Mr. Pramod Kumar V. The Assistant Commissioner of Income Tax and 3 others

WP/36986/2022

AI Insights

The case involves Mr. Pramod Kumar, the petitioner, who challenged the legality of a notice issued by the Assistant Commissioner of Income Tax under Section 148 of the Income Tax Act, 1961. The notice was issued following the discovery of unreported income from trading in equity derivatives, which the petitioner had not disclosed in his tax returns for the assessment year 2015-16. The petitioner argued that the notice was arbitrary and violated principles of natural justice, among other legal provisions. However, the court found that there was a reasonable belief that income had escaped assessment, justifying the issuance of the notice.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 760787 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 26-09-2022
• Assessment Year: misc
• Other Referred Cases: Union of India v. Ashish Agarwal, Anshul Jain Vs. Principal Commissioner of Income Tax
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: J V PRASAD
• Assessee Lawyers: KARTIKEYA KOUNDINYA
• Keywords: Arbitrary; Assessment Year 2015-16; Equity derivatives; Illegal; Income Tax; Natural Justice; Scrutiny assessment; Tax Evasion; Void ab initio; Writ of Mandamus
• Section: 147; 148; 143(3); 142(1); 226; 14BA(d)

Judgement Text

"[ 32es ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE TWENTY SIXTH DAY OF SEPTEMBER TWO THOUSAND AND TWENry TWO PRESENT THE HONOURABLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HONOURABLE SRI JUSTICE C.V. BHASKAR REDDY Between: Mr. Pramod Kumar, S/o Mr. Maniklal Agarwal, agea SZ years, Occ, Business, H.No.2-1-1 13, Tobacco Bazar, Secunderabad - 500 003, Telangana. ...PETITIONER AND 1 The Assis t Commissioner of lncome Tax, Circle 6(1), Hyderabad, l.T asab Tank, Hyderabad - 500 004, Telangana oner of lncome Tax - 1 , Hyderabad, 7 11 , 7th Floor, 'A' uards, Masab Tank, Hyderabad - 500 028, Telangana joner of lncome Tax, Ward '16(4), Hyderabad, l.T Towers, A C Guards Masab Tank, Hyderabad - 500 004, Telangana Additional /Joint/ De ty / Assistant Commissioner of lncome Tax / lncome Tax Officer, National F Iess Assessment Center, New Delhi, Room No 401 ,2nd Floor, E-Ramp, awaharlal Nehru Stadium, New Delhi - 110 003. ...RESPONDENTS Petition Under Article 2 of the Constitution of lndia praying that in the circumstances stated in the ffidavit filed therewith, the High Court may be pleased to issue a Writ o andamus or any other appropriate Writ, Order or Direction, declaring the er dated 2910712022, passed by the '1st Respondent, under Sec. 14BA(d) o the lncome Tax Act, 1961, vide DIN and Notice No tTBA/COMi F/17 t2022. 311044264255(1), for the Assessment Year 2015 - 16 and the consequential riotice under Sec, 148 of the lncome Tax Act, 1961, dated 2910712022, issued by the 1st Respondent, for the Assessment Year 2015 - 16, as arbitrary, illegal, bad in law, without jurisdiction, void-ab-initio, violative of the principles of natural justice apart from being violative of Articles 14, 19(1)(g) and 265 of the Constitution of lndia and Sec. 14BA of the lncome Tax Act, 1961, and consequently set aside the same in the interests of justice. 2 3 4 WRIT PETITION NO: 36986 OF 2022 Petition Under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay all further proceedings, including any recovery, pursuant to the notice under Sec. 148 of the lncome Tax Act, 1961, dated 29.07.2022, issued by the 1st Respondent, for the Assessment Year 2015 - 16, pending disposal of the above writ petition. Counsel for the Petitioner KARTIKEYA SRI.KRISHNA KOUNDINYA, Sr. Counsel FOR SRI.A.V.A.SlVA Counsel for the Respondents : SRI.J.V.PRASAD (Sr. SC FOR INCOME TAX) The Court made the following ORDER I.A.NO:1 OF 2022 7 H o CH B AND THE HON'BLE SRI JUS'I'ICE C.V.BHASKAR REDDY W.P.No.36986 of 2022 ORDER: ['ar r.4r Hat'bh lbe Chi4'lrni\" tljla/ Bhtjan) I Ieard N{r. I(rishna Kour.rdinva, ]carned Senior Counscl rcpresenting Mr. A. 2.A. Siva Karr.il Rs.3,96 ,51 ,630 / - rvas shown under Sale of serviccs in drc P&L account. However, in thc P&L account, thc assesscc has shown an amouflt of Rs.73,58.33,802/ undcr Salcs r ccount. 