ASHOK KUMAR DAMANI vs. UNION OF INDIA AND ORS.

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WPA/7593/2022HC CalcuttaWBCHCA015936202210 May 2022Bench: HON'BLE JUSTICE MD. NIZAMUDDIN3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, considering the petitioner's contention that the alleged transaction of Rs. 7,88,73,000/- for FY 2014-15 never took place and the fact that the assessing officer could not verify this transaction, remanded the matter back to the assessing officer. The purpose of the remand is for the assessing officer to reconsider the aforesaid transaction of Rs. 7,88,73,000/-. The petitioner is to be given an opportunity of hearing and to produce relevant records in support of his case. After considering these records, the assessing officer shall take a decision on this limited issue before proceeding with any further assessment proceedings. This decision is to be taken within eight weeks from the date of communication of the order. The assessing officer is also directed to observe the principles of natural justice while considering this limited issue. The writ petition stands disposed of with these observations and directions.

What were the facts?

The petitioner, Ashok Kumar Damani, challenged an order dated March 31, 2022, passed under clause (d) of section 148A of the Income Tax Act, 1961. The impugned order, which was passed with the prior approval of the Principal Chief Commissioner of Income Tax, West Bengal & Sikkim, deemed the petitioner's case fit for issuing a notice under section 148 of the Act for Assessment Year 2015-16. This decision was based on information regarding a transaction of Rs. 7,88,73,000/- during FY 2014-15. The petitioner contended that this transaction never took place and was not recorded in his books. The assessing officer acknowledged that this fact was not verifiable and that the petitioner denied the transaction.

What were the issues?

1. Whether the assessing officer erred in deeming the case fit for issuance of notice under section 148 of the Income Tax Act, 1961, for AY 2015-16, based on an alleged transaction of Rs. 7,88,73,000/- in FY 2014-15, which the petitioner denies and the AO could not verify. Assessee's Contention: The petitioner argued that the alleged transaction of Rs. 7,88,73,000/- for FY 2014-15 never occurred and was not reflected in his books. He further contended that the assessing officer himself was unable to verify this transaction from any relevant documents. Revenue's Contention: The revenue, through the impugned order, stated that the assessee denied the transaction, and this fact was not verifiable. Therefore, the assessee's contention was not accepted, and the case was deemed fit for issuing a notice under section 148.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148

AI-generated summary — verify with the full judgment below

10-05-2022 Item No.40 Subrata IN THE HIGH COURT AT CALCUTTA Constitutional Writ Jurisdiction Appellate Side WPA No.7593 of 2022 Ashok Kumar Damani -vs- Union of India & Ors. Mr. Abhrotosh Majumder, sr. adv. Mr. Avra Mazumder, adv. Sk. Md. Bilwal Hossain, adv. Mr. Kausheyo Roy, adv. Mr. Binayak Gupta, adv. …for the petitioner Mr. Aryak Dutt, adv. …for the Union of India Heard learned advocates appearing for the respective parties. Petitioner in this writ petition has challenged the impugned order dated March 31, 2022 (Annexure P6/p.93) passed under clause (d) of section 148A of the Income Tax Act, 1961, particularly being aggrieved by the last paragraph of the aforesaid impugned order which is quoted below:– “However, in so far second part of the information is concerned, the assessee is denying to have made any transactions to the tune of Rs.7,88,73,000/- during the FY - 2014-15. According to the assessee there is no transaction in the books of the assessee. This fact is not verifiable. Therefore, contention of the assessee is not accepted. In the light of the above facts and on the basis of material available on record, it is deemed that the case of ASHOKE KUMAR DAMANI PAN: ACXPD6089R is a fit case for issuance of notice u/s 148 of the Act for A.Y. 2015-16. This order is passed with the prior approval of the Principal Chief Commissioner of Income Tax, West Bengal & Sikkim, which was granted vide Reference No.-100000029533991 dated 17/03/2022.” Considering the contention of the petitioner that the alleged transaction relating to the FY 2014-15, as referred to in the aforesaid last paragraph of the impugned order, never

2 took place and in view of the fact that the assessing officer concerned himself has not been able to verify the aforesaid transaction from any relevant documents, the matter is remanded back to the assessing officer concerned for a limited purpose of reconsidering the aforesaid transaction of Rs.7,88,73,000/- by giving an opportunity of hearing to the petitioner and to produce the relevant records; and after considering the relevant records to be produced by the petitioner before the assessing officer concerned in support of his case, the assessing officer shall take a decision on the same before proceeding with any further assessment proceeding, within eight weeks from the date of communication of this order. Needless to mention that the assessing officer, while considering the aforesaid limited issue, will observe the principles of natural justice. With the above observations and directions, WPA No.7593 of 2022 stands disposed of. [Md. Nizamuddin, J]

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