Shaju Pachelil Pathrose V. The Additional/Joint/Deputy/Assistant Commissioner of Income Tax, Income Tax, Income Tax Officer, National E-Assessment Centre, New Delhi and The Principal Chief Commissioner of Income Tax, Ayakkar Bhavan, Kochi and The Income Tax Officer, Muvattupuzha

WP(C)/20400/2023

AI Insights

The case involves a writ petition filed by Shaju Pachelil Pathrose against the assessment order and penalty notice issued by the Income Tax Department. The assessment was reopened due to high-value cash transactions reported in the year 2015, amounting to Rs. 6.91 crores, with significant cash deposits. The petitioner contested the assessment and penalty, arguing that he was not given adequate time to respond to the notices. However, the court found that the petitioner had been granted sufficient time and had not utilized it effectively, thus upholding the actions of the tax authorities. The court also noted that the petitioner has the option to appeal the decision, which he was encouraged to pursue.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 681884 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 08-12-2023
• Assessment Year: misc
• Other Referred Cases: Union of India & Ors. v. Ashish Aggarwal [2022 SCC Online SC 543]
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: CHRISTOPHER ABRAHAM
• Assessee Lawyers: ABRAHAM MARKOS; SHARAD KODANTHARA; ISAAC THOMAS; ALEXANDER MARKOS; JOHN VITHAYATHIL; P G CHANDAPILLAI ABRAHAM; AIBEL SIBY
• Keywords: Assessment Order; High value cash transactions; Natural Justice; Penalty notice; Reopening of assessment; Writ petition
• Section: 147; 148; 271(1)(c); 69A; 274; 144B; 148A(b)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH FRIDAY, THE 8TH DAY OF DECEMBER 2023 / 17TH AGRAHAYANA, 1945 WP(C) NO. 20400 OF 2023 PETITIONER: SHAJU PACHELIL PATHROSE, AGED 57 YEARS, XI/276A, PACHELIL HOUSE, MUDAVOOR P. O., VAZHAPPILLY, MUVATTUPUZHA, PIN – 686669. BY ADVS. SRI. ABRAHAM JOSEPH MARKOS SRI. SHARAD JOSEPH KODANTHARA SRI. ISAAC THOMAS SRI. ALEXANDER JOSEPH MARKOS SRI. JOHN VITHAYATHIL SRI. P. G.CHANDAPILLAI ABRAHAM SRI. AIBEL MATHEW SIBY RESPONDENTS: 1 THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX OFFICER, NATIONAL E-ASSESSMENT CENTRE, NEW DELHI, PIN – 110001. 2 THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, AYAKKAR BHAVAN, OLD RAILWAY STATION ROAD, KOCHI, PIN – 682018. 3 THE INCOME TAX OFFICER, MUVATTUPUZHA, PIN – 686669. BY ADV. SRI. CHRISTOPHER ABRAHAM – SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.12.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 20400 OF 2023 2 DINESH KUMAR SINGH, J. -------------------------- W.P.(C) No.20400 of 2023 ------------------------- Dated this the 8th day of December, 2023 JUDGMENT 1. The present writ petition has been filed by the petitioners impugning the assessment order dated 24.05.2023 in Exhibit P-11 passed under Section 147 read with Section 144B of the Income Tax Act, 1961 and Exhibit P-14 penalty notice dated 24.05.2023 issued under Section 274 read with Section 271 (1) (c) of the Income Tax Act, 1961. 2. Information was flagged in the case of the petitioner in accordance with the risk management strategy formulated by the Central Board of Direct Taxes. The assessment in the case was re- opened by issuing notice under Section 148 dated 28.06.2021. The reasons for re-opening of the assessment was assigned as under; “The assessee has made high value cash transactions. Total credit during the period 01.01.2015 to 31.12.2015 is amounted to Rs. 6.91 crores out of which cash deposits is Rs. 5.88 crore, clearing is Rs. 41.22 lakhs, RTGS is Rs. 38.59 lakhs, NEFT is Rs. 19.55 lakhs. WP(C) NO. 20400 OF 2023 3 In view of the decision of Hon’ble Supreme Court in the case of Union of India & Ors. v. Ashish Aggarwal [ 2022 SCC Online SC 543], the said notice was treated to be a notice under Section 148A (b) of the IT Act, 1961. The Information/material relied upon for receiving the said notice was provided to the petitioner/assessee by the Assessing Authority on 24.05.2022 and the petitioner was asked to file reply to the said notice. In response to the said notice, the petitioner has furnished his reply. After considering the reply furnished by the petitioner to the notice under Section 148A (b) of the Income Tax Act, the Authority was of the opinion that it was a fit case for reopening and the case was reopened issuing notice under Section 148 dated 29.06.2022.” 