OROTH SCARIA BOBBY, V. THE UNION OF INDIA ,

WP(C)/15026/2022

AI Insights

The case revolves around a writ petition filed by Oroth Scaria Bobby, the proprietor of Asian Trading Company, challenging various notices and an assessment order issued by the Income Tax Department. The petitioner contested the inclusion of a substantial cash deposit made during the demonetization period in his income for the assessment year 2017-18, which was added to his income under Section 68 of the Income Tax Act, 1961. The petitioner argued that his responses to the notices were not adequately considered and that he was not given a personal hearing. However, the court found that the petitioner was provided a virtual hearing opportunity and that his submissions were considered, thus dismissing the writ petition.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 724708 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 08-01-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: S MANU; CHRISTOPHER ABRAHAM; JOSE JOSEPH
• Assessee Lawyers: M NAMBIAR; JOSON KURYAN THOMAS; RAJAKANNAN
• Keywords: Assessment; Cash deposit; Demand notice; Demonetisation; Income Tax; Notice; Personal hearing; Show Cause
• Section: 147; 148; 142(1); 143(2); 68; 271AAC; 156; 226

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH MONDAY, THE 8TH DAY OF JANUARY 2024 / 18TH POUSHA, 1945 WP(C) NO. 15026 OF 2022 PETITIONER/S: OROTH SCARIA BOBBY, ASIAN TRADING COMPANY, ASIAN HOUSE, P.P.ROAD, ALLAPRA P.O., PERUMABVOOR-683 543. BY ADVS. M.GOPIKRISHNAN NAMBIAR JOSON MANAVALAN KURYAN THOMAS RAJA KANNAN RESPONDENT/S: 1 THE UNION OF INDIA , REPRESENTED BY ITS REVENUE SECRETARY, MINISTRY OF FINANCE, NEW DELHI 110 004. 2 THE ADDITIONAL /JOINT /DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, NATIONAL FACELESS ASSESSMENT CENTRE, DELHI-110 003. SRI.S.MANU, DSGI; SRI.CHRISTOPHER ABRAHAM, SC FOR R2, SRI.JOSE JOSEPH, SC FOR R2 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.01.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 15026 OF 2022 2 J U D G M E N T The present writ petition under Article 226 of the Constitution of India has been filed impugning Ext.P1 notice, Ext.P8 show cause notice, Ext.P13 assessment order and Ext.P14 demand notice. 2. Petitioner is an assessee under the provisions of the Income Tax Act, 1961 ('Act', for short). He is carrying on business in cement, iron & steel, paints, chemicals etc. under the name and style M/s.Asian Trading Company. The petitioner had filed income tax return for the assessment year 2017-18 on 14.3.2018 disclosing a total income of Rs.12,97,600/- from all sources. As per the information reflected in the Insight Portal, the petitioner/assessee had made huge cash deposit in his Bank account during the demonetisation period. Considering the huge cash deposit in the the Bank account of the petitioner, proceedings under Section 147 of the Act were initiated with prior approval from the competent authority. The reasons WP(C) NO. 15026 OF 2022 3 recorded by the assessing authority that the income of the assessee had escaped assessment for the assessment year 2017-18, had been stated in the assessment order itself. 3. Thereafter, notice under Section 148 of the Act was issued on 31.3.2021 requiring the petitioner to file return of his income for the assessment year 2017-18 afresh disclosing correct income received from all sources. In response to the said notice, the petitioner had filed a revised return on 30.4.2021 disclosing income similar to that shown in the original return filed under Section 139(1) of the Act. Later on, a notice under Section 143(2) of the Act was issued on 2.9.2021, which was served on the petitioner. The petitioner was required to comply with the notice within a period of fifteen (15) days. However, the petitioner did not comply with the said notice. Further notice under Section 142(1) was issued, along with a detailed questionnaire pertaining to the financial dealings of the business concern. In WP(C) NO. 15026 OF 2022 4 response to the said notice, the petitioner filed written submission, along with copies of Bank statement maintained with the Axis Bank, details and denomination of currencies deposited in the Bank account during the demonetisation period, profit and loss account and the balance-sheet. The petitioner had submitted the Bank statement only up to the month of September, 2016 and therefore, the transactions made during the demonetisation period could not be verified from the Bank statement. The petitioner did not furnish cash book, sales register etc. as called for as per notice under Section 142(1) of the Act. 4. After examining the documents and replies submitted by the petitioner, a fresh notice under Section 142(1) dated 3.3.2022 was issued to the petitioner/assessee calling upon the information with supportive documents as under: “1. With reference to your reply, it is noted that you have not submitted cash book as called for in earlier WP(C) NO. 15026 OF 2022 5 notice dated 13.12.2022. Your argument that the file is longer than 10MB so could not be uploaded is not acceptable. Please upload the same by splitting the file in many parts. 