Snehalatha Neelam, W/o Finny Samuel Neela V. The Union of India, Represented by its Secretary (Revenue), Ministry Finance, Department of Revenue and Principal Commissioner of Income Tax, Vishakapatnam -1 and Additional/Joint/Deputy/Assistant Commissioner of Income Tax/ Income-tax Officer, National Faceless Assessment Centre and Income Tax Officer (Investigation), Unit-3, Vishakapatnam and Income Tax Officer (Ward), 1(4), Vishakapatnam and Income Tax Officer (Ward), 1(1), Vishakapatnam

WP/23632/2023

AI Insights

The case involves Snehalatha Neelam, the petitioner, who challenged the orders related to her income tax assessments for the assessment year 2015-16. The petitioner had declared undisclosed income under the Income Declaration Scheme, 2016, but faced subsequent assessments and demands that she contended were unjust and not in accordance with the scheme. The primary legal issues revolved around the interpretation and application of the Income Declaration Scheme, 2016, and the procedural fairness in the assessment process, particularly in light of the disruptions caused by the COVID-19 pandemic. The court found that the Commissioner of Income Tax had not adequately considered the payments made under the scheme and had dismissed the revision petition on grounds that were not substantiated by the records.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 813678 (HC-AMARAVATI)
• Appeal Type: Others
• Pronouncement Date: 29-07-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: Y V KUMAR; A KRISHNA; VIJAY PONNA
• Assessee Lawyers: JYOTHI ANUMOLU
• Keywords: Article 14; Assessment Order; Income Declaration Scheme; Natural Justice; Revision petition; Undisclosed income; Writ of Mandamus
• Section: 147; 144; 142(1); 271(1)(c); 274; 264; 156; 226

