Sapta Panchait Kirshk Seva Swablambi Sahkari Samiti Limited V. The Union of India

CWJC/3665/2020

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The case involves Sapta Panchait Kirshk Seva Swablambi Sahkari Samiti Limited, a cooperative society, which challenged several orders and notices issued by the Income Tax Officer, Ward 3(5), Madhubani. The petitioner sought to quash an assessment order treating Rs. 95,50,000 as unexplained income, a demand order for Rs. 1,01,82,951, and a penalty notice under sections 69A and 271AAC of the Income Tax Act, 1961. The petitioner argued that the orders were cryptic and lacked reasoning, and that the deposits in question were from business activities during the demonetisation period. The court found that the material facts were recorded and considered by the officer, and suggested that the petitioner could appeal the decision.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 684892 (HC-PATNA)
• Appeal Type: Others
• Pronouncement Date: 16-10-2020
• Assessment Year: misc
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: K N SINGH; ANSHUMAN SINGH; RISHI RAJ SINHA
• Assessee Lawyers: SURAJ SAMDARSHI; AVINASH SHEKHAR
• Keywords: Coercive Action; Demonetisation; Penalty proceeding; Specified bank notes; Unexplained income
• Section: 143(3); 274; 271AAC; 69 A; 156

Judgement Text

"IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.3665 of 2020 ====================================================== Sapta Panchait Kirshk Seva Swablambi Sahkari Samiti Limited a co-operative Society, having its Office at Village Laheriyaganj PO and P.S. Madhubani, District Madhubani, through its Secretary Ranjeet Kumar, aged about 40 Years (male), Son of Late Gokul Prasad Sah, Resident of , Village Ward No.1, Laheriyaganj Po and P.S. Madhubani, District Madhubani. ... ... Petitioner/s Versus 1. The Union of India through the Secretary, Department of Revenue, Ministry of Revenue, North Block, New Delhi-110001. 2. The Commissioner, Office of the Income Tax Commissioner, Income Tax Office, Bela Kothi, Industrial Estate, Ramkrishna Ashram Road, Muzaffarpur-842005. 3. The Income Tax Oficer, Ward 3(5), Office of the Income Tax Officer, Income Tax Department, Madhubani ... ... Respondent/s ====================================================== Appearance : For the Petitioner/s : Mr.Suraj Samdarshi, Advocate Mr.Avinash Shekhar, Advocate For the Respondent/s : Mr.Dr.K.N.Singh,ASG Mr.Anshuman Singh, CGC Mr.Rishi Raj Sinha, Advocate ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE S. KUMAR ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 16-10-2020 Petitioner has prayed for the following relief(s):- “(i) To issue an appropriate writ, order or direction in the nature of certiorari for quashing assessment order no.ITBA/AST/S/143(3)/2019- 20/1023552535(1) dated 31.12.2019 passed by the Respondent Income Tax Officer, Ward 3(5) Madhubani, whereby and where under Patna High Court CWJC No.3665 of 2020 dt.16-10-2020 2/7 Rs.95,50,000/- has been treated to be unexplained income under section 69 (A) of the Income Tax Act 1961 and added back to the total income of the petitioner and a penalty proceeding under section 271AAC of the Income Tax Act 1961 has been initiated against the petitioner. (ii) To issue a further appropriate writ, order or direction in the nature of certiorari for quashing order no.ITBA/AST/S/156/2019-20/1023552571 (1) dated 31.12.2019 passed by the Respondent Income Tax Officer, Ward 3(5) Madhubani whereby and where under a demand of Rs.1,01,82,951/- has been raised against the petitioner under Section 156 of the Income Tax Act 1961. (iii) To issue a further appropriate writ, order or direction in the nature of certiorari for quashing notice no. ITBA/PNL/S/271AAC (1) 2019- 20/1023555273 (1) dated 31.12.2019 issued by the Respondent Income Tax Officer, Ward 3(5) Madhubani under section 274 read with 271 AAC (1) of the Income Tax Act 1961, where by and where under a penalty proceeding has been initiated against the petitioner for income determined to be chargeable. (iv) To issue a further appropriate writ, order or direction in the nature of mandamus commanding the Respondents to refrain from taking any coercive action against the petitioner pursuant to a) order no. ITBA/AST/S/143(3)/2019- Patna High Court CWJC No.3665 of 2020 dt.16-10-2020 3/7 20/1023552535(1) dated 31.12.2019; b) order no. ITBA/AST/S/156/2019-20/1023552571 (1) dated 31.12.2019; and c) notice no. ITBA/PNL/S/271AAC(1)2019- 20/1023555273(1)dated 31.12.2019. (v) This Hon’ble Court may further adjudicate and hold that the action of the Respondent Income Tax Officer in rejecting the explanation offered by the petitioner is a completely arbitrary exercise of authority/power vested in the Respondents. (vi) This Hon’ble Court may further adjudicate and hold that the Respondent Income Tax Officer should have considered this aspect of the matter that the petitioner deposited the case originating from business activity during the demonetisation period. (vii) This Hon’ble Court may further adjudicate and hold that the presumption under section 69A of the Income Tax act can be drawn only when assessee is found to be in possession of money, bullion, jewellery, etc., not recorded in his books of account. (viii) This Hon’ble Court may further adjudicate and hold that since the cash deposited in the bank account has been duly accounted for in the books of accounts, the Respondent ITO could not have treated the alleged deposit in Specified Bank Notes during demonetisation period as unexplained. (ix) To grant any other relief or reliefs for which the petitioner is found entitled in the facts and the Patna High Court CWJC No.3665 of 2020 dt.16-10-2020 4/7 circumstances of the case.” One of the impugned orders is reproduced hereunder:- Patna High Court CWJC No.3665 of 2020 dt.16-10-2020 5/7 Shri Avinash Shekhar, learned counsel for the petitioner, argues that the order passed is cryptic in nature as also the Officer has not assigned any reason for carrying out re- assessment in the case of the petitioner. Having perused the same, we are of the considered view that all material facts necessary for adjudication were recorded and considered by the Officer and as such the order cannot be said to be in violation of principles of natural justice, even Patna High Court CWJC No.3665 of 2020 dt.16-10-2020 6/7 though it may be short in nature. Since disputed questions of fact are raised before us, we refrain from adjudicating the same, reserving liberty to the petitioner to prefer a statutory appeal which is an equally efficacious remedy. As such, present petition stands disposed of. At this stage, learned counsel for the petitioner submits that limitation may not come in the way of adjudication of the appeal. Shri Rishi Raj Sinha, learned counsel for the Income Tax Department, states that if an appeal is preferred within a period of four weeks from today, the issue of limitation shall neither be raised nor allowed to come in the way of adjudication of the appeal on merits, more so keeping in view current Pandemic Covid-19. Statement is accepted and taken on record. Shri Rishi Raj Sinha, learned counsel appearing for the Income Tax Department, states that as on date no coercive action stands taken against the petitioner in terms of the demand raised pursuant to the passing of the impugned order and that position would be allowed to be maintained if the petitioner were to file an appeal within a period of four weeks from today. Patna High Court CWJC No.3665 of 2020 dt.16-10-2020 7/7 Statement accepted and taken on record. No other submission is raised by either of the parties. Interlocutory application, if any, shall also stand disposed of. pallavi/- (Sanjay Karol, CJ) ( S. Kumar, J) AFR/NAFR CAV DATE Uploading Date 20.10.2020 Transmission Date "