Sayed Muhammed M. V. The Commissioner of Income Tax (Appeals), National Faceless Assessment Centre and The Income Tax Officer, National Faceless Assessment Centre

WP(C)/42235/2023

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The case involves Sayed Muhammed M., who did not file his income tax return for the assessment year 2017-18 despite having substantial financial transactions, including high-value cash deposits. The Income Tax Department, upon discovering these transactions, reopened his assessment under Section 147 of the Income Tax Act, 1961, and issued notices under Sections 148 and 142(1), which the petitioner failed to adequately respond to. Consequently, the assessing officer assessed his income, including unexplained cash deposits, and demanded tax. The petitioner's appeal against this assessment was dismissed, leading him to file a writ petition in the High Court, which was also dismissed, directing him to the Income Tax Appellate Tribunal for further relief.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 796698 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 15-01-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: C A JOJO
• Keywords: Appellate order; Assessment Order; Income Tax; Non-filing of return; Unexplained Cash Deposits
• Section: 147; 148; 144; 142(1); 250; 69A; 144B

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH MONDAY, THE 15TH DAY OF JANUARY 2024 / 25TH POUSHA, 1945 WP(C) NO. 42235 OF 2023 PETITIONER: SAYED MUHAMMED M., AGED 40 YEARS, S/O. MUHAMMED KASIM, TC 48/1016(7) NOOR MAHAL,OPP. EDAYAR BRIDGE, POONTHURA P.O, THIRUVALLAM, THIRUVANANTHAPURAM, PIN – 695026. BY ADV. SRI. C. A. JOJO RESPONDENTS: 1 THE COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS ASSESSMENT CENTRE, NORTH BLOCK, NEW DELHI, PIN – 110001. 2 THE INCOME TAX OFFICER, NATIONAL FACELESS ASSESSMENT CENTRE, NORTH BLOCK, NEW DELHI, PIN – 110001. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 15.01.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 42235 OF 2023 2 DINESH KUMAR SINGH, J. -------------------------- W.P.(C) No. 42235 of 2023 ------------------------- Dated this the 15th day of January, 2024 JUDGMENT 1. The present writ petitioner has been filed impugning Exhibit P- 6 assessment order issued under Section 147 read with Section 144 and 144B of the of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’ for short) in respect of the assessment year 2017-18 and Exhibit P-11 appellate order under the provisions of Section 250 of the Act. 2. The petitioner, an individual did not file return of his income for the assessment year 2017-18. On verification, the information available in Insight/AIMS/TRACES portal several transactions of high value were noted in the accounts of the petitioner including cash deposits of crores of rupees. In spite of substantial financial transactions during the financial year 2016-17 relevant to assessment year 2017-18, the petitioner did not file return of his income. Considering the material and information, the assessing authority has reasons to believe that the income of the petitioner WP(C) NO. 42235 OF 2023 3 had escaped assessment and took steps to reopen the assessment under Section 147 of the Act. 3. Notice under Section 148 of the Act was issued on 26.03.2021 and same was duly served on the petitioner /assessee electronically. Despite service of notice, the petitioner/assessee did not file the return nor responded to the said notice. Further notice under Section 142(1) of the Act dated 30.10.2021 was issued with detailed questionnaire. But the petitioner did not replied to the said notice nor answered the questionnaire. 4. Again, notice under Section 142 (1) of the Act was issued on 03.12.2021 after the proceedings were transferred from Jurisdictional Assessing Officer to the Assessing Officer (ReFAC) (AU) and reminders were sent on 27.12.2021 and 03.03.2022. A show cause notice dated 23.03.2022 along with draft assessment order was issued to the petitioner. The petitioner availed the facility of Video Conference and submitted that he was providing tour operator agency services and for the purpose of booking air tickets and other bookings on behalf of his clients, the petitioner had used his personal credit card which was reimbursed by his customers. Hence the amounts expended by the petitioner/assessee was not of WP(C) NO. 42235 OF 2023 4 personal nature but incurred for business purpose. The only income received by the petitioner/assessee was the commission on such booking which when aggregated was below the taxable limit. The petitioner had placed statement of credit cared for the financial year 2016-17. 5. Except for furnishing the above explanation, petitioner/assessee did not submit any document/evidence regarding the questions asked in the notice issued under Section 142(1) of the Act. The petitioner did not submit return of his income nor submitted any computation of income, profit and loss, Balance Sheet or bank statements. Considering the said response the assessment order was finalised finding unexplained cash deposits under Section 69A of the Act for an amount of Rs. 1,15,03,870/- and profit from business and profession as Rs. 2,44,008/- and thus the total income in the hands of the petitioner was assessed as Rs. 1,17,47,880/- for the assessment year 2017-18. On the said amount, the tax has been demanded. The petitioner had filed the appeal before the 2nd respondent. However, the appeal came to be dismissed by the impugned order in Exhibit P-11. WP(C) NO. 42235 OF 2023 5 6. This Court finds absolutely no ground to entertain a writ petition against the appellate order when the petitioner has remedy of filing further appeal before the Income Tax Appellate Tribunal under the provisions of the Act. Thus, the present writ petition is disposed of with liberty to the petitioner to approach the Income Tax Appellate Tribunal if he so advised against the impugned Exhibit P-11 order. However, this Court cannot exercise its discretionary power under Article 226 of the Constitution of India which is a public law remedy and not an appellate power vested against an order passed by the assessing authority or the appellate authority under the provisions of the Act. Sd/- DINESH KUMAR SINGH JUDGE Svn WP(C) NO. 42235 OF 2023 6 APPENDIX OF WP(C) 42235/2023 PETITIONER’S EXHIBITS EXHIBIT P1 A TRUE COPY OF THE ACKNOWLEDGEMENT OF APPLICATION FOR FIRM DISSOLUTION DATED 13.07.2017 SUBMITTED BEFORE THE REGISTRAR OF FIRMS EXHIBIT P2 A TRUE COPY OF NOTICE ISSUED BY THE 2ND RESPONDENT DATED 27.12.2021 EXHIBIT P3 A TRUE COPY OF THE REPLY SUBMITTED BY THE PETITIONER DATED 28.12.2021 EXHIBIT P4 A TRUE COPY OF THE DRAFT ASSESSMENT ORDER DATED 23.03.2022 ISSUED BY THE 2ND RESPONDENT EXHIBIT P5 A TRUE COPY OF THE REPLY SUBMITTED BY THE PETITIONER DATED 25.03.2022 EXHIBIT P6 A TRUE COPY OF THE ASSESSMENT ORDER DATED 29.03.2022 ISSUED BY THE 2ND RESPONDENT EXHIBIT P7 A TRUE COPY OF THE DEMAND NOTICE DATED 29.03.2022 ISSUED BY THE 2ND RESPONDENT EXHIBIT P8 A TRUE COPY OF NOTICE U/S 148 DATED 26.03.2021 ISSUED BY THE 2ND RESPONDENT EXHIBIT P9 A TRUE COPY OF THE RELEVANT PAGES OF 26AS FOR THE AY 2017-18 EXHIBIT P10 A TRUE COPY OF THE APPEAL FILED BEFORE THE 1ST RESPONDENT DATED 23.05.2022 EXHIBIT P11 A TRUE COPY OF THE ORDER U/S 250 DATED 29.11.2023 ISSUED BY THE 1ST RESPONDENT "