RAVIKUMAR V. THE COMMISSIONER AND ORS

WP/202859/2018

AI Insights

The case involves Ravikumar, a vulcanizing shop owner, who contested an income tax assessment claiming his income was significantly higher than reported due to transactions he facilitated between landowners and rig owners for borewell digging. The Income Tax Department challenged his reported income based on bank statements showing higher receipts. Ravikumar argued he was merely a collection agent and did not derive income from these transactions. The initial revision by the Commissioner of Income Tax was rejected, leading to this writ petition under Articles 226 and 227 of the Constitution of India, seeking to quash the impugned order.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 697892 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 12-03-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: TIRUMALLESH
• Assessee Lawyers: SACHIN MAHAJAN
• Keywords: Assessment Order; Certiorari; Certiorari; Income Tax; Revision petition; Writ petition
• Section: 264; 226; 227

Judgement Text

" - 1 - NC: 2024:KHC-K:2127 WP No. 202859 of 2018 IN THE HIGH COURT OF KARNATAKA KALABURAGI BENCH DATED THIS THE 12TH DAY OF MARCH, 2024 BEFORE THE HON'BLE MR JUSTICE V SRISHANANDA WRIT PETITION NO. 202859 OF 2018 (T-RES) BETWEEN: RAVIKUMAR S/O SUBHASH KALSI, AGE: 26 YEARS, OCC: PUNCTURE REPAIR SHOP R/O AMBIGARA CHOWDAIAH NAGAR AFZALPUR, DIST: KALABURAGI-585301. …PETITIONER (BY SRI. SACHIN M. MAHAJAN, ADVOCATE) AND: 1. THE COMMISSIONER INCOME TAX AAYKAR BHAVAN, SEDAM ROAD, KALABURAGI-585101. 2. THE INCOME TAX OFFICER, WARD-3 AAYKAR BHAVAN, SEDAM ROAD, KALABURAGI-585101. …RESPONDENTS (BY SRI. TIRUMALLESH M., FOR SRI. Y. V. RAVI RAJ, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO, ISSUE A WRIT OR ORDER OR DIRECTION IN THE NATURE OF CERTIORARI AND QUASH THE IMPUGNED ORDER DATED- 22.02.2018 PASSED BY THE RESPONDENT NO.1 IN F.NO.264/PR.CIT-KLB/2017-18 VIDE ANNEXURE-H. Digitally signed by SHILPA R TENIHALLI Location: High Court Of Karnataka - 2 - NC: 2024:KHC-K:2127 WP No. 202859 of 2018 THIS WRIT PETITION IS COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER Heard the learned counsel for the petitioner Sri Sachin M. Mahajan and the learned counsel for the respondents Sri Tirumallesh M. 2. The writ petition is filed with the following prayers: “i) Issue a writ or order or direction in the nature of certiorari and quash the impugned order dated-22.02.2018 passed by the respondent no.1 in F.No.264/Pr.CIT-KLB/2017-18 vide Annexure-H. ii) Issue any other writ of order or direction as this Court may deem fit to issue, in the facts and circumstances of the case, to meet the ends of justice.” 3. The facts in brief, which are utmost necessary for disposal of the writ petition are as under: The petitioner runs a vulcanizing shop in Afzalpur, Kalaburagi district. It is his case that he used to collect - 3 - NC: 2024:KHC-K:2127 WP No. 202859 of 2018 the money from the land owners, who are interested in digging a borewell and after the borewell is dug by the owners, who possessed the rigs used to pay them money as per the estimated rig charges. The income that has been shown in his return for the assessment year 2014-15 is Rs.1,99,686/-. 4. However, there was a demand that his income for the relevant year is Rs.59,04,180/- as per the details found in the savings Bank account of the petitioner in Corporation Bank, Afzalpur Branch and therefore, the demand was raised. The petitioner accepted that there was a receipt of Rs.59,04,180/-, but there was an expenditure to the tune of Rs.56,80,532/- as the amount collected from the land owners has been paid to the rig owners by RTGS. 5. The revised return was also possessed by the income tax authorities and an assessment order was passed and against which, the revision petition came to be - 4 - NC: 2024:KHC-K:2127 WP No. 202859 of 2018 filed before the Commissioner of Income Tax and an order came to be passed on 22.02.2018 under Section 264 of the Income Tax Act, 1961 (for short ‘I.T. Act’) rejecting the revision. The same is called in question by the writ petitioner in this petition. 