Mahesh Kumar Gupta Vs Union of India (Rajasthan High Court)
Summary: Rajasthan High Court declined to interfere with notices dated 13.07.2001 issued under Section 148 of the Income Tax Act, 1961 for Assessment Years 1995-96 to 1999-2000 and remitted the matter to the competent authority, leaving all issues and contentions open for adjudication by the Assessing Officer. The dispute originated from a survey and physical verification of stock at the petitioner’s brick kiln on 16.02.2000. The petitioner disputed the quantity recorded during the survey and maintained that stock records were kept only for fully manufactured bricks removed from the kiln after baking. Reassessment proceedings under Sections 147 and 148 followed, along with other notices. The petitioner contended that despite repeated requests, the reasons allegedly recorded before issuance of the Section 148 notices were never furnished; that all material facts had been disclosed; that there was no tangible material or live nexus supporting escapement of income; and that reopening amounted to a change of opinion.
The petitioner also alleged mala fides against respondent No. 2, including allegations concerning unpaid brick supplies, demands connected with the proceedings and a request for a luxury car. Revenue disputed those allegations and maintained that tangible material existed. According to Revenue, the survey conducted under Section 133A revealed excess stock of 19,16,084 bricks, cash-book discrepancies, negative cash balances, differences in recorded and actual sale rates and an admission of undisclosed income. Revenue also referred to substantial breakage-loss claims with incomplete supporting particulars and the alleged conversion of refundable performance security of about Rs.1.54 crore under a lease arrangement with M/s Kadamb Construction Ltd. into share capital. The Court noted that the petition had been instituted in 2001 and remained pending for nearly 25 years. It found itself unable to effectively adjudicate the factual controversy in writ jurisdiction because the disputed allegations could not be determined merely on competing affidavits and required examination and corroboration of documentary evidence and, if necessary, witness statements. .
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