HOOTAGALLY SHIVANNA CHANDRIKA vs. THE ASSESSING OFFICER

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WP/14504/2024HC KarnatakaKAHC01026371202425 June 2024Bench: S SUNIL DUTT YADAV5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court set aside the Assessment Order dated March 17, 2024 (Annexure-'J'). The Court found it appropriate to relegate the matter for reconsideration by the Assessing Officer concerning the amount of Rs. 3,25,61,315/- treated as unexplained investment. This decision was influenced by the fact that while the assessment order treated the amount as time deposit without explanation, The Mysore & Chamarajanagar Bank issued a clarification on April 4, 2024, stating that the amount reflected in the petitioner's records was deleted data and an error. The Court emphasized that the petitioner must avail of this opportunity for reconsideration. All contentions were kept open. The petition was disposed of accordingly.

What were the facts?

The petitioner, Hootagally Shivanna Chandrika, filed a writ petition challenging an Assessment Order dated March 17, 2024, passed by the Assessing Officer, Ward-1 and TPS, Mandya. The Assessing Officer treated an amount of Rs. 3,25,61,315/- as 'unexplained investment' under Section 69 of the Income Tax Act, 1961, citing the petitioner's failure to provide confirmation from The Mysore & Chamarajanagar District Co-operative Central Bank Ltd. regarding time deposits. The petitioner contended that this amount was an incorrect entry and that the Bank subsequently clarified this error on April 4, 2024, after the assessment order was passed. The petitioner sought to set aside the order and be granted an opportunity to submit documents and explanations.

What were the issues?

1. Whether the Assessment Order dated March 17, 2024, treating Rs. 3,25,61,315/- as unexplained investment under Section 69 of the Income Tax Act, 1961, is erroneous, considering a subsequent clarification from the Bank? Assessee's Contentions: The petitioner argued that the amount of Rs. 3,25,61,315/- was an incorrect entry in the records. The petitioner had sought clarification from The Mysore & Chamarajanagar District Co-operative Central Bank Ltd. Subsequently, on April 4, 2024, the Bank issued a communication to the Income Tax Officer stating that the amount was an incorrect figure and that deleted data was wrongly shown in the customer's records. Therefore, the petitioner requested that the Assessment Order be set aside and the matter be remanded for fresh consideration with an opportunity of hearing. Revenue's Contentions: The Revenue contended that sufficient opportunity was granted to the petitioner, and the petitioner failed to produce the clarification within the prescribed time. The clarification was being sought to be produced at a belated stage.

Which sections of the Income-tax Act were involved?

Section 69

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:23398 WP No. 14504 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF JUNE, 2024 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 14504 OF 2024 (T-IT) BETWEEN: 1. HOOTAGALLY SHIVANNA CHANDRIKA AGED ABOUT 39 YEARS, D/O SHIVANNA S, R/AT NO.218-1 MARIGUDI ROAD HOOTAGALLY, BELAVADI POST, MYSORE TALUK MYSORE - 570 018 … PETITIONER (BY SRI. MAHESHCHANDRA B N., ADVOCATE) AND: 1. THE ASSESSING OFFICER DEPARTMENT OF INCOME TAX WARD - 1 AND TPS MANDYA - 571 401 … RESPONDENT (BY SRI. M. THIRUMALESH., ADVOCATE)

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO SET ASIDE THE ORDER PASSED BY THE RESPONDENT ON 17.03.2024 PRODUCED AT ANNEXURE-J AND ETC.

THIS PETITION COMING ON FOR PRELIMINARY HEARING THIS DAY, THE COURT MADE THE FOLLOWING: Digitally signed by VIDYA G R Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:23398 WP No. 14504 of 2024 ORDER The petitioner has called in question the correctness of the Assessment Order at Annexure-'J' dated 17.03.2024 and has sought for an opportunity to appear and submit documents alongwith an explanation as regards the show cause notice issued. 2. It is the contention of the petitioner that the Department has treated an amount of Rs.3,25,61,315/- as 'unexplained investment' under Section 69 of the Income Tax Act, 1961, while observing that the assessee has failed to furnish either confirmation from The Mysore & Chamarajanagar District Co-operative Central Bank Ltd., in respect of wrong entry or other documentary evidence in support of the contention that the amount was kept in time deposits. 3. Learned counsel for the petitioner submits that insofar as the amount referred to hereinabove, i.e. Rs.3,25,61,315/-, the petitioner had sought for a clarification from The Mysore & Chamarajanagar District

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NC: 2024:KHC:23398 WP No. 14504 of 2024 Co-operative Central Bank Ltd., as the said amount was incorrect amount that was shown in the records. 4. It is further submitted that the Assessment Order came to be passed on 17.03.2024, but on 04.04.2024, as regards the very same amount referred to hereinabove, which was treated as 'unexplained investment', The Mysore & Chamarajanagar District Co-operative Central Bank Ltd., has addressed a communication to the Income Tax Officer, Ward1 & TPS, Mandya pointing out that the amount was incorrect figure and in the records of the customer, the deleted data was shown wrongly. 5. Accordingly, it is submitted that the petitioner being primarily aggrieved by the order of Department treating a sum of Rs.3,25,61,315/- as 'unexplained investment', requires to be set aside and the matter be remanded for fresh consideration, while affording an opportunity of hearing to the petitioner.

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NC: 2024:KHC:23398 WP No. 14504 of 2024 6. Learned counsel appearing for the Revenue submits that sufficient opportunity is granted to the petitioner and within the prescribed time, the petitioner has not produced the clarification, which she now seeks to produce at a belated stage. 7. However, taking note that the Assessment Order treats the amount of Rs.3,25,61,315/- as time deposit without any explanation regarding the source and as regards the very same amount, The Mysore Chamarajanagar Bank has issued a clarification on 04.04.2024 that the amount reflected in the records of the petitioner was deleted data and was an error, it would meet the ends of justice, if the matter is relegated to the respondent Authorities for reconsideration as regards the amount of Rs.3,25,61,315/- shown as unexplained investment. 8. Accordingly, the order at Annexure-'J' dated 17.03.2024 is set aside. The matter is relegated for fresh consideration before the Assessing Officer as regards the

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NC: 2024:KHC:23398 WP No. 14504 of 2024 amount of Rs.3,25,61,315/- shown as unexplained investment. However, it is made clear that the petitioner is to avail of the said opportunity. All contentions are kept open. Accordingly, the petition is disposed off. Sd/- JUDGE VGR

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