C.V. Dayanandan vs Union of India (UOI) and Others

G. Sivarajan, J.—The petitioner was the proprietor of a jewellery by name "Subhash Jewellery" in Payyannur. The fifth respondent is also conducting a jewellery business by name "Pavithram" in Payyannur. They are first cousins. According to the petitioner, the fifth respondent, who is the proprietor of Pavithram Jewellery was a goldsmith, that he started goldsmith work and had amassed substantial assets by converting black money into white money through his benamis. The petitioner has filed this original petition seeking for direction to respondents Nos. 2 to 4 to enquire into the assets of the fifth respondent on the basis of the complaints, information and encumbrance certificates exhibits P13 to P16 and take appropriate action against him in accordance with law. It is stated in the original petition that the fifth respondent has got landed properties worth about Rs. 5 crores, that he purchased Panchami jewellery shop in Payyannur town for about Rs. 13 lakhs, that he also purchased a medical shop for about Rs. 2 lakhs and that it is understood that the other assets and earnings of the fifth respondent are partnership in Arathi Textiles at Kozhikode, Pournami Jewellery, etc. According to the petitioner, the fifth respondent earned all these assets without disclosing the source of income or paying Income Tax and thereby caused huge loss to the Government. According to the petitioner, he had made so many representations to respondents Nos. 2 to 4 pointing out the said facts, but the respondents have not taken any action against the fifth respondent under the provisions of the Income Tax Act.

A counter affidavit is filed by the fifth respondent. It is stated therein that the petitioner was also having a jewellery shop by name "Subhash Jewellery" in Payyannur, that he could not make any progress in his business on account of his indifference and his customers lost confidence in him and that he is now devoting most of his time in anti-social activities. It is also stated that the fifth respondent is a regular assessee to Income Tax, submitting regular returns of income from the year 1981 onwards and that every year his accounts were being scrutinised by the Income Tax Department and all his savings are fully accounted before the Income Tax authorities. It is also stated that the petitioner has been making false complaint against the fifth respondent and his children and are making all sorts of wild, imaginary and baseless allegations, that he has filed as many as nine complaints before the Income Tax Department during the past one decade and that all these complaints were enquired into by the competent authority and the allegations were found to be baseless, frivolous and vexatious.

The second respondent has filed a statement. It is stated therein that the fifth respondent and his sons, Sri O.K. Pavithran, Sri O.K. Rajeevan and Sri O.K. Sumithran, are Income Tax assessees and are filing their Income Tax returns regularly, that the fifth respondent is an Income Tax payer since 1983-84 onwards and the source of funds for starting the business and source of investment in immovable properties were examined by the Assessing Officer. It is further stated that the fifth respondent and his family also availed of the VDIS, 1997, and declared a total sum of Rs. 41,22,415 and paid tax of Rs. 12,36,726, evidenced by exhibit R-2(c). The source of investment in house construction was verified by the Income Tax Officer while completing the Income Tax assessment for the relevant assessment year. Bank accounts were also perused. Landed properties were purchased during the last 30 years and most of them are for small amounts and that a few properties were later sold. Regarding the acquisition of properties in benami names there is nothing to substantiate the allegations. The allegations made by the petitioner in various representations were enquired into and it was not found to be a fit case for action u/s 132 of the Income Tax Act, 1961. It is also stated that the power to search and survey vested with the Department cannot be misused simply on receipt of petition containing various allegations of tax evasion, that such action can be taken after proper enquiries and ascertaining the factual position and that the allegations were found to be without substance and hence no action possible.

