VIVEK GUPTA VS CENTRAL BOARD OF DIRECT TAXES, 2000 PTD-HARYANA-HIGH-COURT-INDIA 3545 (1999)

Income-tax-

----Reassessment---Notice---Writ---Reason to believe that income escaped assessment---Source of money deposited not explained---Assessing authority justified in initiating action under 5.148---Indian Income Tax Act, 1961, Ss.147 & 148. '

The Income-tax Officer issued notices under section 148 of the Income Tax Act, 1961, dated March 20, 1997, to the assessee as he had reason to believe that income to the extent of Rs.69,538 and Rs.14,000 for the assessment years 1994-95 and 1995-96 had escaped assessment. It was not disputed that the amounts were deposited by the petitioner. According to the assessee's counsel, the deposits had been made on behalf of one D. On a writ petition:

Held, dismissing the petition, that there was nothing to show that the authority did not have any reason to believe that income chargeable to tax had escaped assessment. The petitioner has not shown by any evidence on record as to what was the source of the money deposited by him. Therefore, the issue of notice under section 147 was valid.

Asoke Kumar Sen v. ITO J1981) 132 ITR 707 (Delhi); ITO v. Lakhmani Mewal Das (1976) 103 ITR 437 (SC); R.S. Chiranji Lal & Sons v. CIT (1959) 36 ITR 407 (Punj.) and Sheo Nath Singh v. AAC of I.T. (1971) 82 ITR 147 (SC) ref.

A.K. Mittal for Petitioner.

R. P, Sawhney, Senior Advocate and Rajesh Bindal for Respondents

JUDGMENT

JAWAHAR LAL GUPTA, J---The petitioner is aggrieved by the notice, dated March 20, 1997, by which the Income-tax Officer informed him that he had "reason to believe that-income in respect of-assessment years 1994-95 and 1995-96, has escaped assessment within the meaning of section 147 of the Income Tax Act, 1961 ". These notices related to two years. The reasons were communicated vide documents, copies of which have been produced as Annexures P-31 and P-32. It was pointed out that during the period from June.30, 1993, to February 23, 1994, the petitioner had made deposits of monthly installments of a total sum of Rs.69,538 in respect of the assessment year 1995-96, the petitioner was informed that he had made a deposit of an amount of Rs.14,000 on March 9, 1995. -Thus, notice under section 148 was given to the petitioner.

Mr. Mittal, learned counsel for the petitioner, contends that the notices issued by the authority are wholly without jurisdiction. This contention is based upon the fact that vide order, dated September 27, 1996, the Assistant Commissioner of Income-tax (Investigation Circle-II), Ambala, had passed an order of assessment and taken the plot in respect of which the deposit had been made by the petitioner into consideration.

It is not disputed that the amounts of-Rs.69,538 and Rs.14,000 have been deposited by the petitioner. According to Mr. Mittal, the deposits had been made on behalf of Mr. Dharam Pal. Is it really so? Who gave the money? What was the source? These are matters, which have to be gone into by the assessing authority. At the present moment, it cannot be said that the assessing authority could not have any reason to believe that some income had escaped assessment. Still further, on the petitioner's own showing, he does not hold a power of attorney on behalf of Dharam Pal. He is only an attorney of Prem Chand and Lekh Ram. If he holds the power of attorney on behalf of these two gentlemen, he would not be entitled to make a deposit on behalf of Dharam Pal. Thus, the view taken by the authority that the amount requires to be explained, cannot be said to be wholly fanciful or imaginary. The petitioner would normally have no occasion to make any deposit .on behalf of Mr. Dharam Pal. In this situation, we cannot say that the requirements of section 147 of the Income-tax Act were not fulfilled.

Mr. Mittal has placed reliance on the decisions of the different Courts. He has referred to the judgments in R.S. Chiranji Lal & Sons v. CIT (1959) 36 ITR 407 (Punj.); Sheo Nath Singh v. AAC of I.T. (1971) 82 ITR 147 (SC); ITO v. Lakhmani Mewal Das (1976) 103 ITR 437 (SC) and Asoke Kumar Sen v. ITO (1981) 132 ITR 707 (Delhi). It is undoubtedly correct that proceedings under section 147 can be initiated only when the assessing authority has reason to believe that income chargeable to tax has escaped assessment. It must have reasonable grounds for forming that opinion. It cannot act on the basis of mere rumour or suspicion. The belief must be that of an honest and reasonable person. There is no quarrel for these propositions. However, in the present case, there is nothing to show that the authority did not have any reason to believe that income chargeable to tax has escaped assessment. It has not been shown by the petitioner by any evidence on record as to what was the source of the money, which had been deposited by him during the years 1994-95 and 1995-96. Assuming the petitioner has an explanation, he would offer it before the authority and we have no doubt that it shall be considered. As at present, the issue of notice cannot be said to be in derogation of section 147 of the proceedings. Thus, the matter calls for no interference.

Mr. Mittal states that in C.M. No.4673 of 1999, the petitioner has given an explanation with regard to the source of income, etc. This is a matter, which shall be considered by the competent Authority. We do not wish to express any opinion lest the interest of the petitioner or the Revenue may be prejudicially affected.

No other point has been raised.

In view of the above, we find no ground to interfere. Resultantly, the writ petition is dismissed.??? .

M.B.A/77/FC????????????????????????????????????????????????????????????????????????????????????? Petition dismissed.