2. You have submitted copies of Bank statement only up to the month of September only for three years. Please upload statements for the complete F.Y for all these three years. 3. You have shown only Rs.24,74,000/- in the chart in respect of cash deposit in the Bank from 10.11.2016 to 14.11.2016, while as per record available with the Department, You have made cash deposit during the demonetization period of Rs.36.17 Lakh. Please explain the reason of such difference and submit evidence. 4. Please submit cash flow statement for F.Y 2016-17 and preceding three years. Please submit Copies of sale register for the month of Nov & Dec 2014-15, 2015-16 and 2016-17.” In response to the said notice and the questionnaire, the petitioner furnished reply. WP(C) NO. 15026 OF 2022 6 5. The petitioner had deposited cash of Rs.37,17,000/-, but he could not submit source of deposit of Rs.36,17,000/- and therefore, the said deposit of Rs.36,17,000/- was added to the total returned income of Rs.12,97,600/- under Section 68 of the Act. Thus, the total income assessed under Sections 147 r/w 143(3) & 144B of the Act was determined to be Rs.49,14,600/-. It was ordered to initiate penalty proceedings under Section 271AAC and to charge interest as per the rule. 6. Learned counsel for the petitioner submits that the petitioner has filed this writ petition alleging that his reply to the notice under Section 142(1) dated 3.3.2022 was not considered. He further submitted that the petitioner was not given personal hearing. 7. Insofar as the question of personal hearing is concerned, from Ext.P10, it is evident that the petitioner was provided VC link and password and that therefore, the petitioner cannot WP(C) NO. 15026 OF 2022 7 say that no opportunity of personal hearing was given to him. 8. The assessment order would disclose that all replies given by the petitioner were considered. Even if some aspects were not considered, statutory remedy of appeal against the assessment order is available to the petitioner. 9. In view of the above, there is no ground to entertain the present writ petition and the same is hereby dismissed leaving it open to the petitioner to take recourse to any other remedy available to him under the law. Pending interlocutory application, if any, in the present writ petition stands dismissed. Sd/- DINESH KUMAR SINGH JUDGE jg WP(C) NO. 15026 OF 2022 8 APPENDIX OF WP(C) 15026/2022 PETITIONER EXHIBITS Exhibit P1 A TRUE COPY OF THE SAID NOTICE UNDER SECTION 148 DATED 31.03.2021 ISSUED TO THE PETITIONER BY THE INCOME TAX OFFICER, WAR 1 & TPS, ALUVA Exhibit P2 A TRUE COPY OF THE NOTICE DATED 13.12.2021 ISSUED BY THE 2ND RESPONDENT UNDER SECTION 142(1) OF THE ACT Exhibit P3 A TRUE COPY OF THE REPLY (WITHOUT ANNEXURES) DATED 28.02.2022 SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT Exhibit P4 A TRUE COPY OF THE E-PROCEEDINGS RESPONSE ACKNOWLEDGMENT NO. 266304281280222 DATED NIL (SYSTEM GENERATED) RECEIVED ON THE SUBMISSION OF EXT. P3. Exhibit P5 A TRUE COPY OF THE NOTICE DATED 03.03.2022 ISSUED BY THE 2ND RESPONDENT UNDER SECTION 142(1) Exhibit P6 A TRUE COPY OF THE REPLY (WITHOUT ANNEXURES) DATED 08.03.2022 SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. Exhibit P7 A TRUE THE COPY OF E-PROCEEDINGS RESPONSE ACKNOWLEDGMENT NO. 308009481080322 DATED NIL (SYSTEM GENERATED) RECEIVED ON SUBMISSION OF EXT. P6 Exhibit P8 A TRUE COPY OF THE SHOW CAUSE NOTICE NO. WP(C) NO. 15026 OF 2022 9 ITBA/ AST/F/147 (SCN)/2021-22/1041157746 (1) DATED 21.03.2022 ISSUED BY THE 2ND RESPONDENT Exhibit P9 A TRUE COPY OF THE ACKNOWLEDGMENT NO. 412574651240322 DATED NIL (SYSTEM GENERATED) EVIDENCING REQUEST FOR ENLARGEMENT OF TIME FOR SUBMISSION OF REPLY TO EXT. P8 SHOW CAUSE NOTICE Exhibit P10 A TRUE COPY OF THE SCREEN SHOT EVIDENCING REQUEST MADE BY PETITIONER ON 23.03.2022 FOR PERSONAL HEARING Exhibit P11 A TRUE COPY OF THE REPLY (WITHOUT ANNEXURE) DATED 28.03.2022 SUBMITTED BY THE PETITIONER BEFORE THE THE 2ND RESPONDENT. Exhibit P12 TRUE COPY OF THE STATUS REPORT OF THE RE-ASSESSMENT PROCEEDINGS, AS APPEARING IN THE E-FILING PORTAL AFTER EXHIBIT P11 Exhibit P13 THE TRUE COPY OF THE ORDER OF ASSESSMENT DATED 30.03.2022 PASSED BY THE 2ND RESPONDENT Exhibit P14 HE TRUE COPY OF THE DEMAND NOTICE DATED 30.03.2022 ISSUED BY THE 2ND RESPONDENT, ISSUED UNDER SECTION 156 OF THE ACT Exhibit P15 A TRUE COPY OF THE SCREENSHOTS SHOWING THE STATUS OF THE DIGITAL SIGNATURE OF THE 2ND RESPONDENT "