Pareed Abdul Salam V. Additional / Joint / Deputy / Assistant Commissioner of Income Tax / Income-Tax Officer, National Faceless Assessment Centre, Delhi and Income Tax Officer-1, Kottayam and Indus Ind Bank Limited

WP(C)/30209/2022

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The case involves Pareed Abdul Salam, the petitioner, who challenged the Show Cause Notice and the subsequent assessment order issued by the Income Tax Department. The petitioner was found to have made substantial unexplained cash deposits in multiple bank accounts, which led to a re-opening of his tax assessment under Section 148 of the IT Act, 1961. Despite several notices, the petitioner failed to provide satisfactory explanations for these deposits, resulting in the addition of these amounts as income from other sources and the imposition of tax, interest, and penalties. The court dismissed the writ petition, allowing the petitioner to pursue appeals and directing the authorities to address the rectification application.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 805255 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 11-01-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: A KUMAR; P J KUMAR; G MINI; P S SREE PRASAD; JOB ABRAHAM
• Keywords: Assessment Order; Cash deposit; Income from other sources; Penalty proceedings; Rectification Application; Show cause notice
• Section: 148; 142(1); 69A; 115BBE; 254; 271 AAC(1)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH THURSDAY, THE 11TH DAY OF JANUARY 2024 / 21ST POUSHA, 1945 WP(C) NO. 30209 OF 2022 PETITIONER: PAREED ABDUL SALAM, CHELAPEERUPARAMBIL HOUSE, ARUVITHURA P. O., ERATTUPETTA, KOTTAYAM, PIN – 686121. BY ADVS. SRI. A. KUMAR SRI. P. J. ANIL KUMAR, SC, KPHCC SMT. G. MINI(1748) SRI. P. S. SREE PRASAD SRI. JOB ABRAHAM RESPONDENTS: 1 ADDITIONAL / JOINT / DEPUTY / ASSISTANT COMMISSIONER OF INCOME TAX / INCOME-TAX OFFICER, NATIONAL FACELESS ASSESSMENT CENTRE, DELHI, PIN – 110001. 2 THE INCOME TAX OFFICER-1, KOTTAYAM, PIN – 686001. 3 INDUS IND BANK LIMITED, FIRST FLOOR, JAIN TOWER-II, NEAR RAILWAY OVER BRIDGE, NH 17 BYPASS, EDAPPALLY, KOCHI, PIN – 680024. BY ADV. SRI. JOSE JOSEPH – SC - INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11.01.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 30209 OF 2022 2 DINESH KUMAR SINGH, J. -------------------------- W.P.(C) No.30209 of 2022 ------------------------- Dated this the 11th day of January, 2024 JUDGMENT 1. The present writ petition has been filed impugning the Show Cause Notice and assessment order in Exhibits P-1 and P-2 respectively under the provisions of the Income Tax Act, 1961 (hereinafter referred to as the IT Act,1961 for short). The petitioner’s case was selected under ‘AIMS’ (Actionable Information Management System) category of cases in ITBA (Income Tax Business Application). On verification of the data, it was noticed that the petitioner had deposited Rs. 1,27,97,300/- in cash in one account maintained in Indusind Bank Limited and in two accounts maintained in Punjab National Bank. In the return filed by the petitioner, the petitioner did not explain the cash deposit of Rs. 1,27,97,300/- and, therefore, the case was re-opened by issuing notice under Section 148 of the IT Act,1961 on 29.03.2021. The petitioner was issued several notices under Section 142 (1) of the IT Act,1961. However, the petitioner did not filed any reply to substantiate the cash deposit of the said amount of Rs. 1,27,97,300/-. The petitioner had also made payment of Rs. 22,300/- to New Delhi UP WP(C) NO. 30209 OF 2022 3 Road Carrier Private Limited. As the petitioner did not come forward in pursuance to several notices, the assessment order came to be finalised adding the said transactions as income from other sources under Section 69A read with Section 115BBE of the IT Act, 1961. The petitioner’s total assessed income was Rs. 1,28,19,600/- on which the tax, interest and penalty has been demanded. The penalty proceedings have been initiated and penalty order in Exhibit P-13 has been passed under Section 271 AAC (1) of the Act, 1961 dated 23.09.2022. 2. The petitioner has remedy of filing appeal against the assessment and penalty order under the provisions of the IT Act, 1961 and this Court, therefore finds no ground to interfere with the assessment order or penalty order. 3. At this stage, the learned Counsel for the petitioner and submitted that the petitioner has moved application under Section 254 of the IT Act, 1961 for rectification of the assessment order in Exhibit P- 6 and a direction may be issued to the assessing authority to pass appropriate order on Exhibit P-6 rectification petition/application. 4. Considering the said prayer, the writ petition so far as challenge to the assessment order and penalty order is concerned, it is dismissed with liberty to the petitioner to approach the appellate authority WP(C) NO. 30209 OF 2022 4 against the said order. However, a direction is issued to the 1st and 2nd respondents, as the case may be, to consider and pass appropriate order in Exhibit P-6 rectification petition/application filed by the petitioner under Section 254 of the IT Act, 1961 expeditiously, preferably within a period of two months. Sd/- DINESH KUMAR SINGH JUDGE Svn WP(C) NO. 30209 OF 2022 5 APPENDIX OF WP(C) 30209/2022 PETITIONER’S EXHIBITS EXHIBIT P1 TRUE COPY OF THE SHOW CAUSE NOTICE DATED 16.03.2022 FOR ASSESSMENT YEAR 2017-18 EXHIBIT P2 TRUE COPY OF THE ASSESSMENT ORDER DATED 29.03.2022 EXHIBIT P3 TRUE COPY OF THE BANK STATEMENT OF THE INDUS IND BANK FOR THE PERIOD 20/11/2014 TO 01/04/2017 EXHIBIT P4 TRUE COPY OF THE BANK STATEMENT OF THE PUNJAB NATIONAL BANK EXHIBIT P5 TRUE COPY OF THE CERTIFICATE ISSUED BY INDUS IND BANK DATED 06.09.2022 EXHIBIT P6 TRUE COPY OF THE RECTIFICATION APPLICATION DATED 12.09.2022 EXHIBIT P7 TRUE COPY OF THE RECTIFICATION APPLICATION DATED 12.09.2022 EXHIBIT P8 TRUE COPY OF THE NOTICE DATED 03.08.2022 ISSUED BY THE 2ND RESPONDENT UNDER SECTION 271AAC(1) EXHIBIT P9 TRUE COPY OF THE NOTICE DATED 03.08.2022 ISSUED BY THE 2ND RESPONDENT UNDER SECTION 270A EXHIBIT P10 TRUE COPY OF THE REPLY FILED BY THE PETITIONER DATED: NIL EXHIBIT P11 TRUE COPY OF THE ORDER DATED 20/09/2022 ISSUED BY THE 2ND RESPONDENT EXHIBIT P12 TRUE COPY OF THE INTERIM ORDER DATED 23/09/2022 OF THIS HON’BLE COURT EXHIBIT P13 TRUE COPY OF THE PENALTY ORDER DATED 23/09/2022 "