6. Reiterating the grounds in the writ petition, the learned counsel for the petitioner vehemently contended that when the money was collected by the petitioner from farmers and repaid to the rig owners, the petitioner has acted as only a collection agent and there cannot be any income that has been derived by the petitioner and the said aspect of the matter has not property considered by the Commissioner of Income Tax and passed the order at Annexure-H, resulting in miscarriage of justice and sought for allowing the writ petition. 7. Per contra, the learned counsel for the respondents vehemently contended that the assessment order was challenged by the assessee before the Commissioner of Income Tax by filing a revision petition - 5 - NC: 2024:KHC-K:2127 WP No. 202859 of 2018 under Section 264 of the I.T. Act and the contention of the petitioner was negated by passing the order at Annexure-H in the absence of any proper material being placed on record by the petitioner to establish that there was expenditure to the tune of Rs.56,80,532/- and therefore, the impugned order is just and proper and sought for dismissal of the writ petition. 8. Having heard the parties in detail, this Court has meticulously perused the materials on record. 9. On such perusal of the materials on record, it is crystal clear that the contentions raised on behalf of the department appear to be a technical approach. In the first place, there is no material on record to show that there was income derived by the petitioner by doing business. According to the petitioner, he was only a collection agent. The previous year returns and the relevant year business would only go to show that he was running vulcanizing shop and he could not have derived so much of income from his business. - 6 - NC: 2024:KHC-K:2127 WP No. 202859 of 2018 10. Nevertheless, it was for the petitioner to place on record necessary documents before the Commissioner of Income Tax so as to consider the case of the writ petitioner in a proper manner while exercising the revisional jurisdiction under Section 264 of the I.T. Act. 11. It is settled principles of law and requires no emphasis that the power of the revisional authorities is not as vide as an appeal and therefore, in was incumbent on the part of the petitioner to place clinching material on record so as to revise the order of assessing authority by exercising the power under Section 264 of the I.T. Act. 12. The petitioner having not placed on record such clinching material to show that what is the amount of money exactly derived, who are the persons who are land owners, who said to have dug the borewell in their lands and what exactly the charges that has been paid by him to rig owners, except producing the Bank statement as is rightly contended by the learned counsel for the respondents, the impugned order was inevitable. - 7 - NC: 2024:KHC-K:2127 WP No. 202859 of 2018 13. At this stage, the learned counsel for the petitioner seeks one more opportunity for the petitioner to place on record the necessary material before the Commissioner of Income Tax and requests the Court to set aside the impugned order and provide one more opportunity for the petitioner to place necessary clinching evidence so as to show that there was no income derived by him or to explain the alleged expenses. 14. Accordingly, the following order is passed: ORDER a) The writ petition is allowed. b) The order at Annexure-H is quashed. c) The matter is remitted to respondent No.1 - the Commissioner of Income Tax in F.No.264/Pr.CIT-KLB/2017-18 for fresh disposal in accordance with law. d) The petitioner shall positively appear before the Commissioner of Income Tax without further notice on 03.04.2024. - 8 - NC: 2024:KHC-K:2127 WP No. 202859 of 2018 e) Within a week thereof, he shall produce all necessary documents and reasonable opportunities be provided by the Commissioner of Income Tax for the petitioner to produce necessary documents and revision be disposed of in accordance with law on or before 31.05.2024. Sd/- JUDGE SRT CT-SI List No.: 1 Sl No.: 61 "