M/S. SHAMROCK TRADING COMPANY, vs. THE INCOME TAX OFFICER,

WP(C)/10584/2023HC KeralaKLHC01023831202320 October 2023Author: HONOURABLE MR. JUSTICE D. K. SINGH5 pages

AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala, while disposing of the writ petition, did not decide the merits of the assessment order. Instead, it permitted the petitioner to file a rectification application before the assessing authority. The Court directed the assessing authority to consider the rectification application and take into account the certificate (Ext.P8) issued by SBI, Tuensang Branch, Nagaland, dated May 4, 2023. This certificate confirms that the RTGS transfer of Rs. 1,08,90,000/- from Mr. Chingmak Chang on December 21 and 22, 2017, was received in RBL Bank at Surat and not in any of the petitioner's bank accounts. The Court also ordered that no recovery shall be effected pursuant to the impugned assessment order until the rectification application is finally decided. The principle here is that procedural fairness and consideration of crucial evidence should be afforded, even if it means allowing for rectification of apparent errors.

What were the facts?

The petitioner, M/s. Shamrock Trading Company, filed a writ petition challenging an assessment order (Ext.P7) passed by the 2nd respondent. The assessing authority added an income of Rs. 1,08,90,000/- to the petitioner's income, attributing it to RTGS transfers from Mr. Chingmak Chang on December 21 and 22, 2017. The petitioner contended that they never received this amount in their bank accounts and were in the process of obtaining particulars from Nagaland. The assessing authority finalized the assessment without waiting for a reply from the State Bank of India in Nagaland. Subsequently, SBI, Tuensang Branch, Nagaland, issued a certificate (Ext.P8) stating the amount was received in RBL Bank, Surat, and not in any of the petitioner's bank accounts in Idukki.

What were the issues?

1. Whether the assessment order passed by the 2nd respondent, adding Rs. 1,08,90,000/- as the petitioner's income based on RTGS transfers, is erroneous given the petitioner's denial of receipt and pending verification. Assessee's Contention: The petitioner argued that they never received the Rs. 1,08,90,000/- in their bank accounts and were seeking confirmation from Nagaland. They further presented a certificate from SBI, Tuensang Branch, indicating the funds were received in RBL Bank, Surat, and not by the petitioner. The petitioner has no bank account in Surat. Revenue's Contention: The judgment does not record any specific contentions made by the revenue in response to the petitioner's submissions during the writ petition proceedings. The assessment order itself is the basis of the dispute.

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH FRIDAY, THE 20TH DAY OF OCTOBER 2023 / 28TH ASWINA, 1945 WP(C) NO. 10584 OF 2023 PETITIONER: M/S. SHAMROCK TRADING COMPANY, IDUKKI KAVALA, BUILDING NO. XIII/445, KATTAPPANA, IDUKKI, PIN – 685 508. REPRESENTED BY ITS MANAGING PARTNER, SUNNY FRANCIS BY ADVS. HARISANKAR V. MENON MEERA V.MENON R.SREEJITH K.KRISHNA RESPONDENTS: 1 THE INCOME TAX OFFICER, WARD 1 & TPS,MAHIMA TOWERS, TEMPLE ROAD, THODUPUZHA, IDUKKI DISTRICT, PIN – 685 584. 2 THE ADDITIONAL/JOINT/DEPUTY/ASST. COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER NATIONAL E-ASSESSMENT CENTRE, DELHI, PIN – 110 001. 3 STATE BANK OF INDIA ERNAKULAM REGION OFFICE III BRANCH, SBT BHAVAN, PANAMPILLY NAGAR, ERNAKULAM, KOCHI , PIN - 682037 REPRESENTED BY ITS REGIONAL MANAGER. BY ADV CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20.10.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 10584 OF 2023 2 DINESH KUMAR SINGH, J. -------------------------------------------- WP(C) NO. 10584 OF 2023 -------------------------------------------- Dated this the 20th day of October, 2023

J U D G M E N T

The present writ petition has been filed impugning Ext.P7 assessment order passed by the 2nd respondent. The assessing authority has added income of Rs.1,08,90,000/- as receipt for RTGS transfer by one Mr. Chingmak Chang, who is from a recognized Tribe of Nagaland State on two different dates i.e., 21.12.2017 and 22.12.2017. The specific and categorical stand of the petitioner was that the petitioner had never received the said amount in his bank account and petitioner was in process of obtaining particulars and certificate from Nagaland in respect of the RTGS payment of Rs.1,08,90,000/-. The assessing authority did not wait for the reply from the State Bank of India in Nagaland and finalised the assessment order for an WP(C) NO. 10584 OF 2023 3 amount of Rs.1,08,90,000/- as the income of the petitioner.

Learned counsel for the petitioner submits that SBI, Tuensang Branch, Nagaland has issued certificate in Ext.P8 dated 04.05.2023 which reflects that this amount was received on 21.12.2017 and 22.12.2017 in RBL Bank at Surat and no amount has been received in any of the bank account of the petitioner maintained at Kattappana, Idukki District. The petitioner has no bank account in Surat.

Considering the aforesaid facts, the petitioner is permitted to file rectification application before the assessing authority to rectify the mistake. While considering the rectification application of the the petitioner, the assessing authority should take into consideration Ext.P8 certificate issued by the SBI, Tuensang Branch, Nagaland on 04.05.2023 in respect of the RTGS

WP(C) NO. 10584 OF 2023 4 transfer from the account of Mr. Chingmak Chang on 21.12.2017 and 22.12.2017. 4. The petitioner should file rectification application within a period of 15 days. Till the rectification order is finally passed, no recovery shall be effected in pursuance to the impugned order.

With the aforesaid directions, the present writ petition is disposed of. DINESH KUMAR SINGH JUDGE rpr

WP(C) NO. 10584 OF 2023 5

Appendix — schedule of exhibits

APPENDIX OF WP(C) 10584/2023 PETITIONER’S EXHIBITS Exhibit P1 COPY OF ORDER ISSUED BY THE 1ST RESPONDENT DTD. 29-03-2022 Exhibit P2 COPY OF NOTICE ISSUED BY THE 2ND RESPONDENT DTD. 31-10-2022 Exhibit P3 COPY OF NOTICE ISSUED BY THE 2ND RESPONDENT DTD. 31-10-2022 Exhibit P4 COPY OF REPLY FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DTD. 19-01-2023 Exhibit P5 COPY OF NOTICE ISSUED BY THE 2ND RESPONDENT DTD. 13-03-2023 Exhibit P6 COPY OF LETTER SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DTD. 16-03-2023 Exhibit P7 COPY OF ORDER ISSUED BY THE 2ND RESPONDENT FOR THE YEAR 2018-19 DTD. 21-03-2023 Exhibit P8 COPY OF LETTER ISSUED BY CHIEF MANAGER, STATE BANK OF INDIA, TUENSANG BRANCH, NAGALAND TO THE PETITIONER DTD,. 04-05-2023

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