JIBU JOHN, vs. INCOME TAX OFFICER,

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WP(C)/2339/2024HC KeralaKLHC01005002202423 January 2024Bench: HONOURABLE MR. JUSTICE D. K. SINGH5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the submission of the petitioner was not tenable. The court reasoned that for the purpose of reopening an assessment, it is the estimation of the assessing authority regarding the escaped income that is considered, not the final assessment order. The assessing authority had estimated the escaped income to be over Rs. 50,00,000/-, which met the threshold provided under Section 149 of the Act, thereby granting jurisdiction to reopen the assessment. Consequently, the court found no substance in the writ petition and dismissed it. The court also directed the assessing authority to consider the petitioner's rectification application expeditiously and noted that the petitioner could still challenge the assessment order before the appellate authority, without prejudice to the observations made in the judgment.

What were the facts?

The petitioner, Jibu John, a Non-Resident Indian residing in the UAE, did not file an income tax return for Assessment Year 2015-16. Information from the Insight portal indicated transactions totaling Rs. 60,08,932/- in the financial year 2014-15. The Income Tax Officer (ITO) issued a notice under Section 148 on March 31, 2022, and subsequently passed an order under Section 144A(d), opining that income had escaped assessment. The ITO estimated the escaped income to be Rs. 92,63,390/-, which exceeded the threshold of Rs. 50,00,000/- under Section 149 of the Income Tax Act, 1961, justifying the reopening of the assessment. The petitioner filed this writ petition challenging the assessment order.

What were the issues?

1. Whether the jurisdictional Income Tax Officer had the jurisdiction to proceed with the reopening of the assessment for Assessment Year 2015-16, given that the petitioner contends the escaped income was only Rs. 20,29,690/-, which is below the threshold for reopening under Section 149 of the Income Tax Act, 1961. Assessee's Contention: The learned counsel for the petitioner argued that the final assessed income that escaped assessment was only Rs. 20,29,690/-, which did not meet the threshold requirement for the jurisdictional ITO to have jurisdiction to reopen the assessment under Section 149 of the Act. Revenue's Contention: The judgment does not explicitly record any specific arguments made by the revenue. However, the court's reasoning implies that the revenue's position, as understood by the court, was that the estimation of escaped income by the assessing authority at the time of reopening was the relevant factor.

Which sections of the Income-tax Act were involved?

Section 147,Section 144C(13),Section 148,Section 144A(d),Section 149

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 TUESDAY, THE 23RD DAY OF JANUARY 2024 / 3RD MAGHA, 1945 WP(C) NO. 2339 OF 2024 PETITIONER: JIBU JOHN, MURUPPEL VEEDU PARANTHAL, PATHANAMTHITTA, PIN – 689518. BY ADVS. SRI. K. S. HARIHARAN NAIR SRI. C. SAJU DAVID SMT. HARIMA HARIHARAN SMT. G. REMADEVI SRI. RAJATH R. NATH SRI. DHEERAJ SASIDHARAN RESPONDENTS: 1 INCOME TAX OFFICER, WARD - 1(2), PUSHKARA HOUSE, NH - 37, NUTUN GOAN P. O., MOHANAGHAT, DIBRUGARH, ASSAM, PIN – 786008. 2 PRINCIPAL COMMISSIONER OF INCOME TAX, OFFICE OF THE PRINCIPAL COMMISSIONER OF INCOME TAX , AAYAKAR BHAVAN, MAHATMA GANDHI ROAD, SHILLONG, MEGHALAYA, PIN – 793001. 3 INCOME TAX OFFICER, WARD 2, OFFICE OF ADDITIONAL CIT, THIRUVALLA RANGE, TK ROAD, THIRUVALLA, KERALA, PIN – 689101. 4 DEPUTY COMMISSIONER OF INCOME TAX, INTERNATIONAL TAXATION, AAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM, KERALA, PIN – 695003. 5 ASSISTANT COMMISSIONER OF INCOME TAX (HQ) & SECRETARY, DISPUTE RESOLUTION PANEL - 2, 'A' WING, 4TH FLOOR, KENDRIYA SADAN, KORAMANGALA, BENGALURU, PIN – 560034. BY ADVS. SRI. P. G. JAYASHANKAR - SC SRI. KEERTHIVAS GIRI - SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23.01.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C) NO. 2339 OF 2024 2 DINESH KUMAR SINGH, J. -------------------------- W.P.(C) No. 2339 of 2024 ------------------------- Dated this the 23rd day of January, 2024 JUDGMENT 1. The present writ petition has been filed impugning Exhibit P-12 assessment order in respect of the assessment year 2015-16 under Section 147 read with Section 144C(13) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’ for short). 2. The petitioner is non Non Resident Indian living in United Arab Emirates. He did not file return of his income for the assessment year 2015-16. Information through Insight portal was received for the assessment year which would disclose hat the petitioner had transactions of Rs. 60,08,932/- in the financial year 2014-15 relevant to the assessment year 2015-16. 3. A notice under Section 148 of the Act was was issued on 31.03.2022 by the jurisdictional ITO and, thereafter, notice under 144A(d) was passed. The assessing authority was of the opinion that the income of the petitioner has escaped assessment in the relevant year and, therefore, it was a fit case for reopening the assessment. Thus, the income which escaped assessment according to the assessing authority is Rs. 92,63,390/-. This amount is over the threshold limit of Rs. 50,00,000/-

