K.R.RASEENA vs. COMMISSIONER OF INCOME TAX

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ITA/71/2018HC KeralaKLHC01080916201814 March 2022Bench: HONOURABLE MR.JUSTICE S.V.BHATTI,HONOURABLE MR.JUSTICE BASANT BALAJI9 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the substantial questions of law raised in these appeals were considered in companion appeals (ITA Nos.68 & 72/2018 and ITA 67/2018) which were disposed of by judgments of even date and 11.03.2022, respectively. The Court relied on the reasons provided in those judgments. Consequently, the substantial questions of law were answered in favour of the Revenue and against the assessee. The appeals were dismissed. The Court did not explicitly state its reasoning on each individual question as presented by the assessee, but rather adopted the reasoning from the companion judgments. The operative direction was the dismissal of the appeals.

What were the facts?

The assessee, K.R. Raseena, is the appellant, and the Commissioner of Income Tax is the respondent. The appeals concern assessment years 2007-08 and 2008-09. The assessee is challenging a common order dated 23.04.2018 passed by the Income Tax Appellate Tribunal (ITAT), Cochin Bench. The proceedings were initiated under Section 153A read with Section 153C of the Income Tax Act, 1961, following a search under Section 132 at the residence of the assessee's father, K.A. Rauf, and his associates. The assessee resides with her father. Notices under Section 153A/153C and Section 142(1) were issued to the assessee.

What were the issues?

The Tribunal had to decide several substantial questions of law: 1. Whether assessment proceedings initiated under Section 153C read with Section 153A were valid, notwithstanding that the search in the father's case did not result in the recovery of any documents relating to the appellant (Section 153C). 2. Whether proceedings under Section 153A read with Section 153C were justified solely on the inference that necessary facts were available to re-open the assessee's case (Section 153A/153C). 3. Whether the Assessing Authority erred in refusing to accept the claim of lease rent receipts for agricultural lands (Section 2(1A)). 4. Whether the observation that the appellant lacked "easement rights" and thus the properties were not in her possession was perverse. 5. Whether the Assessing Authority acted unfairly by not revealing the results of an inquiry confirming the genuineness of lease rent receipts, including lessees' confirmations and the Notary Public's statement. 6. Whether the First Appellate Authority erred in holding that the assessee was not the owner of the land due to lack of mutation, overlooking evidence of registered sale deeds. 7. Whether the ITAT was justified in rejecting the claim of agricultural income from rent solely because Xerox copies of documents were produced, despite the Assessing Authority examining the Notary Public. Assessee's Contentions: The assessee argued that the initiation of proceedings under Section 153C read with Section 153A was flawed as no incriminating material related to her was found during the search of her father's premises. She also contended that the refusal to accept lease rent receipts and the adverse findings on ownership and possession were based on insufficient grounds and overlooked crucial evidence. The revenue's contentions are not explicitly detailed in the provided text, but their stance is implied by their role as respondent and the outcome.

Which sections of the Income-tax Act were involved?

Section 260A,Section 132,Section 153A,Section 153C,Section 142(1),Section 2(1A)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR.JUSTICE BASANT BALAJI MONDAY, THE 14TH DAY OF MARCH 2022 / 23RD PHALGUNA, 1943 ITA NO. 71 OF 2018 AGAINST THE ORDER IN ITA 414/2016 OF I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT/S:

K.R.RASEENA AGED 36 YEARS SHELTER,JAYANTHI NAGAR,P.T.USHA ROAD,CALICUT

BY ADVS. HARISANKAR V. MENON MEERA V.MENON SREEJITH R.NAIR K.KRISHNA

RESPONDENT/S:

COMMISSIONER OF INCOME TAX CENTRAL CIRCLE, KOCHI,682013 SC JOSE JOSEPH THIS INCOME TAX APPEAL HAVING COME UP FOR HEARING ON 14.03.2022, ALONG WITH ITA.85/2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

ITA Nos.71 & 85/2018

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IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR.JUSTICE BASANT BALAJI MONDAY, THE 14TH DAY OF MARCH 2022 / 23RD PHALGUNA, 1943 ITA NO. 85 OF 2018 AGAINST THE ORDER IN ITA 413/2016 OF I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT/S:

K.R.RASEENA AGED 36 YEARS SHELTER, JAYANTHI NAGAR, P.T USHA ROAD, CALICUT.

BY ADVS. HARISANKAR V. MENON MEERA V.MENON SREEJITH R.NAIR K.KRISHNA

RESPONDENT/S:

COMMISSIONER OF INCOMETAX CENTRAL CIRCLE, KOCHI 682 013. THIS INCOME TAX APPEAL HAVING COME UP FOR HEARING ON 14.03.2022, ALONG WITH ITA.71/2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

ITA Nos.71 & 85/2018

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J U D G M E N T [ITA Nos.71/2018, 85/2018] S.V. Bhatti, J.