'l'hus, the brcakup oI the sales rccount has not becn providcd by the asscsscc. Withour prejudice to the above, even i[ it is considercd that assessee has offered thc samc amount in the sale of sen'ices, given the background of i l/s l(a1'an Sccuritics, thc entire ptofit tcccir.ed from it should be treated as income and not as gross rcceipts, as claimed b,v the assessee. Hence, in the light of the above facts, it is apparent that thc income of Rs.3,73,26,9 23 /-, rcceived as profit on ttrading of ec1ui6./clerivatives through I(ayan Securities Pvt. I-td. has cscaped assessment within the meaning of scction 147 of the I.'l-. Act. 'I here [ote, it is a fit case for issue of notice u/s. 148 of thc [. ]'. cr., 196 1. ! 7 'l'his or:det is passed with tlrc prior approval of the PT.CCI-I , ,- P & 'l clangana. [ [ydcrabad vide letter in F.No. PT.CCIT /' l' ech / 53 / Approval u/s 1 48 A / 2022-23 dated 27.07,2022. fl. 'I'his rvas follrxvcd tl thc irnpugncd noticc datcd 29.07.2022 issued by respondent No.1 under Section 148 o[ the Act. (). Lcarncd Scnior Counscl lrrr thc pctittoner submits that thc lrrofits rcceivcd from NI/s. lialar-r Sccuriucs l)rivatc Limited rverc sh whcther issuance of notice under Scction 148 ol drc Act is called for or not. At this ) stxgc r)() dctailcd orclcr or tlcttilcd procccdings erc reguircd. I 6 . ccordinq to lirn'r. irr tht'rcrrsscssnrcnt pr()cccclirrqs. pctitioncr rvill har.c all thc opportunitics to -strbstanriatc his clain'r. H e has placcd reliance on a rcccnt dccision of thc Suprerne (-ourt dated t)2.09.2022 Sll'](c) No l.l82.l of 2022 (Anshul Jain Vs. 111 Principal Cor.r-rmissioner o[ Income Tax) and submits that Suprernc (-oLrrt .iid rrot tntcricrc with the ordcr ol thc Pur-rjab and l lan'ana I liulr (.ourt rcjccting ch:rllcr-rgc t<> thc orclcr passcd unclcr Secuon 1+8r (l) ol the . ct. i 1. Subrnissions rnadc bl lcarncd counscl tor thc pardcs havc rcccir,cd thc clrrc consiclcration oi thc Court. 12 Afrer licenng lcarnecl counscl lor the parrics arrd considering thc rnatcrials (,n lcc()r(1. wc rtrc of tlrc vicrv that prcscrtt is not a fit to intcrdict thc procecdings at the very thrcshold. Reasons t CASC have been assigned bv the assessing officer as to why the cxplanatior-r gn r:n bl thc pctitioner coulcl not bc acceptcd. Ccrtainly, such rcasons givcn havc a flexus with thc flormadon o[ the bctieI that income chargeablc to tax has cscaped assessmcnt. It IS eclu;rllv rritc tlt,it sirficicncr ol ar-lcquar:r' of rcasr )lts cannot [)c 7 g()r1c into in a procccdin.q undcr , rticlc 22(r oI the Constitution o[ India. 'I'hat apart, wc are at a stage prior to issuance o[ notice undcr Sccrion 1.18 ol the r ct. 13. At this stage, a dctailed analvsis is neither warranted nor Jain Vs. Principal Commissioner of Incomc Tax (supra), pcritioner rvould have amplc opportunities to agitate his c( )n[cnUOns during the rcasscssment procccdings. 'c scc no qround tr> cntertain rhc rvrit pctition. 1.+. ,'rit Pctition is accordinglv dismisscd. No costs. . s a scrlucl, miscellancous pcriti()ns, pcnding if any, stand dismisscd. //TRUE COPYII sp1-T.KRtSHNA KUMAR DEPUTY REGISTRAR / 1/ 1 2 3 4 S.A. SW SECTION OFFICER To q . One CC to SRt. . One CC to SRl. Two CD Cooies . one spare iopy I 'Y A-7 Xtffi '$= I3 Sfl,\"SS?;? t ?ffi t,, \" r 7 justified. , s nghtlv pointcd out bv thc Supreme Court in Anshul HIGH COURT DATED:2610912.022 ORDER WP.No.36986 of 2022 DISMISSING THE W.P 21 st[ ]i11 'f, -t STA J',J k * 7 4: WITHOUT COSTS. @rqtg -z C ,l %q--- ---.------ra ' \"- "