KOVI GURAVAIAH NAIDU V. THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX

WP/20147/2023

AI Insights

The case involves a writ petition filed by a petitioner engaged in the lemon trade, challenging an assessment order issued by the 1st respondent under the Income Tax Act for the Assessment Year 2017-18. The petitioner contended that the notices issued under Sections 142(1) and 148 of the Act were not properly acknowledged due to his lack of computer literacy and subsequent illness, leading to an inability to respond. The petitioner argued that the assessment was based on incorrect facts, specifically erroneous cash deposit amounts attributed to his account. The court found merit in the petitioner's arguments, particularly regarding the incorrect attribution of the cash deposit amount and the lack of opportunity given to the petitioner to explain the legitimate deposits.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 769391 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 27-09-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M KIRANMAYEE
• Assessee Lawyers: N VIJAY
• Keywords: Arbitrary; Assessment Order; Cash deposits; E-filing; Illegal; Mandamus; Notice; Opportunity to explain; Set aside; Sickness
• Section: 148; 142(1)

Judgement Text

"HON’BLE SRI JUSTICE U.DURGA PRASAD RAO AND HON’BLE SRI JUSTICE A.V.RAVINDRA BABU WRIT PETITION No.20147 of 2023 ORDER: (per UDPR, J) This writ petition is filed seeking mandamus declaring the impugned order passed by the 1st respondent in respect of PAN No.AHIPK5818R in DIN No: ITBA/AST/S/147/2021-22/10410 92618(1), dated 20.03.2022, for the Assessment Year 2017-18 as illegal, arbitrary and to set aside the same. 2. Heard learned counsel for petitioner, Sri N.Vijay and Smt.M.Kiranmayee, learned standing counsel for the respondents. 3. (a) Petitioner’s case is that the petitioner has engaged in Lemon Trade by collecting the lemons from the farmers and selling the same in North India and Kerala markets. The petitioner gets commission a sum of ₹1/- to ₹5/- per bag of lemon sold. While so, the 2nd respondent issued notice under Section 148 of the Income Tax Act (herein after, ‘the Act’) in DIN No.ITBA/AST/S/148/ 2020-21/1031887126(1) for the assessment year 2017-18. Since the said notice was served online in the e-filing portal and as the 2 petitioner was not a computer savvy, he was not aware of the said notice. Thereafter, the 2nd respondent has issued notice under Section 142(1) of the Act, dated 29.06.2021. For the same reason, the petitioner could not reply to the said notice. The said notice contains the details of cash deposits of ₹2,47,57,120/- in the current account and ₹32,94,000/- in savings account and also the cash withdrawals of ₹3,30,52,749/- and details of TDS paid and explanations were sought. (b) The further case of the petitioner is that while the matter stood thus, the 1st respondent issued notice dated 15.12.2021 under Section 142(1) of the Act through online and placed the same in the Income Tax E-filing portal of the petitioner. In the said notice, altogether a different amount of cash deposits ₹1,20,70,600/- has been mentioned which does not pertain to the petitioner. (c) Subsequently, the petitioner fell sick due to the Acute Inflammatory Demyelinating Polyneuropathy. During his illness, another notice dated 25.02.2022 under Section 142(1) of the Act was issued online and placed in the Income Tax E-filing portal. Petitioner could not give any reply to it. Subsequently, a show- 3 cause notice dated 03.03.2022 was issued on the wrong facts of cash deposits for an amount of ₹1,20,70,600/-. As the petitioner did not give reply for the reasons mentioned above, the impugned assessment order was passed on 20.03.2022 basing on the wrong facts. Ultimately, petitioner submits that due to his sickness, the petitioner could not give replies to the earlier notices and the petitioner may be given an opportunity of filing an explanation in respect of two cash deposits i.e., ₹2,47,57,120/- and ₹32,94,000/- for consideration of the 1st respondent and also in respect of ₹1,20,70,600/-, which does not belong to his account. The petitioner thus prays for an order. 4. Learned standing counsel representing on behalf of the respondents opposed the writ petition. 5. Considered the above submissions of learned counsel for petitioner, as per which, the amount of ₹1,20,70,600/- is concerned, it does not belong to his account at all and that so far as the deposits of ₹2,47,57,120/- and ₹32,94,000/- are concerned, he has sufficient explanation to offer. Thus, in the interest of justice, an 4 opportunity has to be given to the petitioner to submit his explanation to the notice issued by the 1st respondent. 6. Accordingly, this writ petition is allowed and the impugned assessment order dated 20.03.2022 passed by the 1st respondent is set aside and the 1st respondent is directed to permit the petitioner to submit his explanation to the notice dated 29.06.2021 within three weeks from the date of receipt of copy of this order, in which case, the 1st respondent shall receive the explanation and consider the same and after affording an opportunity of virtual hearing to the petitioner, pass an appropriate order in accordance with the governing law and rules expeditiously. No costs. As a sequel, interlocutory applications pending, if any, in this case shall stand closed. __________________________ U.DURGA PRASAD RAO, J _______________________ A.V.RAVINDRA BABU, J 27.09.2023 SS "