M/s. Chanda Anjaiah Parameshwar V. The Deputy Commissioner of Income Tax

WP/34193/2022

AI Insights

The case involves M/s. Chanda Anjaiah Parameshwar, HUF, the petitioner, who challenged the notices and orders issued by the Income Tax Department under Sections 148A(b) and 148A(d) of the Income Tax Act, 1961, for the assessment year 2014-15. The petitioner, engaged in bullion trading, was accused of not disclosing substantial cash credits in his bank account, which were considered as income that escaped assessment. The High Court, after considering the submissions and the detailed reply provided by the petitioner, upheld the reassessment proceedings, stating that the petitioner had failed to substantiate the source and purpose of the cash deposits.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 753212 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 01-09-2022
• Assessment Year: misc
• Other Referred Cases: India v. Ashish Agarwal
• Laws Referred To: Income-tax Act, 1961, Constitution of India
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: J V PRASAD; B KAVITHA YADAV
• Assessee Lawyers: VIJAY PUNNA
• Keywords: Assessment Year 2014-15; Jurisdiction; Mandamus; Natural Justice; Reassessment; Unexplained credit; Writ of Certiorari
• Section: 147; 148; 143(3); 148A(b); 148A(d); 226

Judgement Text

"i [ 32e5 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE FIRST DAY OF SEPTEMBER TWO THOUSAND AND TWENry TWO PRESENT THE HON'BLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HON'BLE SRI JUSTICE C.V. BHASKAR REDDY WRIT PETITION NO: 34193 OF 2022 Between: M/s. Chanda Anjaiah Parameshwar, HUF 3-4-461, General Bazar, Secunderabad- 500 003, Telangana ...PETITIONER AND 1 2 3 The Deputy Commissioner of lncome Tax, Circle 6(1), Aayakar Bhavan, Hyderabad-500004 The Principal Commissioner of lncome Tax-1, 3rd Floor, Aayakar Bhavan, Basheerbagh, Hyderabao-500004 The Union of lndia, Represented by its Secretary to the Government, Department of Revenue, Ministry of Finance, New Delhi - 110 001 ...RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an order or direction more particularly in the nature of writ of certiorari and mandamus declaring the notice dated 23.05.2022 issued under section 148A(b) of the lncome-tax Act, 1961 as well as the Order dated 30.07.2022 passed by the Assessing Officer under section '148A(d) purported to have been passed u/s 148A(b) and the consequential impugned notice dated 30.07.2022 issued under sectron '148 of the Act proposing to reopen the assessment of the Petitioner, for the Assessment Year 2014-15, as arbitrary, illegal, bad in law, barred by limitaticn, violative of principles of natural justice, and without jurisdiction, being contrary to the provisions of the lncome Tax Act, 1961 and consequently quash and annul the same in the interest of justice. Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the pelrtion, the High Court may be pleased to grant stay of further proceedings, including any recovery, pursuant to the notice dated 30.07.2022, in DIN and Notice No. ITBA/AST/S/91/2022- 2311044350188( 1), issued by Respondent No.1 u/s.148 for the Assessment Year 2014-15 pending disposal of the marn writ petition. Counsel for the Petiticner: SRI VIJAY KUMAR PUNNA Counsel for the Respondent Nos.'l & 2: SRI J. V. PRASAD, SC FOR INCOME TAX Counsel for the Respondent No.3: Ms. B. KAVITHA YADAV The Court made the following: ORDER lA NO: 1 OF 2022 THE HON'BLE THE CHIEF JUSTICE UJJAL BIII'YAN AND THE HON'BLE SRI JUSTICE C.V.BHASKAR REDDY WRIT PETITION No.34193 of 2022 ORDER: eet ttlc Hon'bte the chi{ Justicz Ujjat Btuyanl Heard Mr. Vijay Kumar Punna, learned counsel for the petitioner; Mr. J.V.Prasad, learned Standing Counsel for Income Tax Department appearing for respondents No. 1 ard 2; ald Ms. Sreemai, learned counsel appearing on behaif of learned counsel Ms. B.Kavitha Yadav, learned counsel for respondent No.3. 2. By filing this writ petition under Article 226 of t}re Constitution of India, petitioner seeks quashing of notice dated 23.05.2022 issued by respondent No.l under Section 148A(b) of the Income Tax Act, 196f priefly, 'the Act' hereinafter), for the assessment year 2014-15 as well as the order dated 30.07.2022 passed by respondent No. 1 under Section 148A(d) of the Act for the said assessment year 2014-15 3. It may be mentioned that petitioner is an assessee under the Act having the status of Hindu Undivided Family 2 (HUF) carrl.ing on the business of trading in bullion and silver. For the assessment year 2Ol4-15, petitioner was assessed under Section 1a3(3) of the Act by respondent No. 1 vide order dated 09.12.2016. It may be mentioned that in the aforesaid assessment proceeding, petitioner had filed return of income at Rs.2,30,07,57O.OO, which was assessed as the income of the petitioner by respondent No. 1 vide the aforesaid order of assessment. 