HARBINDER SINGH vs. UNION OF INDIA AND ANR

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CWP/20036/2023HC Punjab & HaryanaPHHC01114783202330 November 2023Bench: MR. JUSTICE GURMEET SINGH SANDHAWALIA,MS. JUSTICE LAPITA BANERJI2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the writ petition in limine. The Court held that the petitioner had an alternative statutory remedy of appeal under Section 246 of the Income Tax Act, 1961, against the assessment order and consequential penalty. The Court noted that the petitioner had been duly put on notice regarding the cash deposits and that his explanation regarding agricultural income was rejected due to insufficient evidence. The Court found that the petitioner failed to raise the defense regarding the ownership of the deposited amount during the assessment proceedings and could not introduce it for the first time in writ proceedings. The Court reiterated the principle that writ jurisdiction should not be invoked when a statutory remedy is available, and the petitioner had failed to avail it. While acknowledging that the penalty proceedings were consequential to the primary order, the Court did not comment on the petitioner's remedy against the primary order but dismissed the writ petition on the ground of non-availability of writ jurisdiction due to the existence of an alternative remedy.

What were the facts?

The petitioner, Harbinder Singh, filed a writ petition challenging an assessment order dated December 16, 2019, for Assessment Year 2017-18, and a subsequent penalty order dated January 24, 2022. The petitioner contended that his reply dated July 17, 2018, to a show cause notice under Section 148 of the Income Tax Act, 1961, was not considered. The assessment order, passed by respondent No. 2, rejected the petitioner's claim of agricultural income of Rs. 6,14,097/- due to the non-furnishing of J-Form details for landholding. The Assessing Officer noted that no explanation was provided for cash deposits totaling Rs. 20,75,000/- during the demonetization period. The penalty of Rs. 1,60,293/- was levied under Section 271AAC(1) of the Act, being 10% of the taxable amount of Rs. 16,02,937/-, determined under Section 69A read with Section 271AAC. The petitioner invoked writ jurisdiction without availing the statutory remedy of appeal.

What were the issues?

1. Whether the writ petition is maintainable when an alternative statutory remedy of appeal under Section 246 of the Income Tax Act, 1961, is available against the assessment order and consequential penalty proceedings. 2. Whether the petitioner's reply dated July 17, 2018, to the show cause notice under Section 148 of the Act was considered by the Assessing Officer before passing the assessment order dated December 16, 2019. 3. Whether the petitioner can raise a new defense regarding the ownership of the deposited amount for the first time in writ proceedings. Assessee's contentions: The petitioner argued that his reply to the show cause notice was not considered. He also sought to raise a defense regarding the ownership of the deposited amount, referring to a bank statement. The petitioner invoked writ jurisdiction as a challenge to the assessment and penalty orders. Revenue's contentions: The revenue, through the orders of the Assessing Officer, contended that no satisfactory explanation was provided for the cash deposits and that the claim of agricultural income was rejected due to lack of supporting documentation (J-Form). The revenue also implicitly argued that the petitioner failed to avail the statutory remedy of appeal.

Which sections of the Income-tax Act were involved?

Section 148,Section 271AAC(1),Section 69A,Section 156,Section 246

AI-generated summary — verify with the full judgment below

Neutral Citation No. 2023:PHHC:152421 -DB

IN THE HIGH COURT OF PUNJAB AND HARYANA

AT CHANDIGARH

(111)

CWP-20036-2023 Decided on : 30.11.2023 Harbinder Singh

……Petitioner(s) Versus Union of India & another

……Respondent(s)

CORAM : HON'BLE MR.JUSTICE G.S. SANDHAWALIA HON'BLE MS.JUSTICE LAPITA BANERJI

Present: Mr.Malkiat Singh, Advocate for the petitioner (s).

G.S. Sandhawalia, J. (Oral)

Challenge in the present writ petition, filed under Articles 226/227 of the Constitution of India is to the assessement order dated 16.12.2019 (Annexure P-4) passed by respondent No.2 for the Assessment Year 2017-18. 2.

The case made out by the petitioner is that the reply filed on 17.07.2018 (Annexure P-3) to the show cause notice dated 05.06.2018 issued under Section 148 of the Income Tax Act, 1961 (for short, the ‘Act’) was not taken into consideration. Resultantly, prayer for quashing of the order dated 24.01.2022 (Annexure P-7) whereby an order under Section 271AAC(1) of the Act had been passed has been sought to be made out wherein penalty of Rs.1,60,293/- being the 10% of the taxable amount of Rs.16,02,937/- was levied and the necessary demand notice was issued. 3.

A perusal of the notice of demand under Section 156 of the Act would go on to show that opportunity was given to file an appeal under Part A of Chapter XX of the Act. Without taking recourse to the statutory remedy of filing an appeal under Section 246 provided under the Act, the writ petition has been filed. We are of the considered opinion that the petitioner had been duly put to notice for the amounts which were shown credited in his bank to the tune of Rs.20,75,000/- which were during the demonetization period. The explanation given that he is an agriculturist and had filed returns and the prayer for dropping the proceedings was rejected vide order dated 16.12.2019 (Annexure P-4) by recording that no explanation had been given regarding the source of cash deposit in response to the notice. SAILESH RANJAN 2023.12.05 13:45 I attest to the integrity/authenticity of this document/order

(111) CWP-20036-2023

-2-

The agriculture income of Rs.6,14,097/- has been shown in the return filed but entry of the land holding in J-Form has not been furnished and therefore, the claim of agricultural income was rejected. The amount deposited was determined in the returned income under the provisions of Section 69A read with Section 271AAC of the Act and thus the penalty proceedings had also been initiated separately. Apparently the said order was never subject matter of challenge and it was only when the penalty proceedings had been initiated on 24.01.2022, the writ jurisdiction of this Court has been invoked. 5.

Accordingly, we are of the considered opinion that the argument which has now been sought to be raised as to whether the amount belonged to the petitioner himself while referring to the bank statement (Annexure P-10) is not liable to be taken into consideration. It was for the petitioner to raise the same in his defence upon the notice which was served upon him and convince the authorities. Having failed to take the said defence, he cannot be allowed to take it for the first time in writ proceedings under Articles 226/227 of the Constitution of India. It is settled principle that Writ Court is not to enter into disputed arenas keeping in view the statutory remedy available under the provisions of the Act and the petitioner having failed to avail the said remedy, the writ jurisdiction cannot be invoked. The consequential proceedings are in the nature of penalty and therefore, we do not wish to comment upon the fact that the petitioner had an alternate remedy also against the primary order. In such circumstances, we do not exercise our extraordinary writ jurisdiction. 6.

Resultantly, in view the above discussion, the present writ petition is dismissed in limine.

(G.S. SANDHAWALIA) JUDGE

(LAPITA BANERJI) 30.11.2023

JUDGE sailesh

Whether speaking/reasoned : Yes

Whether Reportable :

SAILESH RANJAN 2023.12.05 13:45 I attest to the integrity/authenticity of this document/order

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