Savesh Kumar Agarwal v. Union of India and Ors.

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The Tax PublishersCivil Miscellaneous Writ Petition No. 692 of 2011 2013 TaxPub(DT) 1495 (All-HC) : (2013) 052 (I) ITCL 0369 : (2013) 353 ITR 0026 INCOME TAX ACT, 1961 --Search and seizure--Assessment under section 153CAssessment under section 153A already completed--During course of search and seizure, assessing officer noted that assessee was engaged in business of purchase and sale of jewellery, etc. He dispatched 69.900 kg. of silver bullion for manufacturing ornaments. Entire consignment of silver bullion was seized from the custody of assessee's courier by Delhi police. Assessee's assessing officer passed an order under section 132B to release the entire consignment to assessee and after examining books of account and other relevant materials. Assessing officer after taking note of the fact of consignment finding that said silver quantity was part of stock-in-trade and disclosed by assessee. Entire silver bullion was thus, released. Assessment was completed under section 153B(1)(b) read with section 143(3) in case of assessee's courier for assessment year 2009-10. He however, referred matter along with satisfaction to assessing officer of assessee under section 153C. Thus, assessing officer initiated proceedings under section 153A in case of assessee. Assessee challenged the same. *Held:* Not acceptable. It was not open to assessee to contend before court that exercise of power, which ultimately existed to authority, would expose assessee to assessment for period for 2003-04 to 2009-10 on which assessing officer had already recorded satisfaction. The department has taken a stand that even if the books of account were examined by the assessing officer of assessee, and the bullion having found validly entered in the stock books was released under section 132B, still the assessing officer can proceed under section 153A and assess assessee to find out the source of income. [Para 23] Where there is power to act in a particular manner, unless it is shown that power has been exercised without jurisdiction and lacks bona fide the statutory notice given in exercise of such powers, may not be set aside by the court under article 226 of the Constitution of India. The argument that the second assessment for the same year and of the previous years will amount to duplication and will be needless exercise of power, overlooks the fact that such power actually exists and if there is any reason to believe, namely, the satisfaction of the assessing authority to examine the source of income, the court would not interfere to close such enquiry. [Para 24] If there is power to do something under the Act, the action taken in the fiscal matters cannot be set aside in exercise of the writ jurisdiction, on the ground that such power is to be exercised needlessly, without any purpose. The exercise of power in such case can only be challenged, if the power is being exercised with ulterior motive and mala fide intentions. It is not open for assessee to contend before the writ court that the exercise of power, which admittedly, exists, in the authority, will expose the petitioner to assessment for the same period on which assessing authority, has already recorded satisfaction. [Para 25] Income Tax Act, 1961 Section 153A Income Tax Act, 1961 Section 153C In the Allahabad High Court Sunil Ambwani & K. N. Pandey J.J. Savesh Kumar Agarwal v. Union of India and Ors. Civil Miscellaneous Writ Petition No. 692 of 2011 25 November, 2011 Petitioner by : S. D. Singh Respondents by : Dhananjay Awasthi JUDGMENT We have heard Shri S.D. Singh, learned counsel for the petitioner Shri Dhananjay Awasthi appears for the respondents. 2. The petitioner is engaged in.the business of purchase and sale of jewellery, etc. In the regular course of business the petitioner dispatched 69.900 kg. of silver bullion to M/s R. M. Silver, Rajkot and M/s. Subh Enterprises at their addresses at Rajkot for manufacturing silver ornaments through M/s. Harish Kumar Laxman Kumar, 225, Kacha Ghasi-ram, Chandni Chowk, New Delhi. The entire consignment of the bullion was seized from the custody of petitioners courier by the Delhi Police. SUBSCRIBE FOR FULL CONTENT

The Tax PublishersCivil Miscellaneous Writ Petition No. 692 of 2011
2013 TaxPub(DT) 1495 (All-HC) : (2013) 052 (I) ITCL 0369 : (2013) 353 ITR 0026

INCOME TAX ACT, 1961

--Search and seizure--Assessment under section 153CAssessment under section 153A already completed--During course of search and seizure, assessing officer noted that assessee was engaged in business of purchase and sale of jewellery, etc. He dispatched 69.900 kg. of silver bullion for manufacturing ornaments. Entire consignment of silver bullion was seized from the custody of assessee's courier by Delhi police. Assessee's assessing officer passed an order under section 132B to release the entire consignment to assessee and after examining books of account and other relevant materials. Assessing officer after taking note of the fact of consignment finding that said silver quantity was part of stock-in-trade and disclosed by assessee. Entire silver bullion was thus, released. Assessment was completed under section 153B(1)(b) read with section 143(3) in case of assessee's courier for assessment year 2009-10. He however, referred matter along with satisfaction to assessing officer of assessee under section 153C. Thus, assessing officer initiated proceedings under section 153A in case of assessee. Assessee challenged the same. Held: Not acceptable. It was not open to assessee to contend before court that exercise of power, which ultimately existed to authority, would expose assessee to assessment for period for 2003-04 to 2009-10 on which assessing officer had already recorded satisfaction.

The department has taken a stand that even if the books of account were examined by the assessing officer of assessee, and the bullion having found validly entered in the stock books was released under section 132B, still the assessing officer can proceed under section 153A and assess assessee to find out the source of income. [Para 23] Where there is power to act in a particular manner, unless it is shown that power has been exercised without jurisdiction and lacks bona fide the statutory notice given in exercise of such powers, may not be set aside by the court under article 226 of the Constitution of India. The argument that the second assessment for the same year and of the previous years will amount to duplication and will be needless exercise of power, overlooks the fact that such power actually exists and if there is any reason to believe, namely, the satisfaction of the assessing authority to examine the source of income, the court would not interfere to close such enquiry. [Para 24] If there is power to do something under the Act, the action taken in the fiscal matters cannot be set aside in exercise of the writ jurisdiction, on the ground that such power is to be exercised needlessly, without any purpose. The exercise of power in such case can only be challenged, if the power is being exercised with ulterior motive and mala fide intentions. It is not open for assessee to contend before the writ court that the exercise of power, which admittedly, exists, in the authority, will expose the petitioner to assessment for the same period on which assessing authority, has already recorded satisfaction. [Para 25]

Income Tax Act, 1961 Section 153A

Income Tax Act, 1961 Section 153C

In the Allahabad High Court

Sunil Ambwani & K. N. Pandey J.J.

Savesh Kumar Agarwal v. Union of India and Ors.

Civil Miscellaneous Writ Petition No. 692 of 2011

25 November, 2011

Petitioner by : S. D. Singh

Respondents by : Dhananjay Awasthi

JUDGMENT

We have heard Shri S.D. Singh, learned counsel for the petitioner Shri Dhananjay Awasthi appears for the respondents.

2. The petitioner is engaged in.the business of purchase and sale of jewellery, etc. In the regular course of business the petitioner dispatched 69.900 kg. of silver bullion to M/s R. M. Silver, Rajkot and M/s. Subh Enterprises at their addresses at Rajkot for manufacturing silver ornaments through M/s. Harish Kumar Laxman Kumar, 225, Kacha Ghasi-ram, Chandni Chowk, New Delhi. The entire consignment of the bullion was seized from the custody of petitioners courier by the Delhi Police.