DINESH DINAKARAN PILLAI vs. THE INCOME TAX OFFICER

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WA/138/2024HC KeralaKLHC01004172202401 February 2024Author: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR,HONOURABLE DR. JUSTICE KAUSER EDAPPAGATH4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the learned Single Judge was absolutely justified in remitting the matter back to the respondent (ITO) to pass fresh orders after hearing the appellant. The Court noted that the core of the dispute, concerning whether there was a single transaction of ₹30,00,000/- or two such transactions in the relevant financial year, is a disputed question of fact. Such factual disputes cannot be adjudicated in a writ petition. The appellant was advised to raise all his contentions before the respondent during the fresh proceedings. The appeal was accordingly dismissed. No issue was expressly left undecided.

What were the facts?

The appellant, Dinesh Dinakaran Pillai, sold 50 cents of land for ₹30,00,000/- on 27.2.2016. The Income Tax Officer (ITO), respondent, issued a notice under Section 133(6) for Assessment Year 2016-2017. Following no reply, the ITO issued a show cause notice under Section 148A, proposing to issue a notice under Section 148. The appellant contended that Section 149 barred reassessment if escaped income was less than ₹50,00,000/- and more than 3 years had passed. The ITO issued an order under Section 148A(4) holding the case fit for Section 148 notice. The appellant challenged this order in a writ petition. The learned Single Judge set aside the order for lack of hearing and remanded the matter for fresh consideration after hearing the appellant.

What were the issues?

1. Whether the learned Single Judge was justified in remitting the matter to the respondent for passing fresh orders after hearing the appellant, considering the disputed question of fact regarding the number of transactions in the relevant financial year. Assessee's Contentions: - The reassessment was initiated based on information from the INSIGHT Portal, not independent inquiry. - The respondent's claim of two transactions of ₹30,00,000/- each in the financial year, as stated in the impugned order, is a duplication and incorrect, as there was only one transaction of ₹30,00,000/-. - The question of whether there was one or two transactions is a disputed question of fact that cannot be adjudicated in a writ petition. Revenue's Contentions: - The judgment records no specific contentions for the revenue regarding the issues raised by the assessee, other than implicitly supporting the ITO's action in proceeding with the reassessment.

Which sections of the Income-tax Act were involved?

Section 133(6),Section 148A,Section 148,Section 149

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR & THE HONOURABLE DR. JUSTICE KAUSER EDAPPAGATH THURSDAY, THE 1ST DAY OF FEBRUARY 2024 / 12TH MAGHA, 1945 WA NO. 138 OF 2024 AGAINST THE JUDGMENT DATED 15.11.2023 IN WP(C) 23174/2023 OF HIGH COURT OF KERALA APPELLANT/PETITIONER: DINESH DINAKARAN PILLAI, AGED 52 YEARS S/O. P. DINAKARAN PILLAI, MEKKAPLATHARA, PAZHAVADI STREET, NEDUMANGAD, PIN - 695541 BY ADVS.ASWIN GOPAKUMAR ANWIN GOPAKUMAR, SARANYA BABU ADITYA VENUGOPALAN, NIKITHA SUSAN PAULSON MAHESH CHANDRAN SHALLET K. SAM RESPONDENT/RESPONDENT: THE INCOME TAX OFFICER THE OFFICE OF THE INCOME TAX OFFICER, WARD 2 (1), TRIVANDURM, AAYAKAR BHAVAN, PEROORKADA, KOWDIAR, THIRUVANANTHAPURAM, KERALA, PIN - 695003 BY .ADV. P.G. JAYASHANKAR KEERTHIVAS GIRI SC-P.G.JAYASHANKER. THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 01.02.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: J U D G M E N T Dated this the 1st day of February, 2024 Dr. Kauser Edappagath, J.

The appellant is the writ petitioner. He sold 50 cents of land belonging to him in Vilappil Village in Thiruvananthapuram on 27.2.2016 for a total sale consideration of ₹30,00,000/-. On 7.2.2023, the respondent issued Ext.P2 notice to the appellant under Section 133(6) of the Income Tax Act calling for information on his income tax return for the assessment year 2016-2017. The appellant did not give any reply. Thereafter, the respondent issued Ext.P3 show cause notice to the appellant under Section 148A of the Income Tax Act, requiring him to show cause as to why a notice under Section 148 of the Income Tax Act should not be issued. The appellant gave Ext.P4 reply to the said notice, mainly contending that Ext.P3 show cause notice was not maintainable as Section 149 of the Income Tax Act specifically provided that unless entries in the books of account which have escaped assessment of more than ₹50,00,000/-, no notice under Section 148 of the Income Tax Act can be issued for an assessment after 3 years have been elapsed from the end of the assessment year. According to the appellant, since the total sale consideration was only ₹30,00,000/-, invocation of Section 148 was not justified. Thereafter, the respondent passed Ext.P5 order repelling the contentions raised by the appellant in Ext.P4 reply and holding that the case is fit for issuance of notice under Section 148 of the Income Tax Act. The appellant challenged Ext.P5 order before the learned Single Judge.

2.

The learned Single Judge found that Ext.P5 order was passed without hearing the appellant. Accordingly it was set aside and the matter was remanded back to the respondent to pass fresh orders in accordance with law after hearing the appellant. Aggrieved by the said judgment, the appellant is before us.

3.

We have heard Sri. Aswin Gopakumar, the learned counsel for the appellant and Sri. P.G. Jayashankar, the learned Standing Counsel for the respondent.

4.

The learned counsel for the appellant submitted that the sole reason for re-opening the assessment is based on the information received from the INSIGHT Portal and not on an independent inquiry conducted by the respondent. The learned counsel further submitted that though the transaction made by the appellant was only for a sum of ₹30,00,000/-, the respondent for the first time in Ext.P5 order stated that there are two transactions in the said financial year, each of ₹30,00,000/- and it is nothing but duplication. The question whether there was a single transaction or two transactions in the relevant financial year or not is a disputed question of fact. While the appellant states that there was only one transaction, the respondent maintains the stand that there are two transactions. The said question of fact cannot be adjudicated in a writ petition. Hence, we find that the learned Single Judge was absolutely justified in remitting the matter to the respondent to pass fresh orders after hearing the appellant. The appellant can raise all his contentions before the respondent. The writ appeal fails and accordingly, it is dismissed. DR. A.K.JAYASANKARAN NAMBIAR JUDGE DR. KAUSER EDAPPAGATH JUDGE kp

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