1992 (3) TMI 58 - HC - Income Tax

Summary

Issues:
1. Validity of the notice issued under section 6(1) of the Act in 1983 without recording fresh "reasons to believe."
2. Appellant's status as an affected person under section 2(2)(c) of the Act after divorce from Pakhar Singh.
3. Requirement of proof of actual detention of Pakhar Singh for the appellant to be considered an affected person.
4. Allegation of undue delay in the proceedings under section 7(1) of the Act against the appellant.
5. Source of funds for the purchase of properties detailed in the notice under section 6(1) of the Act.

Analysis:
1. The appellant challenged the validity of the notice issued under section 6(1) of the Act in 1983 without fresh "reasons to believe." The court held that the Competent Authority had already recorded "reasons to believe" in 1978 when the first notice was issued. The subsequent notice in 1983 was deemed redundant as the case had been remanded for a fresh decision. Therefore, the absence of fresh "reasons to believe" in the 1983 notice did not vitiate the proceedings.

2. The appellant claimed that her divorce from Pakhar Singh in 1980 rendered her no longer an affected person under section 2(2)(c) of the Act. The court rejected this argument, stating that her status as an affected person was established when the Act came into force in 1977, and a subsequent divorce did not alter this. The impugned order was based on the 1978 notice when she was still married to Pakhar Singh.

3. The appellant contested the lack of proof regarding Pakhar Singh's actual detention under the COFEPOSA Act. The court clarified that the issuance of the detention order against Pakhar Singh automatically made the appellant an affected person under the Act, regardless of actual detention. Thus, the Competent Authority was justified in its decision against the appellant.

4. The appellant raised concerns about undue delay in the proceedings under section 7(1) of the Act. The court acknowledged the delay but noted that the appellant also bore responsibility for it. Despite the delay, the court found no merit in setting aside the impugned order solely on the grounds of delay.

5. Regarding the appellant's purchase of properties detailed in the notice under section 6(1) of the Act, the court accepted her explanation. The appellant demonstrated that the funds for the properties were received from her father, an agriculturist, which was deemed a plausible source. Therefore, the court concluded that the properties were acquired with funds from her father and set aside the Competent Authority's order.

Overall, the court allowed the appeal and set aside the impugned order of the Competent Authority based on the detailed analysis and findings on each issue raised by the appellant.