2011 (2) TMI 1205 - HC - Income Tax

Writ petition - Whether assessee is a Benaami owner of the property or not It is wrong to presume that the will is erroneous and unjust to hold that the petitioner herself had acquired the property in the year 1967 - validity of the notices issued under Section 148 of the Income Tax Act upheld petitioner is at liberty to raise all the objections which have been raised in the present petition before the authority concerned Assessing Officer directed to pass re-assessment order under Section 147/148 of the Income Tax Act for the assessment years under consideration writ petition is disposed of accordingly

Summary

Issues:
- Validity of notices issued under Section 148 of the Income Tax Act for assessment years 1992-93 to 1995-96
- Claim of property ownership and authenticity of will executed by the petitioner's father
- Dispute regarding whether the petitioner is a Benaami owner of the property in question
- Exercise of extraordinary jurisdiction under Article 226 of the Constitution

Validity of Notices under Section 148:
The petitioner sought to restrain the Assistant Commissioner of Income-Tax from proceeding on the basis of notices under Section 143(2)/142(1) and to quash the notices issued under Section 148 for assessment years 1992-93 to 1995-96. The petitioner, an IAS officer, argued that the will executed by her father regarding the property in Ghaziabad was genuine, accepted by the Civil Court, and not acquired by her in 1967 as alleged by the income tax authorities. The Revenue contended that the property was acquired by the petitioner out of unexplained income in her father's name and passed on to her, justifying the issuance of notices under Section 148 for consistency in assessment.

Property Ownership and Will Authenticity:
The petitioner's counsel relied on case laws to support the genuineness of the will and ownership of the property by M.S.Yadav (HUF), disputing the Revenue's claims of Benaami ownership. The Revenue argued that the property was acquired by the petitioner through unexplained sources and attempted to retain legal ownership through a forged will. The Court noted the ongoing dispute over the property's ownership and the need for the petitioner to exhaust available remedies before challenging the notices under Article 226 of the Constitution.

Benaami Ownership Dispute:
The Court highlighted the controversy surrounding whether the petitioner was a Benaami owner of the property and emphasized that even if the will was genuine, it did not establish the original purchaser's valid title. The Court declined to delve into the merits of the case, upholding the validity of the notices under Section 148 and directing the Assessing Officer to proceed with re-assessment for the relevant years, granting the petitioner the opportunity to raise objections during the process.

Exercise of Extraordinary Jurisdiction under Article 226:
In line with established legal principles, the Court refrained from exercising extraordinary jurisdiction under Article 226 due to the availability of alternative remedies for the aggrieved party, citing the necessity for exhausting statutory remedies before seeking relief under Article 226. The Court vacated the interim order and directed the Assessing Officer to complete re-assessment within four months, providing a reasonable opportunity to the assessee and emphasizing cooperation in the proceedings to ensure lawful completion of the re-assessment process.

Conclusion:
The High Court upheld the validity of the notices issued under Section 148, allowing the Assessing Officer to proceed with re-assessment for the specified years while emphasizing the importance of exhausting statutory remedies and cooperating in the proceedings. The judgment disposed of the writ petition without costs, maintaining a balanced approach towards the disputed issues surrounding property ownership, will authenticity, and the exercise of extraordinary jurisdiction under Article 226.