P. Ramar V. The Commissioner of Income Tax, No.2, V.P.Rathinasamy Nadar Road, Bibikulam, Madurai-625 002 and The Income Tax Officer, Ward I, No.4, North Cotton Road, Thoothukudi-628 001

WP(MD)/1166/2013

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The case involves P. Ramar, the petitioner, who is an assessee under the Income Tax Act, challenging an order passed by the Commissioner of Income Tax, which dismissed his revision petition under Section 264 of the Income Tax Act. The petitioner had initially filed a return of income for the assessment year 2009-2010, admitting a taxable income significantly lower than what was later assessed after scrutiny. The petitioner contended that due to an accident, he erroneously admitted a higher gross profit ratio in his return, which was not supported by authenticated documents. The court, after considering the submissions and the circumstances, granted the petitioner an opportunity to substantiate his claims with authenticated documents, subject to the condition of making a specified payment.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 683205 (HC-MADURAI)
• Appeal Type: Others
• Pronouncement Date: 07-08-2014
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: R KRISHNAMURTHI
• Assessee Lawyers: G RAJADURAI
• Keywords: Assessment Year 2009-2010; Gross profit ratio; Income Tax; Revision petition; Writ of Certiorari
• Section: 143(3); 264; 143(1)(a); 226

Judgement Text

"1 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 07.08.2014 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM W.P(MD)No.1166 of 2013 and M.P.(MD).Nos.1 and 2 of 2013 P.Ramar ... Petitioner Vs. 1.The Commissioner of Income Tax, No.2, V.P.Rathinasamy Nadar Road, Bibikulam, Madurai-625 002. 2.The Income Tax Officer, Ward I, No.4, North Cotton Road, Thoothukudi-628 001. ... Respondents Prayer:- Writ Petition filed under Article 226 of the Constitution of India praying for the issuance of a Writ of Certiorari, calling for the records relating to the proceedings of the impugned order dated 09.07.2012 in C.No.407/15/CIT-I/2011-12 dated 09.07.2012 on the file of the 1st respondent and quash the same. For Petitioner : Mr.G.Prabhu Rajadurai For Respondents : Mr.R.Krishnamurthi ORDER The petitioner is an assessee under the Income tax Act and the challenge in this writ petition is to an order passed by the respondent dated 09.07.2012. By the impugned proceedings, the revision petition filed by the petitioner under Section 264 of the Income Tax Act before the first respondent was dismissed. 2.The petitioner is carrying on the business of purchase and sale of salt and he had filed a return of income for the assessment year 2009- 2010 admitting a taxable income of Rs.1,61,590/-. The return was processed under Section 143(1)(a) of the Income Tax Act and subsequently, the case was selected for scrutiny and notice under Section 143(3) of the Income Tax Act, was issued to determine the total income of the petitioner as to Rs.23,07,820/- after making some additions and disallowances and raising a demand of Rs.9,19,151/-. 3.The petitioner did not file an appeal as against the order but chose to file a petition under Section 264 of the Income Tax Act before the first respondent on 09.02.2012 raising various contentions. The first respondent called for a report from the Assessing Officer which was furnished along with details. The Assessing Officer stated that the assessee has no material evidence to prove that the Gross Profit ratio is https://hcservices.ecourts.gov.in/hcservices/ 2 only 4% in the same industry as against 14.9% which was admitted by the assessee himself earlier at the time of filing of the returns. After, affording an opportunity of hearing to the petitioner and considering the representations, the first respondent considered the petitioner's contentions and rejected the same stating that but for the detection of suppression in sales by the Assessing Officer the assessee would not have admitted the same for taxation. Regarding addition of Gross Profit at 4% the first respondent held that the assessee has not produced any material evidence for adopting Gross Profit ratio at 4%. The trading accounts of two concerns produced before the first respondent, were rejected as they were not authenticated documents and therefore, cannot be relied. Aggrieved by the said order, the petitioner has approached this Court. 4.Heard the learned counsel for the parties and perused the materials placed on record and the counter affidavit filed by the first respondent. 5.From the averments made in the counter affidavit, it is seen that the Assessing Officer adopted Gross Profit ratio of 14.9% as it is admitted by the assessee in the return of income. 6.The learned counsel for the petitioner submitted that the petitioner met with an accident and at the time of filing of returns, he had erroneously admitted the Gross profit ratio at 14.9%. The Gross profit is not more than 6% in the trade and for which purpose though the petitioner produced records, the same were rejected by the first respondent as they were not authenticated. Therefore, the petitioner would plead that he may be afforded an opportunity to produce authenticated copies of the records which are relevant in respect of the other assessee carrying on similar trade. Therefore, the petitioner would state that he has suffered mentally, physically and financially and if relief is granted to the petitioner, he would be greatly benefited and relieved from financial hardship. 7.From a perusal of the impugned order, it is seen that the petitioner's case was not accepted on the ground that the records produced by him were not authenticated and if the records were unauthenticated, returns of submitted by other persons carrying on the similar business within the jurisdiction of the second respondent Assessing Officer, those records could have been called for from the concerned department or the officers. However, such procedure was not resorted to. Be that as it may, the petitioner now seeks for one more opportunity stating that he has got authenticated copies of those documents and if opportunity is granted to the petitioner to approach the commissioner, the petitioner will be able to place all the materials. 8.Considering these facts, this Court is of the view that the petitioner may be afforded an opportunity subject to certain conditions. From the perusal of the assessment, it is seen that the assessee have been assessed to at Rs.5,97,346/- including tax surcharge, Education Cess, interest under Section 243-A and B of the Income Tax Act. The balance tax payable has been arrived at Rs.9,19,151/-. In the revision petition filed by the assessee on 09.07.2012, the assessee has stated that he has already paid Rs.25,000/-. Hence, there will be a direction to the assessee to pay a sum of Rs.2,00,000/- before the second respondent and produce proof of such payment before the first respondent and on https://hcservices.ecourts.gov.in/hcservices/ 3 production of such proof, the first respondent shall reconsider its earlier order by considering the authenticated documents filed by the petitioner in support of his claim. If such application is filed, the first respondent shall consider the same and pass fresh orders on merits in accordance with law. The payment as ordered above shall be made by the petitioner within a period of eight weeks form the date of receipt of a copy of this order. With the above direction, the writ petition is disposed of. No costs. Consequently, connected miscellaneous petitions are closed. Sd/- Assistant Registrar (Crl.side) /True copy/ Sub Assistant Registrar To 1.The Commissioner of Income Tax, No.2, V.P.Rathinasamy Nadar Road, Bibikulam, Madurai-625 002. 2.The Income Tax Officer, Ward I, No.4, North Cotton Road, Thoothukudi-628 001. +1cc to MR.G.PRABHU RAJADURAI, ADVOCATE IN SR : 44460 +1cc to MR.R.KRISHNAMOORTHY, ADVOCATE IN SR : 44336 Ns SR : 11.09.2014 : 3p/5c W.P(MD)No.1166 of 2013 07.08.2014 https://hcservices.ecourts.gov.in/hcservices/ "