HIGH COURT OF MADRAS
K. Sakthivel
versus
Assistant Commissioner of Income-tax
TC (A) NO. 1083 OF 2005
JUNE 14, 2012
JUDGMENT
Mrs. Chitra Venkataraman, J.
The assessee is on appeal as against the order of the Income Tax Appellate Tribunal relating to assessment year for the period 1.4.1989 to 1990-91. The above Tax Case (Appeal) was admitted on the following substantial questions of law:-
“(a) Whether the notice issued under Sec.158 B.D. of the Income Tax Act, 1961 is sustainable in law if it does not mention the block period ?
(b) Whether non-mentioning of the block period in the notice could be characterized as a curable defect, particularly in the teeth of judgments reported in:
(1) Verma Roadways v. Asstt. Commissioner of Income Tax 75 I.T.D. 183 (All)
(2) Narayana Chetty v. I.T. Officer 35 I.T.R. 388 (SC)
(3) CIT v. Kurpan Hussain 82 I.T.R. 821 (SC)
(4) Nyalchand Malukchand Dagli v. CIT Gujarat 59 I.T.R. 24 (Guj)
(5) Sastkumar v. CIT 170 I.T.R.80 (Ker)
(6) CIT v. Hindustan Motors Ltd. 107 I.T.R. 164 (Cal)
(7) Indian Banks Assn. v. Devkala Consultancy 267 I.T.R.179
(c) Whether the finding of the Income Tax Appellate Tribunal that provision of Order 18 Rules 5 and 9 Code of Civil Procedure and Section 164 Cr. P.C. need not be followed while recording a confessional statement under sec.131 of the Income Tax Act, 1961 is sustainable in law, in view of the specific language of sec.131(1) and sec.132(4) of the Income Tax Act, 1961?
(d) Whether an order of assessment could be passed merely upon a statement u/s 131 without any corroborative material?”
2. The assessee also raised additional questions of law which are as follows:-
(a) Whether a notice issued under Section 158BD of the Income Tax Act, 1961 is valid if the Assessing Officer never recorded his satisfaction in the said notice that the alleged undisclosed income belonged to the Appellant?
(b) Whether the respondent could have issued a notice under Section 158BD of the Income Tax Act, 1961 without following the procedure prescribed under Section 158BC of the Income Tax Act, 1961 and without conducting a search on the appellant under Section 132 of the Income Tax Act, 1961?”
3. It is seen from the facts narrated that the search was conducted in residential and business premises of one V.S. Kathirvel on 22.6.1999 and concluded on 19.8.1999. During the course of the search, various incriminating documents were seized from the residential and business premises of V.S. Kathirvel. It was seen that he had indulged in unaccounted real estate transaction. Some of the documents pertained to the transaction with the assessee who had purchased 3 acres of land from V.S. Kathirvel for a consideration of Rs. 9,75,000/-. Enquiry proceedings were initiated against the assessee. The assessee participated in the enquiry proceedings and had given sworn statement on 5.8.1999 under Section 131 of the Income Tax Act. In answering the enquiry, the assessee is stated to have made the following statements, which, as recorded in the order of assessment and appeal, is the translation of the statement recorded in Tamil, which reads as under:-
“Q9. I am showing the original sale deed of Rs. 1,99,000/- purchased on 6.12.1995. This land of 3 acres was purchased on 6.12.95. Pl. State how much you gave and to whom? Whether this amount was accounted?
Ans. I bought the above land of 3 acres through Sri. V.S. Kathirvel, Komarapalayam. Before buying this property, myself and V.S. Kathirvel made an agreement and I paid in cash towards the consideration. Since I have paid all the amount as per agreement, now do not have that agreement. According to that agreement, 1 acre = Rs. 3,25,000/-, totalling to Rs. 9,75,000/- for three acres. This amount was given by me to V.S. Kathirvel i.e. Rs. 9,75,000/-. Later on 6.12.96, a sale deed was registered in my name for 3 acres. I paid the entire amount in cash before the date of registration. But I do not know the exact dates. The registration was made for Rs. 1,95,000/- only. The remaining amount was given as on-money. In this, Rs. 1,95,000/- was accounted for and the remaining amount of Rs. 7,80,000/- was not shown in my books of account.
Q10. On 22.6.99, a search was conducted in the office premises of Sri. V.S. Kathirvel, Komarapalayam. During the course of search, a loose bunch in NR/B & D/ S-30 was seized. In this loose bunch, sheet Nos. 159, 155 and 143, some amounts are credited in the name of PMS and in Sheet No. 155, an account was written under the PMS A/c.
