Davies Manuel V. Income Tax Officer Ward-2 Palakkad

WP(C)/943/2024

AI Insights

The case involves Davies Manuel, the petitioner, who did not file a return of income for the assessment year 2016-17. The Income Tax Officer (ITO) noted substantial cash deposits exceeding Rs. 76,00,000 in the petitioner's bank accounts, leading to a re-opening of the assessment under Section 147 of the IT Act, 1961. The petitioner contested the jurisdiction of the ITO, arguing that the proceedings were initiated beyond the normal three-year limitation period for re-opening assessments. However, the court found that the income in question exceeded Rs. 50,00,000, thereby justifying the extended limitation period and dismissing the writ petition.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 796506 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 02-02-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: P G JAYASHANKAR; PGJ KEERTHIVAS GIRI
• Assessee Lawyers: HARISANKAR MENON; MEERA MENON; R SREEJITH; K MENON
• Keywords: Assessment Year 2016-17; Cash deposit; Income Tax; Limitation Period; Re-opening of assessment
• Section: 147; 148; 139; 148A(b); 148A(d); 149(1)(a)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH FRIDAY, THE 2ND DAY OF FEBRUARY 2024 / 13TH MAGHA, 1945 WP(C) NO. 943 OF 2024 PETITIONER: DAVIES MANUEL AGED 57 YEARS KOLADY HOUSE, PERUMATTY, KANNIMARI, PALAKKAD, PIN - 678534 BY ADVS. HARISANKAR V. MENON MEERA V.MENON R.SREEJITH K.KRISHNA PARVATHY MENON RESPONDENT: INCOME TAX OFFICER WARD-2 PALAKKAD, AYAKAR BHAWAN, ENGLISH CHURCH ROAD PALAKKAD, PIN - 678534 BY ADVS. ADV. P.G. JAYASHANKAR PGJ KEERTHIVAS GIRI OTHER PRESENT: P.G. JAYASHANKAR-SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 02.02.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C)No.943 of 2024 2 JUDGMENT Dated this the 2nd day of February, 2024 The petitioner is an individual assessee under the provisions of the Income Tax Act, 1961,(hereinafter referred to as ‘I.T Act of 1961’). The petitioner/assessee did not file return of his income for the assessment year 2016-17. The petitioner’s case was selected for a scrutiny inasmuch as according to the assessment officer, the petitioner had deposited more than Rs.50,00,000/- cash in his two bank accounts and in the estimation of the assessing officer the said income of the petitioner had escaped assessment under the provisions of the I.T Act, 1961. Therefore, the petitioner’s case was re-opened under Section 147 of the I.T Act, 1961. The petitioner was issued a notice under Section148A(b) on 17.03.2023, to which the petitioner had submitted reply on 23.03.2023, and after affording an opportunity of hearing, an order under Section 148A(d) came to be passed on 28.03.2023. Thereafter, notice under Section 148 has been issued asking the petitioner to file his returns. WP(C)No.943 of 2024 3 2. Learned counsel for the petitioner submits that normal limitation period for re-opening the assessment under Section 149(1)(a) of the IT Act, is three years. However, it may extend to ten years if the escaped income is more than Rs.50,00,000/-. He submits that the petitioner’s income is not more than Rs.50,00,000/- which has escaped asssessment. Therefore, the proceedings initiated under Section 148A of the IT Act are barred by limitation, and therefore, without jurisdiction. 3. Sri.P .G Jayashankar, learned Senior Standing Counsel for the Income Tax Department submits that in the two bank accounts of the petitioner, there has been a cash deposit of around Rs.76,00,000/-. The petitioner did not file return of his income under Section 139 of the IT Act, and therefore, the assessing authority rightly considered that this income to have escaped assessment under the provisions of the IT Act, 1961. The case has been re-opened after 3 years which is as per the statute. 4. The question whether the petitioner’s explanation for the cash amount deposited in two bank WP(C)No.943 of 2024 4 accounts is correct or otherwise a question which can be considered only when the petitioner files the return in pursuance to the notice issued under Section 148 of the IT Act, 1961. At the initial stage of enquiry of re-opening the assessment under Section 148A, the assessing authority has to satisfy itself that whether the income of the petitioner has escaped assessment and if the 3 years period has elapsed from the last date of relevant assessment year, whether the income which has escaped assessment is more than Rs.50,00,000/-. In the present case, income escaped assessment is allegedly more than Rs.50,00,000/- and therefore, the limitation period of 3 years provided under Section 149 (1)(a) has no applicability in the facts of the present case. In view thereof, I find no substance in this writ petition. Therefore, the present writ petition is hereby dismissed. Sd/- DINESH KUMAR SINGH AP JUDGE WP(C)No.943 of 2024 5 APPENDIX OF WP(C) 943/2024 PETITIONER EXHIBITS Exhibit P1 COPY OF NOTICE ISSUED BY THE RESPONDENT DTD. 23-02-2023 Exhibit P2 COPY OF REPLY FILED BY THE PETITIONER BEFORE THE RESPODNENT DTD. 15-03-2023 Exhibit P3 COPY OF NOTICE ISSUED BY THE RESPONDENT DTD. 17-03-2023 Exhibit P4 COPY OF REPLY FILED BY THE PETITIONER BEFORE THE RESPONDENT DTD. 23-03-2023 Exhibit P5 COPY OF ORDER ISSUED BY THE RESPONDENT DTD. 28-03-2023 Exhibit P6 COPY OF NOTICE ISSUED BY THE RESPONDENT DTD. 28-03-2023 "