ANILKUMAR SHARMA vs. THE ASST. COMMISSIONER OF INCOME TAX

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WP(C)/3680/2017HC KeralaKLHC01051627201703 February 2017Bench: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN4 pages
AI SummaryDismissed

What did the High Court hold?

The Tribunal held that the petitioner's application, seeking verification of loan creditors' returns and production of confirmation letters, does not amount to rectification of errors apparent from the record. Instead, it constitutes an attempt to re-examine the genuineness of the transactions, which would require a review of the assessment order. The power of review is not conferred upon the Assessing Officer. Therefore, the proper remedy for the petitioner is to file an appeal against the assessment order. The writ petition is dismissed with liberty to avail of the appellate remedy.

What were the facts?

The petitioner, Anil kumar Sharma, is aggrieved by the non-consideration of his rectification application (Exhibit P4) filed before the Assessing Officer. The Assessing Officer had issued notices under Sections 143(2) and 142(1) of the Income Tax Act, 1961. The assessment order (Exhibit P2) was finalized on 30.12.2016, proposing to assess income based on amounts shown as credit from loans from various persons, which the petitioner could not substantiate with documents. The petitioner's Chartered Accountant appeared before the Assessing Officer. The petitioner filed a rectification petition on 16.01.2017, arguing for verification of returns of loan creditors and producing confirmation letters to prove transaction genuineness.

What were the issues?

1. Whether the petitioner's application, seeking verification of loan creditors' returns and production of confirmation letters, constitutes a valid ground for rectification under Section 154 of the Income Tax Act, 1961, or if it amounts to a review of the assessment order. Assessee's Contention: The petitioner contends that the rectification application was filed to address issues related to the genuineness of loan transactions, implying that the Assessing Officer should have considered further verification. The petitioner relied on the production of confirmation letters as evidence. Revenue's Contention: The judgment does not explicitly record arguments from the revenue. However, the court's reasoning suggests that the revenue would likely argue that the application seeks to re-examine the merits of the assessment, which is beyond the scope of rectification.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 142(1),Section 154

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN FRIDAY, THE 3RD DAY OF FEBRUARY 2017/14TH MAGHA, 1938 WP(C).No. 3680 of 2017 (H) --------------------------- PETITIONER(S): -------------------------- ANILKUMAR SHARMA,

8/2117 A, SHARMA NIKETHAN,

GUJARATHI ROAD, MATTANCHERRY,

KOCHI-2.

BY ADVS.SRI.HARISANKAR V. MENON, SMT.MEERA V.MENON. RESPONDENT(S): ---------------------------

THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, CHITTOOR ROAD, KOCHI-11.

BY SRI.JOSE JOSEPH, SC.

THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03-02-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs.

WP(C).No. 3680 of 2017 (H) APPENDIX PETITIONER'S EXHIBITS:- EXHIBIT-P1: COPY OF NOTICE ISSUED BY THE RESPONDENT 20.09.2016.

EXHIBIT-P1(A): NOTICE ISSUED BY THE RESPONDENT 05.12.2016.

EXHIBIT-P2: COPY OF ASSESSMENT ORDER PASSED BY THE RESPONDENT FOR 2014-15 DATED 30.12.2016.

EXHIBIT-P3: COPY OF AIR TICKET TO DELHI FROM KOCHI DATED 19/12/2016. EXHIBIT P3A COPY OF THE RELEVANT PAGE OF THE PASSPORT OF THE PETITIONER WITH CHINESE VISA DATED 19/12/2016. EXHIBIT P3B COPY OF THE AIR TICKET TO KOCHI FROM DELHI DATED 10/12/2016.

EXHIBIT-P4: COPY OF RECTIFICATION PETITION FILED BY PETITIONER BEFORE THE RESPONDENT DATED 16.01.2017.

RESPONDENT'S EXHIBITS:- NIL. //TRUE COPY// P.S. TO JUDGE rs.

K. Vinod Chandran, J ---------------------------------------- W.P.(C).No.3680 of 2017-H ---------------------------------------- Dated this the 03rd day of February, 2017 JUDGMENT The petitioner is aggrieved with the non-consideration of Exhibit P4 rectification application filed before the Assessing Officer. 2. The petitioner was issued with notices under Sections 143(2) and 142(1) of the Income Tax Act, 1961 [for brevity “the Act”], as seen from Exhibits P1 and P1(a). A reading of Exhibit P2 would indicate that there were other notices also issued. The Chartered Accountant of the petitioner also appeared before the Assessing Officer. The notice proposed to assess the income at the hands of the petitioner, of amounts were shown as credit on loan acquired from different persons. The petitioner was not able to produce documents to substantiate such loans. In such circumstance, the assessment was finalised as per Exhibit P2. 3. The assessment order is appealable. However, the petitioner chose to file a rectification application, at Exhibit P4. Even at that point of time the contention raised is that the returns of the

WP(C) No.3680 of 2017 - 2 - parties who advanced loan have to be verified. To prove the genuineness of the transaction, the petitioner also produced confirmation letters. This would not amount to rectification of errors, since genuineness of the transaction would have to be considered and decided which, in effect, would result in a review, which power is not conferred on the authority. The proper remedy of the petitioner is to file an appeal, which the petitioner has to avail of. The writ petition would stand dismissed with liberty to avail of the appellate remedy. Sd/- K.Vinod Chandran Judge. vku/- [ true copy ]

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