RINA SEN Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE proposition raised for consideration on which, it \s said, there is no precedent of this court, is straight and simple enough to admit of any doubt or dispute. THEre may of course be dispute regarding its application in the facts and circumstances of the particular case. THE petitioner has been served with a notice issued in terms of Section 131(1)(d) of the Income-tax Act (in short, "the Act"), in the matter of ascertainment of cost of construction of a house by the Assistant Valuation Officer, the Income-tax Department at the behest of the Income-tax Officer, Ward-III, Ranchi. She seeks quashing of the notice and' a declaration that the proposed investigation is illegal and without jurisdiction principally on the ground that an investigation of the kind can be made only in connection with and during pendency of a proceeding, and inasmuch as no proceeding is pending (or can be initiated) the proposed investigation is an abuse of the process of law and liable to be quashed. THE relevant facts are as follows .

(2.) THE petitioner purchased four kathas of land being portion of plot No. 1175 at Village Hesal (Aryapuri), Ratu Road, Ranchi, for a consideration of Rs. 2,000 on March 6, 1965. She got her name mutated in the revenue records of the State in Case No. 786 R-27 of 1965-66 by the Circle Officer, Ranchi. In furtherance of the said order of mutation a correction slip was issued in her name on January 4, 1966, and she was granted rent receipt. On December 28, 1966, the petitioner applied for permission to build a new house before the Executive Officer of the Ranchi Municipality along with a building plan. Permission was granted vide letter No. 376/B/Engineering of 1966 on July 15, 1967. It is said that after the sanction of the building plan, the petitioner started construction of the house some time in the year 1967 and constructed a major portion on the ground floor some time in the month of September, 1968. She thereafter applied for electric connection before the Ranchi Electric Supply Company Ltd. After due enquiry and verification an estimate was served on her on October 28/31, 1968. After deposit of the requisite amount on December 23, 1968, she was granted electric connection vide Consumer No. G. 3579. THE petitioner in course of time constructed the second storey in the month of December, 1973. THE total cost of construction of the entire building, according to her, was Rs. 30,000 approximately. She has been assessed to holding tax, etc., by the Ranchi Municipality, vide Holding No. 495 M2 with respect to the house since 1973-74. THE petitioner has annexed documents in support of her above-stated case regarding purchase of the land, mutation of name, sanction of building plan, grant of electric connection and municipal receipts.

(3.) MR. K.K. Jhunjhunwala, learned counsel for the respondents, did not, very fairly, dispute the proposition that commission can be issued under Section 131(1)(d) of the Act only in connection with a pending proceeding; he however, reiterated the stand of the respondents that by reason of the issuance of the notice, a proceeding within the meaning of Section 131 would be deemed to have commenced. Alternatively, he argued that the notice dated March 8, 1991 (supra), issued in terms of Section 143(2) of the Act asking the petitioner to appear and furnish information as may be required of her in connection with the assessment year 1990-91 would amount to commencement and pendency of proceeding.