Heard Adv. Meera V Menon and Adv. Jose Joseph for the parties. 2. One K R Raseena, Calicut/assessee is the appellant in both appeals. Commissioner of Income Tax, Central Circle, Kochi/Revenue is the respondent. The assessee, aggrieved by the common order dated 23.04.2018, is in appeal before this Court under Section 260A of the Income Tax Act 1961 (for short ‘the Act’). The details of orders of assessment etc. are stated in the following table:

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Sl. No. Assessment Year & Date of Assessment Order Order of Commissioner of Income Tax (Appeals) Income Tax Appellate Tribunal ITA No. 1 2008-09; 30.12.2011 ITA C-147-151/Cent/CIT(A)/ IV/ 2011-12 dt.31.03.2016 ITA 414/C/2016 dt.23.04.2018 71/2018 2 2007-08; 30.12.2011 ITA C-147-151/Cent/CIT(A)/ IV/ 2011-12 dt.31.03.2016 ITA 413/C/2016 dt.23.04.2018 85/2018

2.1 The assessee is the daughter of one K A Rauf and a proprietor of M/s. K A Treads. On 05.11.2009, a search of the K A Rauf's residence (i.e., assessee’s father) and his associates was carried out under Section 132 of the Act. On 03.05.2010, based on the documents, details, accounts seized from the premises of K A Rauf, and also that the assessee herein is residing in the same residence of her father K A Rauf, notice under Section 153A read with Section 153C of the Act was issued to assessee. On 17.02.2011, a notice under Section 142(1) of the Act was issued to the assessee.

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3.

Substantial questions of law raised in the appeals are stated thus: “ITA Nos.71 & 85/2018 A: WHETHER the authorities below did not commit an error of law when they upheld the assessment proceedings initiated against the Appellants u/s 153C r/w Sec. 153A NOTWITHSTANDING the fact that the search instituted in the case of Sri Rauf did not result in the recovery of "any cash, jewellery or valuable documents relating to the appellant? B: WHETHER the Proceedings initiated against the Appellant u/s 153A r/w Sec. 153C on the mere ground that "it is enough to hold that there have been necessary facts available to have inferred that the cases of the assessee be re-opened for the purpose of assessment and it could not have been done unless notice u/s 153A r/w Sec. 1534C is issued? C: WHETHER in the facts and circumstances of the case, the Assessing Authority did not commit an error of law when he refused to accept the claim of receipt of "lease rent" in respect of agricultural lands? D: WHETHER the observation that the appellant did not have "easement rights" over the lands involved and therefore the

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properties are not in the possession of the appellant is not perverse?

E: WHETHER the Assessing Authority did not act unfairly and improperly when he did not reveal the results of enquiry conducted by him on the genuineness of the claim of lease rent receipts viz. the fact that every one of the lessees had confirmed the lease in their favour, payment of lease rent as stipulated in the agreements by them and further, the fact that Notary Public who was examined on oath had confirmed that he had verified the photocopies of the agreements with the originals produced before him? F: WHETHER the First Appellate Authority was justified in "overlooking" the evidence collected by the Assessing Authority himself which he had chosen not to refer to in the assessment order and hold that "there has been no evidence for the assessee to be the owner of the land, as the land has not been mutated in their favour" when the properties were purchased as per registered sale deeds? G: WHETHER the Appellate Tribunal was justified in rejecting the claim of agricultural income by way of rent of the agrl. Properties on the sole ground that the documents produced were Xerox copies of the originals when in order to ascertain

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the genuineness of the claim of the appellant, the Assessing Authority had himself examined the Notary Public who had attested the Copies? 4. These questions are considered in the companion appeals [ITA Nos.68 & 72/2018 and ITA 67/2018 &] heard and disposed of by judgments of even date and 11.03.2022 respectively. The reasons are relied on in these appeals. Hence, the substantial questions are answered in favour of the Revenue and against the assessee. The appeals stand dismissed. No order as to costs.

Sd/- S.V.BHATTI JUDGE

Sd/- BASANT BALAJI JUDGE

jjj

ITA Nos.71 & 85/2018

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APPENDIX OF ITA 85/2018

PETITIONER ANNEXURES ANNEXURE A PHOTOCOPY OF ASSESSMENT ORDER DT 30-12-2011 ANNEXURE B PHOTOCOPY OF ORDER OF CIT(A) DT. 31-03-2016 IN ITA- C-147-151/CIT(A) IV/11.12 (COMMON ORDER) ANNEXURE C PHOTOCOPY OF ORDER OF ITAT DT. 23-04-2018 IN I.T.A NO. 413-416/C/2016 (COMMON ORDER) ANNEXURE D STATEMENT RECORDED FROM NOTARY PUBLIC ANNEXURE E PHOTOCOPIES OF NOTICES ISSUED TO AND REPLIES RECEIVED FROM LESSEES

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APPENDIX OF ITA 71/2018

PETITIONER ANNEXURES ANNEXURE-A PHOTOCOPY OF ASSESSMENT ORDER DT 30.12.2011 ANNEXURE-B PHOTOCOPY OF ORDER OF CIT (A) DT 31.03.2016 IN ITS- C-147-151/CIT(A)-IV/11.12 (COMMON ORDER) ANNEXURE-C PHOTOCOPY OF ORDER OF ITAT DT 23.04.2018 IN I.T.A- 413-416/C/2016 (COMMON ORDER) ANNEXURE-D STATEMENT RECORDED FROM NOTARY PUBLIC ANNEXURE-E PHOTOCOPIES OF NOTICES ISSUED TO AND REPLIES RECEIVED FROM LESSEES

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