RUSHIL INDUSTRIES LIMITED Vs. HARSH PRAKASH

JUDGEMENT

(1.) . After hearing the learned counsel, Rule is issued. Learned counsel for the Department waives service of Rule. Learned counsel for both the parties are finally heard.

(2.) . The petitioner, by way of this petition under Article 226 of the Constitution of India challenges the notice dated 29-8-2000 issued by the Joint Commissioner of Income Tax Rajkot (respondent) under the provisions of Section 158-BC r.w. Section 158-BD of the Income Tax Act, 1961. (`the Act' for short).

(3.) . According to the petitioner it has been regularly assessed for income tax under the Act. It is engaged in the business of ship breaking at Alang, District : Bhavnagar. According to the petitioner in the course of business it sells materials to several parties and receive the price of the same some times in cash and at times in cheques. In some cases, cheques are drawn by the debtors from their own bank accounts and at times the cheques are obtained from other concerned persons with whom the purchasers may have transactions. The purchase price so realised, however, is duly credited to the profit and loss account of the petitioner. As is stated, on affidavit-in-reply, by the respondent, Joint Commissioner of Income Tax, certain seizure operations were carried out against M/s. Mahendra H. Shah and Hemant C. Shah of Bhavnagar in exercise of powers under Section 132 of the Act. The petitioner's case is that during the course of search proceedings against the above two named persons with whom the petitioner has no direct concern, no books of accounts or documents or any assets belonging to the petitioners were discovered, so as to come to the conclusion against the petitioner that it had any undisclosed income, for resorting to his assessment for the block period in accordance with the provisions contained in Chapter XIV-B of the Act. The petitioner, therefore, has assailed and seeks quashing of the proceedings initiated by the respondent, Joint Commissioner of Income Tax, by notice dated 29-8-2000 at Annexure A, directing the petitioner in accordance with the provisions of Section 158-BC(a)(ii) of the Act to furnish the return for assessing him to income tax for the block period.