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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 ..... ent-2) were well within his jurisdiction. Pendency of assessment proceedings - held that:- Use of the words "notwithstanding that no proceedings with respect of such person or class of person are pending before him or any other income-tax authority" used under Section 131 (1A), makes it clear that for exercising the jurisdiction under this section pendency of any matter before the income-tax authority is not a condition precedent. Person versus assessee - held that:- Learned counsel for the petitioner reads the word "person" as "assessee", which is not correct reading of section. - The word assessee is defined in Section 2(7) of the Act, which means by whom any tax or any other sum of money is payable under the Act. It is an inclusive definition. On a plain and simple reading of the aforesaid Sub-section (1A) of Section 131, the irresistible conclusion is that any person who is suspected to have concealed the income etc. within jurisdiction of the authorities mentioned in Sub-section (1A) of Section 131 of the Act, the authority concerned may issue notice for the purposes of investigation under Section 131(1A) of the Act. - Decided against the assessee. - Writ Tax No. 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and has it's manufacturing unit at Gangyal, in State of Jammu Kashmir. All the petitioners are income tax payee, having 'Permanent Account Numbers' and are regularly filing their returns before the Assessing Officer, Ward No. 4 and 23 (1), New Delhi. Deputy Director of Income Tax (Investigation), Moradabad (respondent-2) issued the notices dated 02.08.2010, in exercise of powers under Section-131 (1A) of the Act, requiring the petitioners to furnish information, regarding their source of income and if an assessee under the Act, details of income-tax return of last six of years, including of his family members, details of firm and company established by them and their family members and their income-tax returns, details of the banks and other deposits. Under the aforesaid notice, the required information has to be submitted up to 10.08.2010 but the petitioners have not submitted the required information as such another notice dated 18.08.2010 was issued, directing the petitioners to appear in person on 26.08.2010 along with the required information and the supporting documents. The petitioner has challenged the notice on the ground that he is a permanent resident of Greater Kaila ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s such he is an 'assessee', within the jurisdiction of Assessing Officer, at New Delhi, Deputy Director of Income Tax (Investigation), Moradabad (respondent-2) has no jurisdiction to issue any notice to the petitioner in exercise of powers under Section 131 (1A) of the Act. He further submitted that the powers enumerated under clauses (a) to (d) of Sub-Section (1) of Section 131 are analogous to the powers of the Court, vested in it, at the time of trial of the suit as such these powers has to be exercised only by the Assessing Officer at the time of assessment. Since no matter was pending before respondent-2 as such he had no occasion to exercise the powers under Section 131 (1A) of the Act. He further submitted that for exercising the powers under Section 131 (1A) of the Act, there must be reasons to suspect that income has been concealed. Respondent-2 has not recorded any such reason. As no matter was pending before respondent-2 as such, issue of the notice by him is a roving inquiry and exercise of power is baseless and amounts to harassment of the petitioner. 7. On the other hand, Senior Standing Counsel submitted that admittedly the petitioner has his ancestral house at Sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appointed under that sub-section to be an Additional Director of Income-tax or a Joint Director of Income-tax or an Assistant Director or Deputy Director of Income-tax" Thus from the aforesaid definition it is clear that Deputy Director of Income-tax can exercise the powers of Director of Income-tax under the Act. Deputy Director of Income-tax is an 'income-tax authority' under Section 116 (d) of the Act and is appointed by the Central Government, in exercise of powers under Section 117 (1) of the Act. 10. Section 120 of the Act deals with the jurisdiction of the income-tax authorities. Relevant part of Section 120 of the Act is quoted below:- 120. Jurisdiction of income-tax authorities:- (1) Income-tax authorities shall exercise all or any of the powers and perform all or any of the functions conferred on, or, as the case may be, assign to such authorities by or under this Act in accordance with such directions as the Board may issue for the exercise of the powers and performance of the functions by all or any of those authorities. Explanation:- For the removal of doubts, it is hereby declared that any income- tax authority, being an authority higher in rank, may, if so d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer under Section 132 and 135 of the Act are not exclusive. Under Section 120 (1) of the Act the Board is competent to assign jurisdiction on one or more authority. Section 135 provides that income-tax authority, while making an inquiry, shall have all the powers of Assessing Officers. Thus powers under Section 132 and 135 of the Act can be concurrently exercised by the Assessing Officer as well as other income-tax authorities. 