GIRDHAR GOPAL GULATI Vs. UNION OF INDIA

JUDGEMENT

(1.) This writ petition has been filed for a writ of certiorari to quash the reassessment proceedings against the petitioner for the asst. yrs. 1996-97, 1997-98 and 1999-2000 initiated vide notices dt. 3rd March, 2003 for asst. yrs. 1996-97 and 1997-98 (Annexs. 7 and 8, respectively) and notices dt. 27th June, 2002 and 5th Feb., 2003 for asst. yr. 1999-2000 (Annexs. 6 and 9).

(2.) Heard learned counsel for the parties.

(3.) The facts of the case are that Girdhar Gopal Gulati, Sat Pal Gulati and Jagdish Kumar Gulati are real brothers who derive income from property. The petitioner Girdhar Gopal Gulati has l/3rd share in the property at 199, Transport Nagar, Kanpur-24, Chak Road, Allahabad, and United Tower at 2/1/3, Minhazpur Garhi, Allahabad. In asst. yr. 1994-95 the petitioner along with his two brothers started construction of the building at Minhazpur Garhi, Allahabad, and the construction was completed in asst. yr. 1998-99. The total required investment made in the construction of the building from asst. yr. 1994-95 to asst. yr. 1998-99 by the petitioner and his brothers allegedly totals Rs. 57,81,948. It has been shared by the petitioner and his brothers in equal proportion as disclosed by them in their IT returns. On 9th March, 2001, the assessing authority of the petitioner framed an assessment order in the case of the petitioner for asst. yr. 1998-99 under Section 143(3) of the IT Act. It is alleged in para 8 of the petition that during those proceedings the assessing authority had raised various queries requiring the petitioner and his brothers to give details of investment in the property at 2/1/3 Minhazpur Garhi, Allahabad. In reply thereto valuation report of an approved valuer was filed. The AO after necessary enquiry with regard to the income of properties as also with regard to investment in the construction and after considering the details of the cost of construction, passed the assessment orders. True copy of the assessment order for the asst. yr. 1998-99 is Annex. 1. Thereafter on 20th March, 2002, the CIT, Allahabad, passed order under Section 263 for asst. yr. 1998-99. He set aside that order as, in his view, the assessing authority had not made a proper enquiry regarding rental income from properties let out by the petitioner and investment in construction of property at Minhazpur, Allahabad. He directed the assessing authority to make a fresh assessment for that year by determining the value of the investment in property No. 2/1/3 Minhazpur Garni, Allahabad, after calling for and in accordance with the report of the valuation cell vide Annex. 2. Against the order of the CIT under Section 263, the petitioner and his two brothers filed appeal before the Tribunal, Allahabad, which was dismissed on 18th Oct., 2002. Against this order two appeals were filed in this Court which had been admitted and operation of the order of the CIT(A) have been stayed. In the meantime in compliance of the order of the CIT under Section 263 the District Valuation Officer in the Department prepared a valuation report and determined the value of the investment made by the petitioner in the building at Minhazpur, Allahabad. It is alleged that he prepared an abstract of the cost of construction on the basis of guesswork unfounded on any cogent material or evidence. In the meantime assessments of the petitioner and his brothers for asst. yrs. 1996-97, 1997-98 and 1999-2000 had also been completed and in all these years the accounts of the petitioner and his brothers had been accepted by their assessing authorities under Sections 143(3) of the Act for 1996-97 and 143(1)(a) for asst. yrs. 1997-98 and 1999-2000. In these assessments, the value of the investment made by the petitioner and his brothers in the property 2/1/3, Minhazpur, Garhi, Allahabad, was examined and had been accepted. True copy of the assessment order in the case of the petitioner for asst. yrs. 1996-97, 1997-98 and 1999-2000 are Annexs. 3, 4 and 5. It appears that subsequently on 27th June, 2003, the AO issued a notice to the petitioner under Section 148 seeking to reassess the petitioner for the asst. yr. 1999-2000 vide Annex. 6. Similarly, two notices were issued by the assessing authority seeking to reassess the petitioner for the asst. yrs. 1996-97 and 1997-98 vide Annexs. 7 and 8. Another notice dt. 5th Feb., 2003, was issued under Section 148 for asst. yr. 1999-2000 vide Annex. 9. The petitioner filed reply to the notice dt. on 27th July, 2002 and demanded a copy of the reasons to believe recorded by the AO. Thereafter the AO in August and September, 2003, supplied to the petitioner a copy of the reasons to believe vide Annexs. 10, 11 and 12.