PREMALATHA KOROTTOLIPRASANTHAM vs. INCOME TAX OFFICER

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WP(C)/27808/2023HC KeralaKLHC01060941202323 November 2023Bench: HONOURABLE MR. JUSTICE D. K. SINGH5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the writ petition had no merit. The Court found that the impugned assessment order was not without jurisdiction nor did it involve a violation of any statutory provision. The assessment proceedings were completed for escaped income, and the petitioner's failure to respond to statutory notices under Sections 148 and 142(1) of the Income Tax Act, 1961, justified the assessment. The Court noted that the petitioner had the option to file an appeal against the assessment order. Therefore, the writ petition was dismissed. The operative direction was to dismiss the writ petition, with liberty to the petitioner to file an appeal against the assessment order.

What were the facts?

The petitioner, Premalatha Korottoliprasantham, failed to file her income tax return for Assessment Year 2018-19. Her case was selected for scrutiny, and a notice under Section 148 of the Income Tax Act, 1961, was issued to reopen her assessment based on information regarding cash deposits aggregating to Rs. 1,46,38,460/- in her bank account. Notices under Section 142(1) were issued, but the petitioner did not comply. Despite statutory notices and communications, she failed to file a return in response to the Section 148 notice or respond to any notices. A show cause notice was issued, after which the petitioner filed her return on March 18, 2023, declaring a total income of Rs. 6,06,800/-. The Assessing Officer added the unexplained cash deposit of Rs. 1,46,38,460/- as income from other sources under Section 69A and initiated penalty proceedings.

What were the issues?

1. Whether the assessment order dated 28.03.2023, passed under Section 147 read with Section 144B of the Income Tax Act, 1961, is without jurisdiction or in violation of statutory provisions, warranting interference by this Court in its writ jurisdiction. Assessee's Contention: The petitioner, instead of availing appellate remedies, approached the High Court, implicitly arguing that the assessment order was flawed and should be quashed by the writ court. The specific grounds of challenge are not explicitly detailed in the judgment, but the act of filing a writ petition suggests a challenge to the validity of the assessment proceedings. Revenue's Contention: The revenue, through its submissions and the assessment order, contended that the assessment proceedings were validly initiated and completed under the relevant provisions of the Income Tax Act, 1961, for escaped income, and that the petitioner's failure to comply with statutory notices justified the ex-parte assessment.

Which sections of the Income-tax Act were involved?

Section 139,Section 147,Section 144B,Section 148,Section 142(1),Section 69A

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 THURSDAY, THE 23RD DAY OF NOVEMBER 2023 / 2ND AGRAHAYANA, 1945 WP(C) NO. 27808 OF 2023 PETITIONER: PREMALATHA KOROTTOLIPRASANTHAM, 1”PRASANTHAM”,KOROTHOLI, PUTHIYANGADI P. O., CALICUT, PIN – 673001. BY ADVS. SRI. P. RAGHUNATHAN SRI. PREMJIT NAGENDRAN SMT. M. SHYLAJA SRI. RISHAL K. RESPONDENTS: 1 INCOME TAX OFFICER, WARD 1(1), AAYAKAR BHAVAN,NORTH BLOCK, NEW ANNEXURE BUILDING,MANANCHIRA, CALICUT, PIN – 673001. 2 ASSESSMENT UNIT, INCOME TAX DEPARTMENT,MINISTRY OF FINANCE, GOVERNMENT OF INDIA, NEW DELHI, PIN – 110001. 3 CENTRAL BOARD OF DIRECT TAXES, MINISTRY OF FINANCE, NORTH BLOCK, NEW DELHI, BY CHAIRMAN, PIN – 110001. 4 GOVERNMENT OF INDIA, MINISTRY OF FINANCE, CENTRAL SECRETARIAT, NORTH BLOCK, NEW DELHI BY SECRETARY, PIN – 110001. BY ADV. SRI. CHRISTOPHER ABRAHAM - SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23.11.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C) NO. 27808 OF 2023 2 DINESH KUMAR SINGH, J. -------------------------- W.P.(C) No.27808 of 2023 ------------------------- Dated this the 23rd day of November, 2023 JUDGMENT 1. The present writ petition has been filed impugning the assessment order in Exhibit P-1 dated 28.03.2023 under Section 147 read with Section 144B of the Income Tax Act, 1961. 2. The petitioner did not file her regular return under Section 139 of the Income Tax Act, 1961 (hereinafter referred to as “the Act” for short) for the assessment year 2018-19. The petitioner’s case was selected for scrutiny on the basis of the specific information by issuing notice under Section 148 of the Income Tax Act, 1961. The case of the assessee was reopened on the following ground; ‘the assessee has cash deposits including bearers cheque aggregating to Rs. 1,46,38,460/- in his bank account.’ Notices under Section 142 (1) of the Act dated 05.01.2023 and 28.02.2023 were issued to the petitioner. The petitioner did not complied with the notices. Further, communication dated 08.02.2023 fixing date of compliance 15.02.2023 was addressed to the petitioner requiring reply in respect of the said cash transactions in her bank account.

WP(C) NO. 27808 OF 2023 3 The petitioner had failed to respond to the notices issued under Sections 148 and 142 (1) of the Act. In spite of several statutory notices and communication letter, the assessee has failed to file her return of income in response to the notice under Section 148 and did not responded to any of the notices. Therefore, a show cause notice dated 13.03.2023 was issued to the assessee fixing the date of compliance on 20.03.2023. thereafter, the assessee/petitioner has submitted her reply on 20.03.2023 and filed return of her income on 18.03.2023 declaring total income of Rs. 6,06,800/-. 3. Considering the unexplained cash deposit to the extent of Rs. 1,46,38,460/-, the said income was added to the income of the petitioner as income from other sources under the provisions of Section 69A of the Act. Accordingly the penalty proceedings were initiated for the unexplained cash deposit. 4. Instead of taking recourse to the appellate provision, the petitioner has approached this Court against the impugned assessment order. This Court does not find that the impugned assessment order is without jurisdiction or violation of any statutory provision which provides for completing an assessment proceedings for the escaped income. Thus, this writ petition has no merit and

WP(C) NO. 27808 OF 2023 4 the same is hereby dismissed. However, it would be open to the petitioner to file appeal against the said assessment order if she is so advised. Sd/- DINESH KUMAR SINGH JUDGE Svn

WP(C) NO. 27808 OF 2023 5 APPENDIX OF WP(C) 27808/2023 PETITIONER’S EXHIBITS EXHIBIT P-1 ORDER OF ASSESSMENT DT. 28.03.2023 FOR AY 2018.19 BY SECOND RESPONDENT EXHIBIT P-2 PHOTOCOPY OF SHOW CAUSE NOTICE DT. 13.03.2023 BY SECOND RESPONDENT EXHIBIT P-3 PHOTOCOPY OF ORDER U/S 148A[D] DT. 25.03.2022 BY FIRST RESPONDENT EXHIBIT P-4 PHOTOCOPY OF NOTICE U/S 148 DT. 25.03.2022 BY FIRST RESPONDENT EXHIBIT P-5 PHOTOCOPY OF ITR ACKNOWLEDGEMENT DT. 18.03.2023 AND TRADING /PROFIT & LOSS ACCOUNT AND BALANCE SHEET FOR FY 2017.18

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