PRAMOD KUMAR JAIN vs. PRINCIPAL COMMISSIONER OF INCOME TAX AND ANOTHER

WTAX/1649/2025HC AllahabadUPHC01156470202516 April 20255 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the writ petition, holding that the petitioner had failed to point out any extraordinary or exceptional circumstances to bypass the statutory alternative remedy of appeal. The Court noted that the parameters for exercising jurisdiction under Article 226 of the Constitution of India are well-settled and should be exercised sparingly, only in exceptional circumstances, even when an alternative remedy exists. The judgment cited the Supreme Court's decisions in Jaipur Vidyut Vitran Nigam Limited vs. MB Power (MP) Limited and Radha Krishan Industries vs. State of H.P. to emphasize that when a statute prescribes a remedy, that remedy must be pursued before invoking the discretionary remedy under Article 226. The Court found no failure of natural justice or lack of jurisdiction in the proceedings. The determination made by the assessing authority, based on the material on record, was open to appeal. Therefore, the petition was dismissed, leaving it open for the petitioner to avail the alternative remedy.

What were the facts?

The petitioner, Pramod Kumar Jain, is challenging an order dated 12.03.2025 passed by the Assistant Commissioner of Income Tax under Section 143(3) of the Income Tax Act, 1961, for assessment year 2018-19. The petitioner had declared an income of Rs. 15,94,710. The assessment order, passed under Section 143(3) read with Section 144B, completed the assessment at Rs. 27,27,570, adding undisclosed income and ad-hoc disallowances. Subsequently, a notice under Section 263 was issued by the Principal Commissioner of Income Tax (PCIT) due to a significant difference between the declared turnover (Rs. 19,86,02,939) and cash deposited in bank accounts (Rs. 27,85,96,000). The PCIT found the original assessment order erroneous and prejudicial to revenue interest, partly setting it aside. This led to further notices under Section 142(1) and show cause notices under Sections 68 and 69A regarding unexplained cash credits/money. The petitioner provided explanations, including GST/VAT collections and purchase invoices, but these were not accepted, leading to the impugned order.

What were the issues?

1. Whether the impugned order dated 12.03.2025, which added Rs. 7,99,93,061 as unexplained money under Section 69A of the Income Tax Act, 1961, is sustainable? Assessee's contentions: The petitioner argued that the excess cash deposits were explained by the amount of VAT/GST collected, which was not part of the declared turnover. They claimed to have produced requisite documents, including GSTR-9C and Form 52, to support this explanation, and purchase invoices with transportation receipts to demonstrate stock possession. They contended that the respondent was not justified in rejecting their explanation. Revenue's contentions: The respondents argued that the PCIT's order under Section 263 was justified as the original assessment was made without proper verification. They asserted that after detailed investigation, the assessing officer correctly concluded that the petitioner failed to explain the excess cash deposits. Furthermore, they contended that the petitioner has an alternative remedy of appeal under the Act and there is no reason to bypass this remedy, thus the writ petition deserves dismissal.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 263,Section 142(1),Section 68,Section 69A

AI-generated summary — verify with the full judgment below

1 Neutral Citation No. - 2025:AHC:64534-DB Chief Justice's Court Case :- WRIT TAX No. - 1649 of 2025 Petitioner :- Pramod Kumar Jain Respondent :- Principal Commissioner of Income Tax and another Counsel for Petitioner :- Ashish Bansal, Rama Goel Bansal Counsel for Respondent :- Gaurav Mahajan, Manu Ghildiyal Hon'ble Arun Bhansali, Chief Justice Hon'ble Kshitij Shailendra, J.

1.

This petition is directed against order dated 12.03.2025 passed by Assistant Commissioner of Income Tax, Circle-2 (1) (1), Agra under Section 143 (3) of the Income Tax Act, 1961 (for short ‘the Act’) for the assessment year 2018-19. 2. The petitioner filed his return for the assessment year 2018-19 on 31.10.2018 reflecting an income of Rs.15,94,710/-, which included business income from his proprietary concern, namely M/s Agarwal Distributor, which it is claimed, is the authorized distributor of ITC and Haldiram snacks.

3.

Notice under Section 143(2) of the Act was issued on 22.09.2019 after picking up the return for scrutiny and assessment order dated 21.04.2021 was passed under Section 143(3) read with Section 144B of the Act and against the returned income of Rs.15,94,710/-, assessment was completed a

The order continues below.

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