board Of Direct Taxes on 16 October, 2023
Author: Sushrut Arvind Dharmadhikari
Bench: Sushrut Arvind Dharmadhikari
1
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
WP No. 22829 of 2019
(LALIT KUMAR CHHALLANI Vs CENTRAL BOARD OF DIRECT TAXES AND OTHERS)
Dated : 16-10-2023
Shri Sumit Nema, learned Senior Advocate with Shri Piyush Parashar,
learned counsel for the Petitioner .
Shri Veena Mandlik, learned counsel for the Respondents.
Heard on I.A. No. 7534/2023, for seeking stay against the demand notice dated 25.09.2023 filed on behalf of petitioner.
2 . Learned Senior Counsel for the petitioner has submitted that satisfactory notice is the foundation of the impugned search against the petitioner, therefore, it would be appropriate to direct the respondents not to take coercive action pursuant to the impugned search during pendency of the writ petition.
3. Learned Senior Counsel for the petitioner has drawn attention on the law laid down by the Apex Court in the case of Director General of Income Tax (Investigation) and others vs. Spacewood Furnishers Pvt. Ltd. and others reported in (2015) 12 SCC 179 and submitted that it is well within the jurisdiction of the High court to examine the reasons recorded in the satisfactory note, which was the foundation of impugned search against the petitioner. He has also drawn attention to the decision of this Court in Gaya Prasad Pathak vs. Assistant Commissioner of Income Tax reported in 2007 290 ITR 128 MP, and submitted that the petitioners have no other statutory forum to challenge the satisfactory note. He has also drawn attention to the Ap ex Court's decision in the case of Principal Director of Income Tax (Investigation) vs. Laljibhaikanjibhai Mandalia reported in (2022) 140 Signature Not Verified Signed by: VATAN SHRIVASTAVA Signing time: 10/18/2023 7:37:18 PM 2 taxmann.com 282, and submitted that search and seizure action, being highly intrusive in nature, must be conducted scrupulously in line with the parameters set out under the statute and applicable rules. In respect of notification dated 13.11.2014 relied upon by the revenue, he submitted that it deals with extension of jurisdiction qua territory alone, and not regard to an assessee. The notification is in furtherance of the statutory sanction under the proviso to Section 132 and Section 132 (1A), to enable officers in the department to enter and search place located in areas other than those coming under the jurisdiction of the assessing officer holding jurisdiction over the assessee searched. He further placed reliance in the case of Anil Jain vs. Principal Director General of Income Tax (Investigation) of the Madras High Court decided on 23.12.2022 and submitted that Madras High Court has recently examined the scope of notification dated 13.11.2014 as following in para 29, which reads as under:-
"29. Thus it is my considered view, based upon the scheme of the Act and the specific statutory provisions, that it is statutorily enjoined for a search to be conducted by the jurisdictional officers of that assessee only. The sole exceptions to this rule are in regard to locations that fall within the jurisdiction of a different officer, subject to satisfaction of, and compliance with, the requisite conditions, under the proviso to Section 132 and Section 132(1A)."
4. On the other hand, learned counsel for the revenue opposed the prayer and submitted that satisfaction note cannot be produced before this Court for its perusal. However, she was unable to point out any provision by which immunity has been claimed.
5. On due consideration of the arguments of the learned counsel for the Signature Not Verified Signed by: VATAN SHRIVASTAVA Signing time: 10/18/2023 7:37:18 PM 3 parties, we are of the view that until the impugned search operations are validated on the ground of their jurisdictional correctness, validity, it would be traversity of justice if the respondents are allowed to take coercive steps against the petitioners, pursuant to the impugned search and therefore, the respondents are refrained from taking coercive actions (pursuant to the impugned search) against the petitioner, till the pendency of the writ petition.
Accordingly, I.A. No. 7534/2023 stands allowed.
(S. A. DHARMADHIKARI) (PRANAY VERMA)
JUDGE JUDGE
Vatan
Signature Not Verified
Signed by: VATAN
SHRIVASTAVA
Signing time: 10/18/2023
7:37:18 PM