Vipin Kumar Agrawal vs. Chief Commissioner Income Tax

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WP/3020/2016HC Madhya Pradesh28 February 2024Bench: HON'BLE THE CHIEF JUSTICE3 pages
For Petitioner: Manikant Sharma
AI SummaryDisposed Of

What did the High Court hold?

The High Court held that the grievance of the petitioner has been answered. The Court noted that the Income Tax Department had already taken action, including conducting an inquiry and a survey under Section 133-A of the Income Tax Act, 1961. During the survey, it was found that the assessee (Respondent No. 3) claimed Rs. 28,00,000/- as donations but could not substantiate the source, and appropriate orders were issued. Since these actions were concluded in 2018, the Court found that nothing further survived for consideration. The writ petition was disposed of, with liberty reserved for the assessee or any aggrieved party to take recourse to law as permissible. The Court did not decide on the merits of the alleged illegal claim of exemption but rather on the fact that the department had acted upon the matter.

What were the facts?

The petitioner, Vipin Kumar Agrawal, filed a writ petition seeking an inquiry into the alleged illegal claim of exemption by the 'Friends Welfare Education Society, Harda' and action against responsible persons. Respondents No. 1 and 2 (Chief Commissioner Income Tax and Assistant Commissioner Income Tax) filed a status report indicating that an inquiry report was submitted on June 16, 2016. Subsequently, a survey action under Section 133-A of the Income Tax Act, 1961, was conducted on March 20, 2018. During the survey, it was observed that the assessee (Respondent No. 3) claimed Rs. 28,00,000/- as donations received but could not substantiate the source. Appropriate orders were issued thereafter. The Court noted that action had been taken and concluded by 2018, rendering the petitioner's grievance answered.

What were the issues?

1. Whether the Income Tax Department has taken appropriate action regarding the alleged illegal claim of exemption by the 'Friends Welfare Education Society, Harda' and the unsubstantiated donations received by it, as per the Income Tax Act, 1961? Assessee's Contention (Petitioner): The petitioner sought a direction for the Income Tax authorities to conduct an inquiry into the illegal claim of exemption by the Society and to take necessary action against the responsible persons. The petitioner's primary concern was the alleged misuse of tax provisions by the Society. Revenue's Contention (Respondents No. 1 & 2): The revenue submitted that an inquiry report was filed, and a survey action under Section 133-A was conducted. During the survey, it was found that the Society claimed Rs. 28,00,000/- as donations but could not substantiate their source, and appropriate orders were subsequently issued. The revenue contended that the actions taken have addressed the petitioner's grievance.

Which sections of the Income-tax Act were involved?

Section 133-A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF MADHYA PRADESH AT JABALPUR BEFORE HON'BLE SHRI JUSTICE RAVI MALIMATH, CHIEF JUSTICE & HON'BLE SHRI JUSTICE VISHAL MISHRA ON THE 28th OF FEBRUARY, 2024 WRIT PETITION No. 3020 of 2016 BETWEEN:- VIPIN KUMAR AGRAWAL S/O RADHESHYAMJI AGRAWAL, AGED ABOUT 52 YEARS, SAUBHAGYA LAXMI PARISHAR CHEEPANER ROAD HARDA (MADHYA PRADESH) .....PETITIONER (BY SHRI MANIKANT SHARMA - ADVOCATE) AND 1. CHIEF COMMISSIONER INCOME TAX BHOPAL INCOME TAX BHAWAN HOSHANGABAD ROAD BHOPAL (MADHYA PRADESH) 2. ASSISTANT COMMISSIONER INCOME TAX CIRCLE 1 , BHOPAL, INCOME TAX BHAWAN, HOSHANGABAD ROAD BHOPAL (MADHYA PRADESH) 3. PRESIDENT, NAVNEET PATEL FRIENDS WELFARE EDUCATION SOCIETY R/O LAL BAHADUR SHASTRI WARD, HARDA DISTRICT HARDA (MADHYA PRADESH) 4. SURENDRA JAIN S/O KANHAIYALAL JAIN OCCUPATION: EX PRESIDENT , FRIENDS WELFARE EDUCATION SOCIETY, HARDA, R/O LIG COLONY, HARDA (MADHYA PRADESH) 5. SADHNA JAIN W/O SUREDRA JAIN R/O L.I.G.COLONY, HARDA (MADHYA PRADESH) 6. SARGAM JAIN S/O AMRITLAL JAIN R/O MAIN 1 Signed by: SHALINI LANDGE Signing time: 2/29/2024 10:50:24 AM Signature Not Verified ROAD, HARDA (MADHYA PRADESH) 7. RAJEEV JAIN S/O AMRITLAL JAIN R/O MAIN ROAD, HARDA (MADHYA PRADESH) 8. REKHA PATEL W/O KAMAL PATEL VILL. RATATALAI, TEHSIL AND DIST. HARDA (MADHYA PRADESH) 9. SANDEEP PATEL S/O KAMAL PATEL R/O VILL. RATATALAI, TEHSIL AND DISTRICT HARDA (MADHYA PRADESH) 10. LOKESH PATEL S/O NATWARLAL PATEL LAL BAHADUR SHASTRI WARD, HARDA (MADHYA PRADESH) 11. NAVNEET PATEL S/O VIRJI BHAI PATEL R/O LAL BAHADUR SHASTRI WARD, HARDA (MADHYA PRADESH) .....RESPONDENTS (SHRI SIDDHARTH SHARMA - ADVOCATE FOR RESPONDENTS NO.1 AND 2 AND SHRI AMIT SAHANI - ADVOCATE FOR RESPONDENTS NO.10 AND 11) This petition coming on for hearing this day, Hon'ble Shri Justice Ravi Malimath, Chief Justice passed the following: ORDER The present petition has been filed seeking the following reliefs :- "7.1 That, it is therefore, prayed that this Hon'ble Court may kindly be pleased to issue an appropriate writ/order/direction directing respondents No.1 & 2 to hold an enquiry with respect to illegal claim of exemption by the 'Friends Welfare Education Society, Harda' under the provisions of Income Tax Act and further to take necessary actions under the provisions of Income Tax Act against the responsible persons. 7.2 That, this Hon'ble Court may please to grant any other relief as deemed just and proper in the facts and circumstances of the case." 2. The learned counsel appearing for respondents No.1 and 2 has filed his additional reply/status report along with documents. In pursuance whereof, it is 2 Signed by: SHALINI LANDGE Signing time: 2/29/2024 10:50:24 AM Signature Not Verified (RAVI MALIMATH) CHIEF JUSTICE (VISHAL MISHRA) JUDGE indicated that an enquiry report has been submitted by the Income Tax (Exemption), Bhopal with respect to instant writ petition on 16.06.2016. Survey action under Section 133-A of the Income Tax Act,1961 was carried out by the department on 20.03.2018. Some of the observations made are to the extent that the deposit was made by the assessee namely the respondent No.3. It was found that the assessee claimed Rs.28,00,000/- as donation received but the assessee could not substantiate the source of the donations. Therefore, appropriate orders have also been issued. 3. Under these circumstances, it could be seen that the action has already been taken and concluded in the year 2018. Hence, we are of the view that the grievance of the petitioner has since been answered. Therefore, nothing further survives for consideration in the matter. 4. The writ petition is disposed off. 5. Liberty is always reserved with the assessee or anyone aggrieved to take recourse to law as permissible. SSL

3 Signed by: SHALINI LANDGE Signing time: 2/29/2024 10:50:24 AM Signature Not Verified

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