- (1.) In the present writ petition the petitioner has claimed the following reliefs: (a) Issue a writ, order or direction in the nature of certiorari quashing the impugned notices dated May 13, 2004 (annexure 12) issued by respondent No. 1 under Section 143(2) of the Income-tax Act, 1961 for the assessment years 1998-99, 1999-2000, 2000-01 and 2002-03. (b) Issue a writ, order or direction in the nature of certiorari quashing the impugned notice dated March 22, 2004 (annexures 4, 5, 6 and 7) issued by respondent No. 1 under Section 148 of the Act for the assessment years 1998-99, 1999-2000, 2000-01 and 2002-03. (c) Issue a writ, order or direction in the nature of prohibition restraining respondent No. 1 from proceeding ahead in pursuance of the impugned notice dated May 13, 2004, issued under Section 143(2) of the Act and the notices dated March 22, 2004 to reassess the petitioner under Section 148 of the Income-tax Act. (d) Issue any other writ, order or direction, which this hon'ble court may deem fit and proper in the circumstances of the case. (e) Award costs of the petition to the petitioner.
(2.) The brief facts of the case giving rise to the present petition are that the petitioner was a partnership firm and engaged in the business of manufacturing and sale of woollen carpets. The petitioner was also exporter and was exporting goods outside the country and being exporter the petitioner was entitled for the exemption under Section 80HHC of the Income-tax Act (hereinafter referred to as "the Act"). For the assessment years 1998-99, 1999-2000, 2000-01 and 2002-03, the petitioner had filed income-tax returns along with audit reports under Section 44AB of the Act before the Income-tax Officer, Ward -I, Varanasi. For the assessment years 1998-99, 1999-2000 and 2001-02, the petitioner had disclosed nil income and for the assessment year 2002-03, the petitioner had disclosed net income at Rs. 2,20,410. The returns for all the assessment years had been processed and accepted summarily under Section 143(1)(a) and intimations in this regard had been sent to the petitioner. As per the petitioner, the factory building was constructed on Plot Nos. 217/4/3, 217/5/3 and 217/5/4 at Maryadapatti, Bhadohi in the assessment years 2000-01, 2001-02, 2002-03 and 2003-04 and the factory building at Barhi Newada, Varanasi was constructed in the assessment years 1998-99 and 1999-2000. The petitioner has disclosed the following investments in the construction of the building in the respective years: Fadoru building at Factory Building at Maryadapatti, Bhadohi Barhi Newada, Varanasi Assessment Rs. Rs. years 1998-99 16,38,476 1999-2000 11,71,738 2000-01 10,02,482 2001-02 10,64,670 2002-03 17,94,366 2003-04 16,55,170
(3.) For the assessment year 2001-02, the petitioner had filed return declaring an income of Rs. 55,430 along with audit report, audited balance-sheet, trading and profit and loss account etc. The return was processed and disclosed income was accepted under Section 143(1)(a) of the Act summarily. The case for the assessment year 2001-02 was selected for scrutiny and accordingly the assessing authority issued the notices under Sections 143(2) and 142(1) of the Act. During the course of the assessment proceedings, the assessing authority noticed the investment at Rs. 10,64,669.90, in the construction of the factory building at Maryadapatti, Bhadohi. The assessing authority referred the matter to the Departmental Valuation Officer, Kanpur. The reference was made to determine the costs of construction in respect of the factory building constructed at Maryadapatti, Bhadohi as well as Barhi Newada, Varanasi. The Valuation Officer submitted his report. As per valuation report, there were differences in the expenses incurred in the construction of the factory building as shown by the assessee in the aforesaid years. The following costs of construction were estimated by the Departmental Valuation Officer, Kanpur: Factory building at Factory building at Maryadapatti, Barhi Newada, Assessment Bhadohi Varanasi year Disclosed Estimated Differences Disclosed Estimated Differences Rs. Rs. Rs. Rs. Rs. Rs. 1998-99 16,38,476 14,94,300 3,22,562 1999-00 11,71,738 20,89,600 4,51,124 2000-01 10,02,482 12,05,900 2,03,418 2001-02 10,64,670 12,80,700 2,16,030 2002-03 17,94,366 21,58,400 3,64,034 2003-04 16,55,170 19,91,000 3,58,830 ;