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TMI Blog2013 (6) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... had not responded the notice dated 02.08.2010. 3. Admittedly Vinod Kumar Agarwal is the proprietor of M/S Abhay Chemicals, he and his brother Shubhanshu Agarwal are Directors of M/S K.V. Aromatics (Pvt.) Ltd. (a Company registered under the Companies Act, 1956, having it's registered office at R-289 C, Greater Kailash-I, New Delhi-110048) and Himanshu Agarwal is the son of Vinod Kumar Agarwal. Thus all the petitioners in aforementioned four writ petitions are related to each other. Similar notices have been issued to them and in all the writ petitions similar questions are involved as such the writ petitions are heard together and are being decided by a common judgment. Writ (Tax) No. 1255 of 2010 is treated as the leading case. 4. Vinod Kumar Agarwal (the petitioner) has his ancestral house at Sambhal, district Moradabad. All the four petitioners have their accounts in State Bank of India, branch Sambhal, Moradabad. It is stated that the petitioners are carrying on business of manufacture and sale of mentha, mentha oil, powder, crystal and other oil. The petitioner and his brother Shubhanshu Agarwal are Directors of M/S K.V. Aromatics (Pvt.) Ltd., a Company registered under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly an amount of Rs. 40 lakhs was credited on 11.11.2009 and Rs. 50 lakhs was credited on 13.11.2009 to the account of Himanshu Agarwal from the account of M/S Abhay Chemicals, in the State Bank of India, Sambhal branch, Moradabad. One coming to know about the aforesaid transactions Financial Intelligence Unit, Ministry of Finance, New Delhi through the letter dated 11.06.2010 directed the Director General of Income Tax (Investigation), Lucknow to investigate the aforesaid transactions treating them as suspicious. Since the transactions relating to the petitioners were made at Moradabad, within the territorial jurisdiction of Deputy Director of Income Tax (Investigation), Moradabad as such Additional Director of Income Tax (Investigation), Dehradun vide letter dated 19.07.2010 forwarded the aforesaid Suspicious Transaction Report to him for investigation. All the transactions were done at Sambhal, Moradabad as such Deputy Director of Income Tax (Investigation), Moradabad has jurisdiction to investigate in to the matter under Section 120 of the Act read with notification of Central Board of Direct Taxes dated 03.12.2001 and notification of Director General of Income-tax (Investigatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... know dated 31.03.2009 he had jurisdiction to investigate the matter. The inquiry is being made on the Suspicious Transactions Report made by Financial Intelligence Unit, Ministry of Finance, New Delhi through the letter dated 11.06.2010 and is not a roving inquiry. Notices issued, in exercise of powers under Section 131 (1A) of the Act, do not suffer from any illegality. 8. We have considered the respective arguments of the parties. First question is to be decided in respect of jurisdiction and authority of Deputy Director of Income Tax (Investigation), Moradabad (respondent-2) to issue notice to the petitioner. According to the petitioner, he is a permanent resident of Greater Kailash, New Delhi and used to file return before the Assessing Officer, New Delhi as such income-tax authority at Moradabad has no jurisdiction on him under the Act. 9. Section 132 of the Act authorizes the Director and other authorities to make search and seizure and. Section 135 authorizes to make any inquiry under the Act. Under Section 135, while making any inquiry, the Director shall have all the powers of an Assessing Officer. Section 2 (21) of the Act defines "Director General or Director" as follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or classes of income and cases or classes of cases has to be assigned by the notification of Central Board of Direct Taxes. Under Section 120 (2) of the Act, Central Board of Direct Taxes is authorized to delegate it's powers to any other income-tax authority. In exercise of powers under Section 120 (2) of the Act, Central Board of Direct Taxes vide notification dated 03.12.2001 delegated it's powers under Section 120 (1) to Director General of Income-tax (Investigation) Lucknow who by notification dated 31.03.2009 authorized respondent-2 to exercise powers of the Director under the Act, within the territory of district Moradabad. Thus respondent-2 is authorized to make any search and seizure under Section 132 and an inquiry under Section 135 of the Act within the territory of district Moradabad. 12. Now the question arises as to whether jurisdiction of income-tax authority at Moradabad has been ousted for the reason that the petitioner has been filing his income-tax return before the Assessing Officer, New Delhi jurisdiction of the Assessing Officer to assess any person is provided under Section 124 of the Act. So far as the assessment is concerned, the Assessing Officer has excl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issue of the notice is concerned, the Act does not require to record any reason. Subjective satisfaction of the competent authority is sufficient to exercise the power. From the materials produced along with Counter Affidavit, it is clear that satisfaction to suspect is based upon the bank transactions of the petitioner by which Rs. 90 lakhs were credited in his account from the account of K.V. Aromatics Pvt. Ltd., which prima facie raises a suspicion that income has been concealed. Accordingly reasons to suspect is based upon material and not an imagination. Subjective satisfaction of the income-tax authority based upon relevant materials cannot be re-assessed and re-examined in exercise of writ jurisdiction. 16. In view of the aforesaid discussion, we do not find any error in the impugned notices issued by respondent-2. The writ petition has no merit and is dismissed. (Delivered by Prakash Krishna,J.) I have gone through the draft judgment prepared by my brother and agree with him fully. Even after being in full concurrence with my brother, to my mind, there appears one more aspect of the case important to be considered which I would like to add separately as supportive to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person is not paying correct tax legally payable by him. It also does not contemplate passing of any order. Even apart any specific provision, it is legal fair play not to hurt any party without hearing him. The department before forming an opinion to proceed further in the matter, may call for a clarification on some aspect or other under the aforesaid section and we fail to understand how it would be detrimental to such person. The keywords for the present purposes are "notwithstanding that no proceedings with respect to such person or class of persons are pending before him .................". The words 'to any person or class of persons' are words of very wide connotation and in its widest connotation may take in any person, whether connected or not with an assessee. The singular contention of the learned counsel for the petitioners is that the petitioners are being assessed by Income-tax Authorities outside the jurisdiction of the respondent no.2 i.e. at Delhi and therefore, steps under section 131 (1A) of the Act is beyond its jurisdiction. The said argument proceeds on the footing that the petitioners being not an assessee within the jurisdiction of the respondent no.2, n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant portion is reproduced below:- The Income-tax Officer is not bound by any technical rules of the law of evidence. It is open to him to collect materials to facilitate assessment even by private enquiry. But if he desires to use the material so collected, the assessee must be informed of the material and must be given an adequate opportunity of explaining it. The statements made by Achaldas and Poonamchand before the Income-tax Officer were material on which the income-tax authorities could act provided that the material was disclosed and the assessees had opportunity to render their explanation in that behalf. It was therefore open to the Tribunal in appreciating the evidence to rely upon the statements made by Achaldas and Poonamchand before the Income-tax Officer and to disbelieve the statements made by them before the Appellate Assistant Commissioner." To give wider power with a view to prevent the tax evasion, the Income Tax Act has been amended from time to time to answer the need of day and by amendment it has been provided that the authorities mentioned in Section 131 (1A) may also investigate such person or class of persons within their jurisdiction although no proc ..... 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