RATTAN GUPTA Vs. UNION OF INDIA

JUDGEMENT

(1.) IN respect of the asst. year 1990 -91, the return of income was filed by the writ petitioner on 22nd Oct., 1991, declaring an income of Rs. 72,940. The assessment was completed on 23rd Jan., 1993, on the income of Rs. 88,440. The assessment was made under S. 143(3) of the INCOME TAX ACT, 1961 (for short "the Act"). The ITO, Ward 13(5), New Delhi, has issued to the petitioner a notice dt. 3rd May, 1993, under S. 148 of the Act for the asst. year 1990 -91 stating that he has reason to believe that income chargeable to income -tax has escaped assessment within the meaning of S. 147 of the Act and he, therefore, proposes to reassess the income for the said assessment year. The petitioner was required within 30 days from the date of the service of the notice to file a return in the prescribed form. The petitioner says that he objected to the reopening of the assessment and requested for supply of the reasons on the basis of which the notice under S. 148 of the Act was issued. The reasons for reopening the assessment which have since been supplied to the petitioner are these :

(2.) THE petitioner assails the validity of the notice dt. 3rd May, 1993. According to the petitioner, no information or material was available with the AO on the basis of which a reasonable belief could be formed that income chargeable to tax has escaped assessment. It is claimed that the issue of the impugned notice is without jurisdiction since the pre -conditions for exercise of power do not exist in the case. The petitioner says that the AO is only making roving and fishing enquiries which is not permissible and is outside the scope of S. 147 of the Act.

(3.) THE reasons reproduced above, inter alia, refer to receipt by the AO of letter dt. 17th Feb., 1993, from the Asstt. CIT, Investigation Circle 14(1), New Delhi, stating that the assessee is earning income in benami names and money totalling Rs. 15 crores approximately in the form of bank drafts purchased in smaller towns of the country by four Sikkim companies floated by the Dalmia group was received in the office of the assessee and further in search and seizure operations conducted on 15th March, 1990, certain cash and jewellery was found but it was not seized whereas books of account and other documents were seized. It is further stated in the reasons that, in order to properly conduct the investigation to find out the involvement of the assessee in the transactions of the money amounting to Rs. 15 crores and to ascertain the extent of concealed income of the assessee and to bring the same to tax reopening of the assessment is imperative. The letter dt. 17th Feb., 1993, has been placed on record. It would be useful to reproduce the said letter as under: