NALUPURAPPATTIL AHEMMAD, vs. INCOME TAX OFFICER,

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WP(C)/44172/2023HC KeralaKLHC01098206202314 February 2024Author: HONOURABLE MR. JUSTICE D. K. SINGH6 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the writ petition. Regarding the first issue, the Court held that the question of whether the petitioner had a 50% share or generated the entire income was a matter to be determined during the assessment proceedings. The Court clarified that the purpose of an order under Section 148A(d) is limited to satisfying the Assessing Authority on whether to proceed with reopening the assessment, not to conduct a detailed inquiry into the income. Since the impugned order indicated that over Rs. 99 lakhs of income from property sales had escaped assessment, the Court found no jurisdictional error in proceeding. Concerning the second issue of jurisdiction, the Court stated that if the International Taxation Ward lacked jurisdiction, it would transfer the matter to the relevant assessing officer. Therefore, the Court found no jurisdictional error or error of law apparent on the face of the record requiring interference. The petitioner was granted liberty to raise all contentions before the assessing authority during the finalization of the assessment order, and it was noted that the petitioner had already filed a return in pursuance to the notice under Section 148. The assessment order would be finalized by the jurisdictional assessing officer after hearing the petitioner.

What were the facts?

The petitioner, Nalupurappattil Ahemmad, filed a writ petition challenging a notice issued under Section 148 and an order passed under Section 148A(d) of the Income Tax Act, 1961. The assessment year in question is 2016-17. The petitioner had not filed a return of income for this year. The Assessing Officer, based on information from the Insight Portal, formed the opinion that income chargeable to tax had escaped assessment. The order under Section 148A(d) indicated that the petitioner received Rs. 99,24,500 as sale consideration for three immovable properties, and the income generated from this receipt remained unexplained. The petitioner had filed a reply to the notice under Section 148A(d) and subsequently to the notice under Section 148, requesting a transfer of the file due to jurisdictional concerns, arguing he was a resident Indian and the International Taxation Ward lacked jurisdiction.

What were the issues?

1. Whether the order passed under Section 148A(d) of the Income Tax Act, 1961, is ultravirus, considering the petitioner's contention that he had only a 50% share in the sale consideration, thus reducing his income to less than Rs. 50,00,000? (Question of law and fact, turning on Section 148A(d) and Section 147). 2. Whether the International Taxation Ward has the jurisdiction to proceed with the reassessment proceedings against the petitioner, who claims to be a resident Indian? (Question of law, turning on jurisdictional provisions of the Income Tax Act). Assessee's Contentions: - The petitioner argued that his income would be less than Rs. 50,00,000 due to his 50% share, rendering the impugned order ultravirus. - The petitioner contended that as a resident Indian, the International Taxation Ward lacked jurisdiction over his case. Revenue's Contentions: - The judgment does not explicitly record specific contentions made by the revenue. However, the impugned order under Section 148A(d) suggests the revenue's position that the entire sale consideration of Rs. 99,24,500 was unexplained income that had escaped assessment.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A(d),Section 147

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH WEDNESDAY, THE 14TH DAY OF FEBRUARY 2024 / 25TH MAGHA, 1945 WP(C) NO. 44172 OF 2023 PETITIONER: NALUPURAPPATTIL AHEMMAD, AGED 62 YEARS S/O.MOHAMMAD KUNHI E, AL-VAZEELA MANZIL, KADINHIMOOLA, THAIKADAPPURAM.P.O, NILESHWAR., PIN - 671314 BY ADV T.K.VIPINDAS RESPONDENTS: 1 INCOME TAX OFFICER, WARD INT TAX, KOZHIKODE, PIN - 673001 2 PRINCIPAL COMMISSIONER OF INCOME TAX, MANANCHIRA, KOZHIKODE, KERALA, PIN - 673001 3 CENTRAL BOARD OF DIRECT TAXES, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, NORTH BLOCK, NEW DELHI-110002, REPRESENTED BY ITS CHAIRPERSON. BY ADVS. P.G.JAYASHANKAR G.KEERTHIVAS THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 14.02.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

JUDGMENT Dated this the 14th day of February, 2024 The present writ petition has been filed impugning Ext.P3 notice and Ext.P4 order issued and passed under Section 148 of the Income Tax Act, 1961, and passed under Section 148A(d) of the the Income Tax Act, 1961. 2. The petitioner did not file his return of income for the assessment year 2016-17. The specific information was disseminated through the Insight Portal in accordance with the Risk Management Strategy formulated by the CBDT. As per the opinion of the assessing officer, the information available against the petitioner would disclose that income chargeable to tax has escaped assessment within the meaning of Section 147 of the Income Tax Act. After notice, the petitioner had filed the reply and order under Section 148A(d) came to be passed, which would show that the petitioner had received Rs.99,24,500 as sale consideration of three immovable properties, and the income generated from the said receipt remain unexplained. As the petitioner did not file return of his income, the assessing authority in its order under Section 148A(d) was of the opinion that the assessee did not have any proper and valid explanation/submission on the said issue and therefore, the entire consideration of Rs.99,24,500/- would fall within the limit of unexplained income which had escaped assessment. Thereafter, notice under Section 148 has been issued and the petitioner has also submitted reply to the said notice. In reply to the notice issued under Section 148 dated 27.04.2023, the petitioner had requested for transfer of file to the assessing officer having jurisdiction, as according to the petitioner, the petitioner is resident Indian and the International Taxation Ward would not have the jurisdiction in respect of the petitioner.

3.

Learned counsel for the petitioner submits that the petitioner was having a share of 50% only and therefore, the petitioner’s income would become less than Rs.50,00,000/- and therefore, the order impugned becomes ultravirus. He further submits that the petitioner being resident Indian, the International Ward cannot have jurisdiction to proceed with the matter.

4.

As per the details mentioned in the impugned order, the total income which escaped assessment is more than 99 lakhs. Whether the petitioner has 50% share or the petitioner has generated the entire income for himself is the question to be determined in the assessment proceedings. At the stage of finalization of the order under Section 148A(d), detailed enquiry regarding the income of the petitioner cannot be considered. The limited purpose of an order under Section 148A(d) is to have satisfaction by the assessing authority whether to proceed or not to proceed with reopening assessment of the petitioner, in case the income has escaped assessment in the relevant assessment year. In the present case, as per the impugned order more than 99 lakhs of income generated by the petitioner by sale of three properties had escaped assessment, and therefore, there is no jurisdictional error as contended by the learned counsel for the petitioner.

5.

If the International Taxation Ward does not have jurisdiction, it will transfer the matter to the relevant assessing officer for further proceedings. Therefore, I do not find that, this writ petition requires any interference by this Court as there is neither any jurisdictional error nor error of law aparent on the face of record. Thus, the present writ petition is dismissed. It is open to the petitioner to raise all the contentions before the assessing authority while the assessment order is finalized. The petitioner has already filed return in pursuance to the notice under Section 148. Before the finalization of the assessment order, the petitioner shall be heard and then the assessment order will be finalized by the jurisdictional assessing officer. DINESH KUMAR SINGH JUDGE AP

Appendix — schedule of exhibits
APPENDIX OF WP(C) 44172/2023 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE NOTICE UNDER CLAUSE(B) OF SECTION 148 A OF THE INCOME TAX ACT 1961, ISSUED BY THE 1ST RESPONDENT DATED 24-03- 2023 Exhibit P2 TRUE COPY OF THE REPLY SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT 10-04- 2023 Exhibit P3 TRUE COPY OF THE NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT 1961 ISSUED BY THE 1ST RESPONDENT DATED 27-4-2023 Exhibit P4 THE TRUE COPY OF THE ORDER UNDER CLAUSE (D) OF SECTION 148A OF THE INCOME TAX ACT 1961 DATED 27-4-2023 ISSUED BY 1ST RESPONDENT Exhibit P5 TRUE COPY OF THE ACKNOWLEDGMENT OF THE INCOME TAX RETURN FILED BY THE PETITIONER IN ASSESSMENT YEAR 2016-2017 Exhibit P6 TRUE COPY OF THE REPRESENTATION DATED 14- 06-2023 SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT Exhibit P7 TRUE COPY OF THE NOTICE DATED 10.01.2024 ISSUED BY THE INCOME TAX OFFICER WARD-1 & TPS,KASARGOD EXHIBIT P7 True copy of the letter dated 30-01-2023 EXHIBIT P8 True copy of the Acknowledgement No. 939127921300123 EXHIBIT P9 True copy of the letter dated 09-02-2023 EXHIBIT P10 True copy of the Acknowledgement No. 951909481090223 EXHIBIT P11 True copy of the Acknowledgement No. 114301881120423

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