4. On 7O .06.2021 , notice was issued by respondent Following the decision of India v. Ashish No. 1 undt:r Section 148 of the Act. of the Supreme Colrrt in Union Agarwall, the aforesaid notice was construed to be a notice under Section 148A(b) of the Act which was reiterated by the notice dated 23.O5.2022. As per the aforesaid notice, it was alleged that as per information received, petitioner had received credit of Rs.305.72 crores in his current account during the period from 06.02.2013 to 04.12.2O14 out of which petitioner had received Rs.304.O5 crores in cash. The aforesaid credit was not disclosed by the petitioner in its income tax return. The same was also not disclosed | 2022 SCC Ontine SC 543 -1 during the assessment proceeding. Therefore, the entire credit in the said current account has been treated as income which had escaped assessment. Thus, there was failure on the part of the petitioner to disclose fully and truly all material facts necessarlr for assessment for the assessment year 2Ol4-15. Accordingly, it was held that al amount of Rs.3O4.O5 crores chargeable to tax had escaped assessment in the assessment year 2Ol4-15. Petitioner was required to show cause as to why an order under Section 148A(d) of the Act should not be passed as a precursor for issuance of notice under Section 148 of the Act. 5. It is submitted that the petitioner had submitted a detailed reply explaining the above transaction and contending that there was no suppression. Nonetheless, respondent No.1 passed the order dated 30.07.2O22 under Section 148A(d) of the Act holding that the cash deposit of Rs.304.O5 crores appears to be unexplained credit; there is reason to believe that an amount of Rs.304.05 crores escaped assessment within the meaning of Section 147 of the Act. After obtaining prior approval of the higher 4 authority, respondent No.l held that it is a fit case for issuance of notice under Section 148 of the Act. Consequently, notice under Section 148 of the Act was issued on 30.07.2022. 6. Learned counsel for the petitioner submits that reply of the petitioner dated 02.06.2022 was not considered by respondent No. 1; additionally, as per the documents of the respondents themselves, the above transaction is under investigation. Investigation is not yet complete. Therefore, without conclusion of investigation, respondents ought not to have initiated reassessment proceedings. 7. We are unable to accept the above contentions of the petitioner. On going through the order dated 3O.O7.2O22, we find that reply of the petitioner dated 02.06.2022 was considered by respondent No. l, whereafter the same was not accepted holding the present case to be a fit one for issuance of notice under Section 148 of the Act. It was held as follows: \"The submissions of the assessee have been considered. In the instant case, the assessee has received the credits of Rs.305.72 crores in his current account No.0O4805000611 between the period from 5 ( I I 06.02.2013 to O4.L2.2O14. Out of which he received Rs.304.05 crores in cash. The assessee has not disclosed this bank account in his ITR hled for the year under consideration i.e., 2013-14. The assessee has asked at several instances in his reply to this office for materials on which this ofiice has come to conclusion that the amount o[ Rs.304.05 crores has escaped assessment. This information has already been provided to the assessee. Further, in this connection, it is pertinent to mention here the onus of providing and proving transactions are genuine, lies with ttre assessee itsetf. The assessee has not submitted any details regarding from whom he has received the amount and for what purpose, The assessee merely submitted he is a bullion trader, but he has not provided necessary documents to substantiate sale of bullion via cash. In this connection the cash deposits of Rs.3O4.05 crores appears to be unexplained credits, hence tl:ere is reason to believe that an amount of Rs.304.O5 crores has escaped assessment within the meaning of section 147 of the I.T.Act. Hence, in light of the above facts, it is apparent that the income of Rs.304.05 crores received has escaped assessment within the meaning of Section 147 of the I.T.Act. Therefore, it is a fit case for issue of notice u/s.148 ofthe I.T.Act, 1961.\" 8. We are at a stage of issuance of notice under Section 148 of the Act. As a matter of fact, an order under Section 148A(d) is on the point as to whether notice under Section 148 of the Act is to be issued or not. At this stage I t 6 interference is to be avoided, unless there is a gross or manifest error. That apart, petitioner would have the remedy of filing reply to the above show cause notice and thereafter contest the reassessment proceeding. If for arly reason the reassessment proceeding results in an adverse order, petitioner would have the remedy of ftling appeal and thereafter further appeal, which is provided under the Act. 9. Therefore, in the f;rcts and circumstances, we are not at all inclined to interdict the proceedings initiated by the respondents for reassessment at the threshold. 10. Writ petition is accordingly dismissed. Miscellaneous applications pending, if any, shal1 stand closec1. However, there shall be no order as to costs. I I I so/- N. CHANDRA SEKHAR RAO ASSISTANT BEqISTRAR //TRUE COPY// L'{h.- SECTION OFFICER One CC to Sri Viiav Kumar Punna, Advocate [OPUC] one CC to Sri J.'V Prasad, SC for Income Tax [OPUC] One CC to Ms. B. Kavitha Yadav Advocate [OPUC] Two CD Copies To, 1 2 'l 4 GJ GJP , -- HIGH COURT DATED:01 10912022 ORDER WP.No.34193 of 2022 DISMISSING THE WRIT PETITION WITHOUT COSTS , l iiE .r r-:q i^ ,c 2 (-) J 3 lun lr l * r, (P ,R, t'N @ 1O pr I t ? o A 1!' -.'i../ "