Sri K. Chandrasekharan, senior counsel for the petitioner, submits that the fifth respondent who was a goldsmith without any original source has established jewellery shops, textile shops and had also amassed wealth in crores without disclosing the source and paying Income Tax. Senior counsel also submits that though the petitioner has made so many representations pointing out the illegal assessment of the wealth, the Income Tax Department did not take any action against the fifth respondent and his children. Senior counsel further submits that the Income Tax Department is not taking any action only to help the fifth respondent and that corruption is rampant in this Department also. Senior counsel also pointed out that the second respondent in the latest statement has admitted that the fifth respondent and his family had disclosed an undisclosed income to the tune of Rs. 41,22,415 and paid tax of Rs. 12,36,726. Senior counsel submits that this itself is sufficient to prove the genuineness of the allegations made by the petitioner in his complaint. Senior counsel referred to me to the provisions of Section 132 as also Sections 269A, 269B, 269C and 269F, etc., contained in Chapter XXA of the Income Tax Act and submitted that the second respondent and his subordinates have not taken any action to find out the real undisclosed wealth of the petitioner. Senior counsel took me to an article Zero Tolerance to Corruption-1 by N. Vittal published in Hindu daily dated November 22, 1999, as also certain passages from the book Pathology of Corruption by S.S. Gill all to substantiate that corruption is rampant in all the departments of the Government.

Sri M. N. Sukumaran Nair, learned senior counsel appearing for the fifth respondent, submitted that the petitioner had been making representations before various authorities of the Income Tax Department only out of jealousy of the fifth respondent, who is none other than his first cousin. He also submits that the fifth respondent and his children have acquired business and other assets wholly out of their sheer hard work and that the fifth respondent and his children are regular assessees to Income Tax. He further submits that the Income Tax Officer has been periodically verifying the books of account and other records in connection with the Income Tax assessments of the fifth respondent and his children, that the Department did not find any illegality as alleged by the petitioner and that the original petition has been fifed by the petitioner to wreak vengeance on the fifth respondent and his family.

Sri P. K. R. Menon, learned senior Central Government standing counsel for the Income Tax Department appearing for respondents Nos. 1 to 4, submitted that the representation submitted by the petitioner was enquired into and it was found to be without any basis. He also submitted that the fifth respondent and his children are assessees to Income Tax and they are being assessed regularly. Senior counsel further submitted that the fifth respondent and his family had availed of the VDIS, 1997, and declared a total sum of Rs. 41,22,415 and paid tax of Rs. 12,36,726. Senior counsel further relied on a decision of the Andhra Pradesh High Court in Vithaldas Vs. Union of India, , where it is held that public interest litigation can be resorted to only by a bona fide public character motivated by public interest and nothing else. Senior counsel submits that the petitioner has filed this original petition without any bona fides and to wreak private vengeance only.

As already noted the case of the petitioner is that his first cousin--the fifth respondent who was only a goldsmith by profession had amassed assets worth crores in the form of jewellery, textiles and immovable properties without any proper source and by converting black money into white money and that in spite of the said fact being brought to the notice of the Income Tax Department they have not conducted any proper enquiry against the fifth respondent to get at the undisclosed/concealed income brought to book. Admittedly, the petitioner had made representations pointing out the said facts to the second respondent and other officers of the Income Tax Department. According to them, they conducted enquiries based on the said complaints and it was found that there was no substance in the said allegations. The Income Tax Department had also found that the fifth respondent and other members of his family are having different businesses and that they are regularly filing Income Tax returns, which were being assessed also. It was also disclosed that the fifth respondent and his family members had availed of the VDIS Scheme by declaring a sum of Rs. 41,22,415 and paid tax Rs. 12,36,726. In view of these circumstances, there was absolutely no justification on the part of the petitioner to pursue the original petition. The petitioner still wanted to see that the Income Tax Department still takes proceedings against the fifth respondent and his children. The petitioner, it must be noted, has not alleged any mala fides or corrupt practice on the part of the Income Tax Department. In the said circumstances, I am not inclined to refer to the various reports and the books on corruption in these proceedings. The petitioner had also not furnished any concrete materials in support of his allegations, In the above circumstances, the decision of the Division Bench of the Andhra Pradesh High Court (see Vithaldas Vs. Union of India, , mentioned above squarely applies. In that decision it was observed that public interest litigation is a legal technique, a responsible technique which could be resorted to only by a bona fide public character surcharged only by public interest and nothing else. It was also stated that under the garb of public interest litigation no person can be permitted to abuse the process of law and waste judicial time. In the above circumstances, there is no merit in this original petition. It is accordingly dismissed. But in the circumstances of the case there will be no order as to costs.