P. Shanatugam, J. Petitioner is an assessee under the IT Act. A notice issued under s. 158BD of the Act by the Asstt. CIT, Investigation Circle, Kottayam, is challenged in this writ petition.
2. Learned senior counsel. Mr. Ramachandran made two submissions. According to him the 3rd respondent has no jurisdiction in the matter. He submits that Ext. P3(a) notification enabling the Asstt. CIT, Investigation Circle to exercise jurisdiction for the connected cases/persons also, cannot apply to the cease of the petitioner. Petitioner is an independent assessee and her case cannot be said to be connected with the assessment of her husband, Mr. M.K. Thankachan. The expression "connected case" has no legal connotation and, therefore, unless the Asstt. CIT records his satisfaction that undisclosed income belongs to the petitioner, he cannot proceed with the assessment.
2. Learned senior counsel. Mr. Ramachandran made two submissions. According to him the 3rd respondent has no jurisdiction in the matter. He submits that Ext. P3(a) notification enabling the Asstt. CIT, Investigation Circle to exercise jurisdiction for the connected cases/persons also, cannot apply to the cease of the petitioner. Petitioner is an independent assessee and her case cannot be said to be connected with the assessment of her husband, Mr. M.K. Thankachan. The expression "connected case" has no legal connotation and, therefore, unless the Asstt. CIT records his satisfaction that undisclosed income belongs to the petitioner, he cannot proceed with the assessment.
3. The learned senior standing counsel Mr. Raveendranatha Menon while countering the said argument has submitted that s. 177(3) is the direct answer to the point raised on behalf of the petitioner. According to this provision, no opportunity need be given to the assessee for a transfer from any AO or any other AO if the offices of all such officers are situated in the same city/locality or place. In this case, the file has been transferred from ITO, Ward-3, Kottayam to Asstt. CIT, Investigation Circle, Kottayam. Ext. R3(A) notification empowers the Asstt. CIT, Investigation Circle, having jurisdiction over the persons where action under s. 132 has been carried out, jurisdiction over connected persons also. Sec. 158BD of the Act authorises to proceed against any person other than the person with respect to whom search was made under s. 132 of the Act, if the officer is satisfied that any undisclosed income belongs to him or her. In the light of large volume of undisclosed income out of bank accounts in the name of petitioner, the AO has reasons to proceed under Chapter XIV of the Act. Hence no opportunity need be given to the petitioner before such transfer.
3. The learned senior standing counsel Mr. Raveendranatha Menon while countering the said argument has submitted that s. 177(3) is the direct answer to the point raised on behalf of the petitioner. According to this provision, no opportunity need be given to the assessee for a transfer from any AO or any other AO if the offices of all such officers are situated in the same city/locality or place. In this case, the file has been transferred from ITO, Ward-3, Kottayam to Asstt. CIT, Investigation Circle, Kottayam. Ext. R3(A) notification empowers the Asstt. CIT, Investigation Circle, having jurisdiction over the persons where action under s. 132 has been carried out, jurisdiction over connected persons also. Sec. 158BD of the Act authorises to proceed against any person other than the person with respect to whom search was made under s. 132 of the Act, if the officer is satisfied that any undisclosed income belongs to him or her. In the light of large volume of undisclosed income out of bank accounts in the name of petitioner, the AO has reasons to proceed under Chapter XIV of the Act. Hence no opportunity need be given to the petitioner before such transfer.
4. The second and the main submission on behalf of the petitioner is that Chapter XIV-B is a special provision for assessment of search cases and, therefore, a notice cannot be issued unless the AO is objectively satisfied that the undisclosed income belongs to the petitioner. According to him, Ext. P1 assessment order in reference to Mr. M.K. Thankachan, the husband of the petitioner, clearly admits that the bank accounts in the name of the petitioner is the undisclosed income of Mr. Thankachan in which case it is not open to the officer to come to the conclusion that the undisclosed income belongs to the petitioner. He also derives support from the statement filed on behalf of the respondents to the effect that no cash or jewellery was seized, but only certain records were seized from the premises as per Panchanama. It is also stated that it is true that in the said assessment order it is observed that the bank accounts of the petitioner and the minor children are out of undisclosed income of her.
4. The second and the main submission on behalf of the petitioner is that Chapter XIV-B is a special provision for assessment of search cases and, therefore, a notice cannot be issued unless the AO is objectively satisfied that the undisclosed income belongs to the petitioner. According to him, Ext. P1 assessment order in reference to Mr. M.K. Thankachan, the husband of the petitioner, clearly admits that the bank accounts in the name of the petitioner is the undisclosed income of Mr. Thankachan in which case it is not open to the officer to come to the conclusion that the undisclosed income belongs to the petitioner. He also derives support from the statement filed on behalf of the respondents to the effect that no cash or jewellery was seized, but only certain records were seized from the premises as per Panchanama. It is also stated that it is true that in the said assessment order it is observed that the bank accounts of the petitioner and the minor children are out of undisclosed income of her.