Judgement Text

"IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI (Special Original Jurisdiction) MONDAY, THE TWENTY NINETH DAY OF JULY TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE G.NARENDAR AND THE HONOURABLE SMT JUSTICE KIRANMAYEE MANDAVA WRIT PETITION NO: 23632 OF 2023 Between: Snehalatha Neelam, W/o Finny Samuel Neela, aged about 58 Sampath Enclave, Srinagar, Visakhapatnam, Andhra Pradesh years, 48-8-19, - 530016 ...PETITIONER AND 1. The Union of India, Represented by its Secretary (Revenue), Ministry Finance, Department of Revenue North Block, New Delhi - 110 001 2. Principal Commissioner of Income Tax, Vishakapatnam -1, Vishakapatnam District. 3. Additional/Joint/Deputy/Assistant Commissioner of Income Tax/ Income-tax Officer, National Faceless Assessment Centre 4. Income Tax Officer (Investigation), Unit-3, Vishakapatnam, Vishakapatnam District. 5. Income Tax Officer (Ward), 1(4), Vishakapatnam ,Vishakapatnam District of Delhi 6. Income Tax Officer (Ward), 1(1), Vishakapatnam, Vishakapatnam District. ...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 a writ, order or direction more particularly the one in the nature of Writ of Mandamus declaring order bearing ITBA/COM/F/17/2022- 23/1051470658(1) dated 28.03.2023 and assessment order bearing ITBA/AST/S/147/2021-22/1035334720(1) dated 07.09.2021 under Section 147 of the Income Tax Act and consequent demand notice under Section 156 of the Income Tax Act and notice for penalty under Section 274 read with Section 271(1)(c) of the Income Tax Act vide Notice bearing No. ITBA/PNL/S/271(1)(c)/2021-22/1035334840(1) dated 07.09.2021 as being arbitrary, illegal, unreasonable, in contravention of the provisions of the Income Tax Act apart from being violative of the principles of natural justice and Article 14 of the Constitution of India and consequently set aside the same. lA 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 stay the operation of order bearing lTBA/COM/F/17/202 2- 23/1051470658(1) dated 28.03.2023 and assessment order bearing ITBA/AST/S/147/2021-22/1035334720(1) dated 07.09.2021 under Section 147 of the Income Tax Act and consequent demand notice under Section 156 of the Income Tax Act and notice for penalty under Section 274 read v /ith Section 271(1)(c) of the Income Tax Act vide Notice bearing No. ITBA/PNL/S/271(1)(c)/2021-22/1035334840(1) dated 07.09.2021. Counsel for the Petitioner(s): Smt. JYOTHI RATNA ANUMOLU Counsel for the Respondent No.1 ; SRI Y V ANIL KUMAR (Central Government Counsel) Counsel for the Respondents 2 to 6 : SRI A RADHA KRISHNA, SC for IT Counsel for the Respondents : SRI VIJAY KUMAR PONNA The Court made the following: ORDER 1 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI THE HONOURABLE SRI JUSTICE G.NARENDAR THE HONOURABLE SMT. JUSTICE KIRANMAYEE WRIT PETITION NO: 23632 nf 909'^ ORDER: {per Hon’ble Smt. Justice Kiranmayee Mandava) The writ petition is fiied assailing the order of the Commissioner Income Tax (CIT) passed under Section 28.03.2023. MANDAVA of “ 264 of the Income-tax Act, dated 2. Heard Smt. Jyothi Ratna Anumolu petitioner and Sri Vijay Kumar Ponna, learned learned counsel for the counsel for the respondents. 3. It is contended that to avail the benefits of the Scheme, 2016 (IDS, 2016) for the has filed a declaration Income Disclosure assessment year 2015-16, the petitioner on 30.09.2016 under Income Declaration 2016, declaring undisclosed income of Rs. 10,03,500/-. Scheme, The Principal . Commissioner has acknowledged the and same issued Form I arrd II. It is contended that the income declared under the scheme shall not be included in the total income of the declarant for any assessment year. Despite the same, it is contended that the department has issued notice under Section 148 of the Income Tax Act, dated 24.03.2020 requiring the assessed to file return of income within 30 days. It is contended that due to 2 nation-wide lock down on account of outbreak of Covid pandemic, she did not file the return of income as required by the Department, also could not respond to the notice issued under Section 142 (1) of the Income Tax Act dated 26.02.2021. It is further contended that to the subsequent notice dated 05.08.2021 asking the petitioner to submit the data on or before 10.08.2021 she could not upload the response, since the notice dated 05.08.2021 appears to have not been uploaded in the portal. Thereafter, the assessment order under Section 147 r/w Section 144 of the Act was passed without giving opportunity to the petitioner raising a demand of Rs. 17,56,508/-. The petitioner contends that the tax paid by her under Income Declaration Scheme, 2016 was not considered by the assessing Officer while passing the order of assessment. Against the said order of assessment, the petitioner nd has filed a revision petition before the 2 respondent under Section 264 of the I ncome Tax Act, 1961. The Commissioner dismissed the Revision Petition observing that the petitioner did not respond to the notices issued by the assessing officer nor furnished any evidence before the assessing authority during the course of the -assessment proceedings under Section 147 r/w Section 144 of the Act. 4. The Commissioner further ok^served that payments made by the assessee under Income Disclosure Scheme, 2016, the relevant assessment year was . stated to have been mentioned as 2017-18, towards ‘expenditure tax’. The CIT dismissed the Revision Petition observing that the details of payment made by the petitioner were not found reflected and the nature and purpose 3 for which the declaration was made was not forthcoming. The present writ petition is directed against the said order dismissing the Revision Petition. Learned counsel for the petitioner, Ms. Jyothi Ratna Anumolu, contends that the petitioner could not respond to the notice issued under Section 148 because of the outbreak of Covid-2019 and nationwide lockdown. The subsequent notice under Section 142 of the Act was also issued during the second wave of Covid. Regarding the 3rd notice issued on 05.08.2021, though they attempted to send a reply, since the notice dated 05.08.2021 not uploaded to the web portal, the petitioner could not upload its response as { the system was not accepting the reply submitted by the petitioner. It contended that immediately after that, the assessment order was passed without giving the petitioner any opportunity. In the revision petition, also the Commissioner had not take into consideration the amounts paid under the IDS, 2016, for whimsical reasons. 