3. After considering the reply and the submissions the impugned assessment order has been passed and total taxable income has been determined to be Rs. 6,48,29,2113/- with addition of Rs. 6,36,70,393/- under Section 69A of the Income Tax Act. The demand notice for payment of tax was also annexed with the assessment order and direction was issued to initiate penalty proceedings. 4. The learned Counsel for the petitioner submits that the Show Cause Notice issued to the petitioner on 03.05.2023 asking the petitioner to file reply by 06.05.2023 was responded by the WP(C) NO. 20400 OF 2023 4 petitioner/assessee and request for time to file the reply was made up to 20.05.2023. This fact is evident from Exhibit P-8, print out taken from the website of the Department. The petitioner was issued against a notice on 17.05.2023 and the petitioner asked for further time to 07.06.2023. In the meantime, the impugned assessment order has been passed on 24.05.2023. 5. The petitioner admittedly did not filed reply even up to the extended time asked by him up to 20.05.2023. Though the second Show Cause Notice was issued again the petitioner asked time and did not filed reply. It is relevant to take note of the fact that in respect of the first show cause notice the petitioner had asked time up to 20.05.2023 and it was granted to him, which is evident from Exhibit P-8. The petitioner did not file reply and therefore, the Authority was well within its power not to grant further time for the petitioner. Therefore, I do not find much substance in the submission that there is violation of the principles of natural justice. Petitioner cannot go on asking for time one after another in response to the show cause notice issued one after another. Therefore I do not find any ground to interfere with the impugned order or notice. The petitioner has remedy of filing the appeal WP(C) NO. 20400 OF 2023 5 against the assessment order. Petitioner instead of filing the appeal has approached this Court in this writ petition. Considering the fact that this writ petition has remained pending on file of this Court, the petitioner is permitted to file the appeal within period of fifteen days from today before the Appellate Authority and if the petitioner files the appeal against the assessment order within fifteen days, the Appellate Authority shall proceed to examine the appeal on merit as well as the stay application if any, filed along with the appeal. It is made clear that the Appellate Authority will not get into the question of limitation and the appeal should be heard and decided on merit inasmuch as this writ petition has been remain pending in the file of this Court. For a period of fifteen days no coercive steps shall be taken against the petitioner in pursuance to Exhibit P-11 impugned assessment order. The stay application should be decided expeditiously, preferably within a period of two months from the date of its filing. Sd/- DINESH KUMAR SINGH JUDGE Svn WP(C) NO. 20400 OF 2023 6 APPENDIX OF WP(C) 20400/2023 PETITIONER’S EXHIBITS EXHIBIT P1 TRUE COPY OF THE NOTICE DATED 06.01.2023 ISSUED UNDER SECTION 143(2) READ WITH SECTION 147 OF THE INCOME TAX ACT, 1961 BY THE 1ST RESPONDENT TO THE PETITIONER EXHIBIT P2 TRUE COPY OF THE ACKNOWLEDGEMENT AND REPLY DATED 19.01.2023 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT EXHIBIT P3 TRUE COPY OF THE NOTICE DATED 10.04.2023 ISSUED UNDER SECTION 142(1) OF THE INCOME TAX ACT, 1961 BY THE 1ST RESPONDENT EXHIBIT P4 TRUE COPY OF THE ACKNOWLEDGEMENT AND REPLY DATED 12.04.2023 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT EXHIBIT P5 TRUE COPY OF THE NOTICE DATED 24.04.2023 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER EXHIBIT P6 TRUE COPY OF THE REPLY DATED 24.04.2023 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT EXHIBIT P7 TRUE COPY OF THE SHOW CAUSE NOTICE DATED 03.05.2023 ISSUED UNDER SECTION 144B OF THE INCOME TAX ACT BY THE 1ST RESPONDENT TO THE PETITIONER EXHIBIT P8 TRUE COPY OF RESPONSE WITH ACKNOWLEDGEMENT OF THE PETITIONER EXHIBIT P9 TRUE COPY OF THE SHOW CAUSE NOTICE DATED 17.05.2023 ISSUED BY THE ASSESSING OFFICER EXHIBIT P10 TRUE COPY OF THE RESPONSE DATED 18.05.2023 FILED BY THE PETITIONER AND DULY ACKNOWLEDGED BY THE DEPARTMENT WP(C) NO. 20400 OF 2023 7 EXHIBIT P11 TRUE COPY OF THE ASSESSMENT ORDER DATED 24.05.2023 ISSUED BY THE ASSESSING OFFICER EXHIBIT P12 TRUE COPY OF THE JUDGMENT DATED 22.11.2021 OF THIS HONOURABLE COURT IN W.P. (C) NO.21524 / 2021 EXHIBIT P13 TRUE COPY OF THE JUDGMENT DATED 08.06.2023 OF THIS HONOURABLE COURT IN W.P. NO.15590 / 2023 EXHIBIT P14 TRUE COPY OF THE PENALTY NOICE DATED 24.05.2023 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER "