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2024 Supreme(Online)(MAD) 11836
IN THE HIGH COURT OF JUDICATURE AT MADRAS Reserved on 21.12.2023 Pronounced on 23.02.2024 CORAM THE HON'BLE Mr. JUSTICE KRISHNAN RAMASAMY W.P.Nos.9753, 9757, 9761 & 11176 of 2023 and W.M.P.Nos.11043, 9838, 9842 & 11041 of 2023 M/s.Saravana Selvarathnam Retails Private Limited, Rep by its Director, Mr.Saravana Arul, No.14, Ranganathan Street, T.Nagar, Chennai 600 017.
... Petitioner in W.P.No.9753 of 2023 M/s.Shri Rathna Akshaya Estates Private Limited, Represented by its Director, Mr.Saravana Arul, No.241, Avadi Poonamallee Road, Kaduvetti, Veeraraghavapuram, Chennai 600 017.
... Petitioner in W.P.No.9757 of 2023 M/s.Saravana Selvarathnam Trading and Manufacturing Private Limited, Represented by its Director, Mr.Saravana Arul, No.14, Ranganathan Street, T.Nagar, Chennai 600 017.
... Petitioner in W.P.No.9761 of 2023 Vs.
1.The Commissioner of Income Tax Appeals, New No.46, M.G.Road, Chennai 600 034.
2.The Assistant Commissioner of Income Tax, Central Circle 1(2), Office of the Assistant Commissioner of Income Tax, Central Circle 1(2), New No.46, M.G.Road, Chennai 600 034.
3.The Deputy Director of Income Tax (Investigation Unit 4(4)), Nungambakkam, Chennai 600 034.
[*** The name of R2 was deleted vide order dated 29.03.2023 made in W.P.No.9753, 9757 & 9761 of 2023.
*** The R3 was suo motu impleaded vide order dated 05.04.2023 made in W.P.No.9753, 9757 & 9761 of 2023]
... Respondents in WP.Nos.9753, 9757 & 9761 of 2023 W.P.No.11176 of 2023:
M/s.Saravana Selvarathnam Trading and Manufacturing Private Limited, Represented by its Director, Mr.Saravana Arul, No.14, Ranganathan Street, T.Nagar, Chennai 600 017.
... Petitioner Vs.
1.The Assistant Commissioner of Income Tax, Central Circle 1(2), Office of the Assistant Commissioner of Income Tax, Central Circle 1(2), New No.46, M.G.Road, Chennai 600 034.
2.The Deputy Director of Income Tax (Investigation Unit 4(4)), Nungambakkam, Chennai 600 034.
[*** The R3 was suo motu impleaded vide order dated 12.09.2023 made in W.P.No.11176 of 2023]
... Respondents Prayer in W.P.No.9753, 9757 and 9761 of 2023:
Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Declaration, to declare that the seizure of the .txt files by the 2nd respondent from an undisclosed location is not in accordance with law and therefore is inadmissible in evidence.
Prayer in W.P.No.11176 of 2023:
Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorari, to call for the records of the 2nd respondent culminated in the impugned order – ITBA/AST/S/147/2022-
23/1051677092(1) dated 30.03.2023 for the Assessment Year 2018-19 under Section 147 of the Income Tax Act, 1961 and consequential Demand Notice- ITBA/AST/S/156/2022-23/1051677452(1) dated 30.03.2023 issued under Section 156 of the Income Tax Act, 1961 and quash the same as illegal, arbitrary and devoid of merits.
For Petitioner in all petitions : Mr.P.H.Arvind Pandiyan, Senior counsel Mr.J.Sivanandaraj, Senior counsel Assisted by Mr.S.Kaushik Ramaswamy for Mr.Akhil R.Bhansali For Respondents in all writ petitions : Mr.AR.L.Sundaresan, Additional Solicitor General of India Assisted by Mr.A.P.Srinivas, Senior Standing counsel, and Mr.A.N.R.Jayaprathap, Junior Standing counsel.
COMMON ORDER
The writ petitions in W.P.Nos.9753, 9757 and 9761 of 2023 have been filed to declare that the seizure of the .txt files by the 2nd respondent from an undisclosed location is not in accordance with law and therefore is inadmissible in evidence.
2. The writ petition in W.P.No.11176 of 2023 has been filed challenging the impugned order dated 30.03.2023 and consequential demand notice dated 30.03.2023.
3. In the present case, the 2nd respondent had passed three assessment orders dated 31.12.2022, against which the writ petitions in W.P.No.9753, 9757 and 9761 of 2023 have been filed challenging the admissibility of evidence. Subsequent to the filing of the above writ petitions, the respondents had passed another assessment order dated 30.03.2023 without providing any opportunity of personal hearing to the petitioner and in violation of principles of natural justice and hence, challenging the same, the writ petition in W.P.No.11176 of 2023 has been filed by the petitioner.
4. The case of the petitioner is that the respondents-Department had conducted a sudden search under Section 132 of the Income Tax Act, 1961 (hereinafter called as “the Act”) on different dates between 01.12.2021 and 27.01.2022. In the said searches, the 2nd respondent had seized the electronic data and pursuant to the same, the Show Cause Notices dated 21.12.2022 and 22.12.2022 were issued to the petitioner and the reply was filed by the petitioner on 24.12.2022 and 28.12.2022. Subsequently, the assessment orders were passed on 31.12.2022. As far as the subject matter relating to W.P.No.11176 of 2023 is concerned, the Show Cause Notice was issued on 01.03.2023 and the reply was filed on 14.03.2023 and 15.03.2023. Subsequently, the assessment order was passed on 30.03.2023.
5. The main grievance of the petitioner was that the digital data evidences were collected by the respondents from unknown locations without any valid search warrant and without following the guidelines issued by the CBDT vide Digital Evidence Investigation Manual. Further, without providing any opportunity of personal hearing to the petitioner and without any corroborative evidence to corroborate the digital data evidences as mandated in the Digital Evidence Investigation Manual, four non-speaking assessment orders were passed by the respondents. In total, the respondents are intended to initiate 21 proceedings, out of which, now they have only initiated four proceedings and passed the assessment orders on 31.12.2022 in three cases and on
30.03.2023 in one case.
6. The respondents had filed the counter and raised the issue of maintainability of the present writ petitions on the ground that the certain assessments have been completed and the petitioner had also filed the statutory appeals before the 1st respondent and thus, the writ petitions are not maintainable. Further, he would contend that the evidentiary value has to be appreciated by the Appellant Authority and hence, the writ petitions are not maintainable. He would also contend that the writ petitioner cannot ride two horses at the same time and the petitioner having chosen to file the appeal ought to have pursue the same and hence, the writ petitions are not maintainable.
7. He would further contend that the writ of declaration regarding the evidentiary value is not maintainable and as the assessment is completed and appeal is pending before the Appellate Authority, the petitioner has to agitate all the issues before the Appellate Authority. The admissibility, nature of evidence and the manner of proof cannot be questioned in the writ petitions.
8. In this regard, he referred to the judgement of the Hon'ble Apex Court rendered in “Dhakeswari Cotton Mills Limited vs. Commissioner of Income Tax” reported in (1954) 26 ITR 775 (SC). By referring to the said judgement, he would submit that the Income Tax Officer is not fettered by technical rules of evidence and pleadings, and that he is entitled to act on material which may not be