5. was IS 6. Per contra, the learned Senior Standing Counsel for Income Tax department Sri Vijay Kumar Punna, appearing for the respondent would . contend that the petitioner was provided a sufficient opportunity. The notices issued under Section 142 (1) of the Act and the show cause notices were all served on the petitioner through e-mail. And all the notices have been generated by the department through ITBA, and the same were accessible to the petitioner through e- filing module. And further stated that the credit for tax paid by the petitioner under IDS, 2016 could not be considered, in view of the fact that the petitioner has mentioned the assessment year as 2017-18 and 4 / the ‘head of the account’ was mentioned as ‘expenditure tax’. Therefore, the same was not reflected in any of online records of the department for the relevant assessment year 2015-16. He further contended that without availing the remedy of the appeal against the order of the assessing officer, passed under section 147 r/w Section 144 of the Act, the petitioner has filed the revision petition. He thus contends that the petitioner does not deserve any indulgence by this Court. 7. Considered the rival submissions. 8. It appears from the record that the reason for not considering the amounts paid by the petitioner under IDS, 2016, is that the petitioner has mentioned under the column relating to the '\"assessment year” - ‘2017-18’, and in the column relating to the description of the ‘head’ it was mentioned as ‘expenditure tax’. The Commissioner of Income Tax observed that the payment made was reflected in the online. 9. We are of the view that the Commissioner before coming to such a conclusion should have verified the records and should have borne in mind that the period during which scheme was in vogue was only up to the financial year 2015-16. The Commissioner should not have rejected the claim of the petitioner for erroneous mentioning of the assessment year as 2017-18 and the head of account as expenditure tax as the said error would not render the declaration as invalid. 5 10. The IDS scheme, 2016 also provides the conditions under which the declaration can be treated as void. The same are as under: A declaration shall be void and shall be deemed to have been made if: never • The declarant fails to pay tax, surcharge and penalty before 30\"’ November, 2016. • Where the declaration is made by misrepresentation or suppression of facts of information. • An invalid declaration would invite stringent consequences of penalty and prosecution under the Act, in addition to taxes and any taxes paid under the scheme becomes non-refundabie.\" As noted from the same, none of the situations of the instant case, as pointed out by the CIT i.e., clerical mistakes in filling up the forms, would render the declaration void. The Commissioner exercising jurisdiction' under section 264 of the I.T. Act is a quasi-judicial authority. He should have examined the record and verified the details before rejecting the petitioner’s on whimsical grounds. The Commissioner should have noted that IDS ,2016, would be applicable only up to the Financial Year 2015-16, and the petitioner would not have intended to pay for an assessment year, i.e., 2017-18, as the scheme was not in operation during that period. case 11. The petitioner in her revision petition has sought for following relief before the CIT; “Therefore, the Assessee humbly prays your good selves for Revision of the Assessment Order for the AY 2015-16 issued by the Assessing Officer, NFAC, New Delhi, by disallowing the erroneous additions of Rs.15 lakhs of investment pertaining to the Joint Owner of the flat purchased and taking into account Undisclosed Income declared under the IDS, 2016 Rs.10,03,500 (Rupees Ten Lakhs Three Thousand Five Hundred Only) and Income tax of Rs.4,51,576 (Rupees Four lakhs Fifty 6 One Thousand Five Hundred Seventy Six Only) and Her past Savings over the years and cancel the Demand raised against the Assessee.\" With regard to the issue of investment in the property, though a copy of the sale deed was filed by the petitioner, in support of her contention that she is also one of the co-owner of the property along with her husband, the CIT has disregarded the same on the ground that the sale deed does not disclose the sharing pattern. The said observation of the CIT defies logic and common sense, in the absence of any material or finding that some third persons are also shown as vendees to the said document, apart from the petitioner and her husband, the finding borders on perversity. We therefore are constrained to set aside impugned order of Commissioner of Income Tax Visakhapatnam-1, passed under Section 264 of the Act, dated 28.03.2023 unsustainable. The writ petition is accordingly allowed in part, remanding the matter to the 2\"'\"^ respondent for consideration afresh, in accordance with law, after giving due opportunity to the petitioner. 12. as 13. The Writ Petition stands ordered accordingly. No order as to costs. As a sequel, pending interlocutory applications, if any, shall stand closed. Sd/- A VENU GOPALA RAO ASSISTANT REGISTRAR SECTION OFFICER //TRUE COPY// To, 1. The Secretary (Revenue), Ministry of Finance, Department of Revenue, Union of India, North Block, New Delhi - 110 nOOl % 2. The Principal Commissioner of Income Tax Vishakapatnam District. 3. The Additional/Joint/Deputy/Assislant Commissioner Income-tax Officer, National Faceless Assessment 4. The Income Tax Officer (Investigation), Unit-3, Vishakapatnam Vishakapatnam District. 5. The Income Tax Officer (Ward), 1(4). Vishakapatnam District 6. The Income Tax Officer (Ward). 1(1). Vishakapatnam District 7. One CC to Smt JYOTHI RATNA ANUMOLU 8. One CC to SRI YV ANIL KUMAR [OPUC] 9. One CC to SRI A RADHA KRISHNA. SC for IT [OPUC] One CC to SRI VIJAY KUMAR PONNA. Three CD Copies Vishakapatnam -1 . of Income Tax/ Centre. Delhi .Vishakapatnam Vishakapatnam Advocate [OPUC] (Central Government Counsel) 10. Advocate [OPOUC] 11. Madhu > HIGH COURT DATED:29/07/2024 f. . / ORDER WP.No.23632 of 2023 I 1? FEB 2025 ^ ^ Current Section . CJ ' 'I PARTLY ALLOWING THE WP WITHOUT COSTS "