WP(C) NO. 2339 OF 2024 3 as provided under Section 149 of the Act. 4. The learned Counsel for the petitioner submits that after assessment the income has come only Rs. 20,29,690/- which had escaped assessment in the relevant year and, therefore, the jurisdictional ITO did not have any jurisdiction to proceed with reopening of the assessment. 5. I find the submission not tenable. It is not the final assessment order which is looked at. But in the estimation of the assessing authority, the threshold income is more than Rs. 50,00,000/- which has escaped assessment, and, therefore, reopened the assessment. Therefore, I find no substance in this writ petition, which is hereby dismissed. 6. The petitioner has filed rectification application in Exhibit P-13. The assessing authority is directed to consider and pass order on the rectification application expeditiously. 7. The petitioner, however, may challenge the assessment order before the appellate authority and if the appeal is filed against the said assessment order, the appellate authority will consider the appeal in accordance with the law without being prejudice to any of the observations made herein above.

Sd/- DINESH KUMAR SINGH JUDGE Svn

WP(C) NO. 2339 OF 2024 4 APPENDIX OF WP(C) 2339/2024 PETITIONER’S EXHIBITS EXHIBIT P1 COPY OF THE NOTICE DATED 15-03-2022 ISSUED BY THE 1ST RESPONDENT EXHIBIT P2 COPY OF THE NOTICE DATED 23-03-2022 ISSUED BY THE 1ST RESPONDENT EXHIBIT P3 COPY OF THE REPLY DATED 29-03-2022 SUBMITTED BY THE PETITIONER AGAINST EXT. P2 EXHIBIT P4 COPY OF ACKNOWLEDGMENT FROM THE INCOME TAX WEB PORTAL FOR SUBMISSION OF EXT. P3 EXHIBIT P5 COPY OF THE ORDER DATED 31-03-2022 ISSUED BY THE 1ST RESPONDENT EXHIBIT P6 COPY OF THE NOTICE UNDER SECTION 148 DATED 31-03-2022 ISSUED BY THE 1ST RESPONDENT EXHIBIT P7 COPY OF THE ORDER DATED 14-12-2022 ISSUED BY THE 2ND RESPONDENT EXHIBIT P8 COPY OF THE LETTER DATED 19-12-2022 ISSUED BY THE 3RD RESPONDENT EXHIBIT P9 COPY OF THE NOTICE UNDER SECTION 143(2) DATED 06-03-2023 ISSUED BY THE 4TH RESPONDENT EXHIBIT P10 COPY OF THE DRAFT ASSESSMENT ORDER DATED 16-03-2023 ISSUED BY 4TH RESPONDENT EXHIBIT P11 COPY OF THE DIRECTIONS DATED 31-10-2023 ISSUED BY THE 5TH RESPONDENT EXHIBIT P12 COPY OF THE ASSESSMENT ORDER DATED 28-11- 2023 ISSUED BY THE 4TH RESPONDENT EXHIBIT P13 COPY OF THE RECTIFICATION PETITION DATED 28-12-2023 FILED BY THE PETITIONER AGAINST EXT. P12

WP(C) NO. 2339 OF 2024 5 EXHIBIT P14 COPY OF THE JUDGMENT DATED 07-12-2023 OF THE HON'BLE KARNATAKA HIGH COURT IN PRAMILA MAHADEV TADKASE VS. THE INCOME TAX OFFICER & OTHERS (WRIT PETITION NO. 18407 OF 2023) EXHIBIT P15 COPY OF THE JUDGMENT DATED 10-11-2023 OF THE HON'BLE DELHI HIGH COURT IN GANESH DASS KHANNA VS. INCOME TAX OFFICER AND ANR (W.P. (C) 11527/2022 & CM APPL. 34097/2022 AND CONNECTED CASES)

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