13. Section 131 (1A) of the Act contemplates for a summary inquiry before exercising the powers of search and seizure under Section 132 of the Act. The purpose of such an inquiry is for the benefits of the persons or class of persons who are suspected to have concealed the income, so that the person or class of person may not be harassed by baseless search and seizure. The words "notwithstanding that no proceedings with respect of such person or class of person are pending before him or any other income-tax authority" used under Section 131 (1A) further makes it clear that jurisdiction of the Director is concurrent with the powers of Assessing Officer and has not been excluded under the Act. Thus the notices issued by Deputy Director of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l them here. For the sake of convenience, Section 131 (1A) of the Income Tax Act is reproduced below: "If the Director General or Director or Joint Director or Assistant Director, or Director or the authorised officer referred to in sub- section (1) of section 132 before he takes action under clauses (i) to (v) of that sub- section,] has reason to suspect that any income has been concealed, or is likely to be concealed, by any person or class of persons, within his jurisdiction, then, for the purposes of making any enquiry or investigation relating thereto, it shall be competent for him to exercise the powers conferred under sub- section (1) on the income- tax authorities referred to in that sub- section, notwithstanding that no proceedings with respect to such person or class of persons are pending before him or any other income- tax authority." The aforesaid section was inserted by Taxation Laws (Amendment) Act, 1975 with effect from 1.10.1975. Sub-section (1) of Section 131 confers power of civil court regarding discovery, production of evidence etc. on Assessing Officer, Deputy Commissioner (Appeals), Joint Commissioner, Commissioner (Appeals) etc. Sub-section (1A) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d "person" is defined under Section 2(31) of the Income Tax Act which includes - (i) an individual, (ii) Hindu Undivided Family, (iii) a company, (iv) a firm, (v) an association of persons or body of individuals, whether incorporated or not, (vi) a local authority, and (vii) every artificial person not falling with any of the proceeding sub-clauses. These are seven categories of assessee chargeable to tax. For the purposes, the Income Tax Act, "person" and "assessee" are different connotations. The word assessee is defined in Section 2(7) of the Act, which means by whom any tax or any other sum of money is payable under the Act. It is an inclusive definition. Thus, the definition of assessee covers two categories: First, persons by whom any tax, penalty or interest is payable under this Act, whether any proceeding under this Act has been actually taken against them or not; and Secondly, persons against whom any of the proceedings as specified in this clause has been taken, whether they are or are not liable to pay any tax, penalty or interest. Sections 4 and 5 of Income-tax levy tax on person. Section 2(31) lists seven categories of assessee or units of assessment under this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... object and purpose is served. By putting the interpretation sought to be given by the learned counsel for the petitioner, it would frustrate its aim and object and therefore such an interpretation that 'such person' or 'class of persons' should be read as 'such assessee' or 'class of assessee' before him would be an incorrect approach. We, therefore, do not find any substance in the above argument of the learned counsel for the petitioner. The second aspect of the matter is as to whether the petitioner is carrying on the business within the jurisdiction of the respondent no.2 or not. In paragraph 3 of the counter affidavit it has been stated that the petitioner is being investigated at Moradabad since the most of transactions of the petitioner pertain to Sambhal region which falls within the territorial jurisdiction of the respondent no.2. Further, in para-4 of the counter affidavit it has been stated that where the assessee has transactions spread over several places then the normal course is that wherever the transaction is to be investigated on would be done by the DDIT/ADIT (Inv.) of that region. After investigation a report will be sent to the concerned Assessing Officer for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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