Sarikonda Jagadeswara Rao V. The Union of India, Rep. by Secretary, Ministry of Finance, New Delhi and The Principal Commissioner of Income Tax, O/a The Income Tax Officer, Ward-1(1), Vijayawada

WP/21291/2023

AI Insights

The case involves Sarikonda Jagadeswara Rao, the petitioner, challenging a pre-assessment order under Section 148A(d) of the Income Tax Act, which assessed him a tax of Rs.49,95,410. The order followed a notice under Section 148A(b) alleging significant foreign remittance and currency purchase transactions linked to the petitioner. The petitioner argued that these transactions were related to a loan received and subsequently transferred to his daughter in the USA, thus not taxable. The court acknowledged the issuance of a notice under Section 148 and allowed the petitioner to present his objections, emphasizing that these would be considered in the subsequent assessment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 802627 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 09-10-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act-1961, Article 226 of the Constitution of India
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: HARINATH; M KIRANMAYEE
• Assessee Lawyers: VEMURU VP MURTHY
• Keywords: Agricultural income; Foreign remittance; Income Tax; Loan transaction; Writ of Mandamus; Pre-assessment order
• Section: 148; 148A

Judgement Text

"IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI (Special Original Jurisdiction) MONDAY, THE NINTH DAY OF OCTOBER TWO THOUSAND AND TWENTY THREE PRESENT HONOURABLE SRI JUSTICE U.DURGA PRASAD RAO AND HONOURABLE SRI JUSTICE A V RAVINDRA BABU WRIT PETITION NO: 21291 OF 2023 Between: Sarikonda Jagadeswara Rao, S/o Balarama Raju, Aged about years, R/o Flat No.103, Lotus Residency, Revenue Colony, Nandigama Town and Mandal, NTR District, A.P -521185 ...PETITIONER AND 1. The Union of India, Rep. by Secretary, Ministry of Finance, New Delhi. 2. The Principal Commissioner of Income Tax, O/a The Income Tax Officer, Ward-1(1), Vijayawada ...RESPONDENTS Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue Order or direction more particularly in the nature of Writ of Mandamus, declaring the act of the Respondents as illegal, Arbitrary, violation of natural Justice and consequently suspending the Order passed by the Respondents under Clause-d of Section - 148A of the Income Tax Act-1961 and pass such other order or orders that the Hon'ble Court deems fit and proper in the interest of Justice. Else, I shall suffer irreparable loss and serious inconvenience. IA NO: 1 OF 2023 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to direct the Respondents not to make further proceedings in connection with the Order passed by the Respondents under Clause - b of Section-148(a) of Income Tax Act-1961. Counsel for the Petitioner(s): SRI. VEMURU VP LAKSHMINARASIMHA MURTHY Counsel for the Respondent No.1 : SRI HARINATH N, DEPUTY SOLICITOR GENERAL OF INDIA Counsel for the Respondent No.2 : M KIRANMAYEE (SC FOR INCOMETAX ) The Court made the following: ORDER HON'BLE SRI JUSTICE U.DURGA PRASAD RAO AND HON'BLE SRI JUSTICE A.V.RAVINDRA BABU WRIT PETITION No.21291 of 2023 ORDER: (per UDPR, J) The challenge in this writ petition is to the pre-assessment order under Section 148A(d) of IT Act passed by the ITO, Ward 1(1), Vijayawada, whereunder, he assessed the petitioner to pay the tax of an amount of Rs.49,95,410/-. 2. (a) It should be noted that prior to the above impugned order, the ITO has issued a notice under 148(A)(b) of the IT Act stating that the petitioner has made the following transactions as per the annexure enclosed to the said notice: \"1. You have sent foreign remittance of Rs.24, 97, 705/- to Laya Sarikonda (remittee), USA through State Bank of India. 2. You have purchased foreign currency of Rs. 24, 9 7, 705 through State Bank of India. 3. You have filed a Form of declaration (form 61) that you have agricultural income and is not in receipt of any other income chargeable to income tax in respect of 2 transactions specified in Rule 114E wherein you have mentioned/stated that your estimated non-agricultural income is 10,000/-.\" (b) The said notice was issued on 10.03.2023. The petitioner, it appears, submitted the e-mail response dated 27.03.2023 as follows: \"Sir I am out of country since November, 2022. I will be back on last week of April 2023. Kindly 30 more days time to submit detailed information.\" (c) Thereafter, the impugned pre-assessment order under Section 148(A)(d) came to be passed on 31.03.2023 by the ITO observing that the assessee was required to furnish reply on or before 20.03.2023. However, the assessee replied that he is out of country and needs time up to April ending to give full reply. The Assessee's request was not accepted and in the absence of proper reply, it is deemed that income has escaped for the AY 2019-20 and hence, it was considered as a fit case for issuance of notice under Section 148 of the IT Act for the AY 2019-20. 3. Learned standing counsel for respondents would submit that notice under Section 148 of IT Act was also issued to the petitioner 3 and if the petitioner has any objection, he can submit and it will be considered in accordance with law and due order will be passed. 4. The petitioner before us would argue that the petitioner and his daughter have obtained a loan of Rs.25 Lakhs from IDBI Bank, Vijayawada Branch, in the month of September, 2018. The said loan amount was credited to the bank account of the petitioner and later, as the petitioner's daughter is residing in USA, the petitioner has transferred an amount of Rs.24,97,705/- by purchasing foreign currency to his daughter's account and the amounts mentioned in the annexure attached to the notice dated 10.03.2023 relate to the said loan transaction and therefore, he need not pay any tax in that regard. As it is submitted by the learned standing counsel that notice under Section 148 of IT Act was already issued, we deem it apposite to give an opportunity to the petitioner to submit his objections/reply to the said notice, so that the concerned authority will consider the same and pass an appropriate order. 5. Accordingly, this writ petition is disposed of giving liberty to the petitioner to submit his explanation/objections to the notice said to be issued under Section 148 of IT Act within two weeks 4 from the date of receipt of copy of this order and the said explanation/objections shall be considered during the assessment proceedings by the concerned authority and if requested by the petitioner, the said authority may also afford a personal hearing through video conferencing and then, pass an appropriate order in accordance with the governing law and rules. No costs. As a sequel, interlocutory applications pending, if any, in this case shall stand closed. SD!- M. SRINIVAS ASSISTANT REGISTRAR //TRUE COPY// To, 1. The Secretary, Ministry of Finance, Union of India, New Delhi. 2. The Principal Commissioner of Income Tax, O/o The Income Tax Officer, Ward-1(1), Vijayawada 3. One CC to SRI. VEMURU VP LAKSHMINARASIMHA MURTHY Advocate [OPUC] 4. One CC to SRI. M KIRANMAYEE (SC FOR INCOMETAX) [OPUC] 5. One CC to SRI HARINATH N, DEPUTY SOLICITOR GENERAL OF INDIA [OPUC] 6. Three CD Copies Madhu OFFICER HIGH COURT DATED :09/10/2023 ORDER WP.No.21291 of 2023 19 OCT 2023 DISPOSING THE WP WITHOUT COSTS "