ANAND PRAKASH AGRAWAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) By means of this writ petition the petitioner has prayed for the quashing of the notices dated 15.12.2004 and 16.12.2004 issued under Section 148 of the Income Tax Act by the Assistant Commissioner of Income Tax, Varanasi for the assessment years 1999-2000, 2000-01 and 2001-02. The facts leading to the filing of the writ petition is, that the petitioner filed his return for the assessment year 1999-2000, 2000-01 and 2001-02 under Section 139, which was accepted and intimation was given to the petitioner under Section 143(1) of the Act. Subsequently, a search and seizure operation was conducted under Section 132(1) of the Act at the residence of the petitioner as well as at his business premises at Varanasi and at Kolkata. Based on this search and seizure, block assessment order dated 20.12.2004 was passed under Section 158 BC of the Act for the period 01.04.1996 to 03.10.2002 which covered the assessment years 1999-2000, 2000-01 and 2001-02.

(2.) After passing of the block assessment order, the Additional Commissioner Income Tax, Varanasi issued a notice dated 15.12.2004 under Section 148 of the Act for the assessment years 1999-2000, 2000-01 and 2001-02 indicating therein that the Assessing Officer had reasons to believe that certain income chargeable to tax had escaped assessment for the year 1999-2000 and which has come to his notice subsequently and accordingly, directed the petitioner to submit his return of income within a specified period. Similar notice under Section 148 dated 15.12.2004 was issued for the assessment years 2000-01, 2001-02.

(3.) In view of the decision of the Supreme Court in GKN Driveshafts (India) Ltd. Vs. Income Tax Officer and others, 2003 259 ITR 19, the petitioner moved an application dated 25.02.2005 requesting the authority to supply him the reasons for re-opening the assessment proceedings. In response to the said application, the Assessing Officer supplied the reasons dated 10.01.2004 to the petitioner. The reasons so recorded for arriving at a belief that income had escaped assessment for the assessment year 1999-2000 is, that subsequent to the search and seizure operation which was carried out on 03.10.2002, post search enquiries were made and, it was found that the gift transaction shown in the return of income were not regular transactions but purely arranged transactions. It was found that the bank Account of three donors indicated that just before the date of issuing the gift cheque, there was no availability of fund and that one day before the issuance of the cheque, an amount was transferred in the said Account for the purpose of issuing the gift cheque. It was found that the donors were strangers and that none of the donors were related to the assessee's family. The post search enquiry further revealed that the father and mother received gift aggregating 382.5 lakhs during the assessment years 1998-2009 to 2003-2004. Prima facie, the Assessing Officer formed an opinion that the gift appeared to be not genuine and that the genuineness of the gift was required to be enquired into. The Assessing Officer accordingly formed an opinion that the assessee had understated the income within the meaning of Explanation 2(b) of Section 147 and that an amount of Rs. 20.05 lakhs received during the assessment year 1999-2000 as gift, had escaped assessment. Similar reasons were given for the assessment year 2000-01 with regard to gift of Rs. 47.07 lakhs and Rs. 35.00 lakhs for the assessment year 2001-02.