Bijendra Singh Son Of Shri Nandram, Resident Of v. Income Tax Officer, Ward 1(1), Alwar

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 3466/2023 Bijendra Singh Son Of Shri Nandram, Resident Of 32, ManuMarg, Alwar 301001. ----Petitioner Versus Income Tax Officer, Ward 1(1), Alwar Having Its Address AtCentral Revenue Building, Moti Doongri Road, Alwar, 301001. ----Respondent For Petitioner(s) : Mr. Siddharth Ranka with Ms. Shivangi Mewal.Ms. Shivangi Mewal.For Respondent(s): Mr. Anuroop Singhi with Mr. N.S. Bhati and Mr. N.S. Bhati and Mr. Aditya Khandelwal. HON'BLE MR. JUSTICE ARUN BHANSALI HON'BLE MR. JUSTICE ASHUTOSH KUMAR Order 04/01/2024 1.This writ petition has been filed by the petitioner aggrievedof the order dated 31.03.2022 passed under Section 148A(d) ofthe Income Tax Act, 1961 (‘the Act of 1961’), the notice dated31.03.2022 issued under Section 148 of the Act of 1961 andconsequential assessment order dated 27.03.2023 passed for theassessment year 2015-16. 2.It is inter-alia indicated that the petitioner was issued anotice under Section 148A(b) of the Act of 1961 inter-aliaindicating that the information annexed with the notice suggestthat income chargeable to tax for the assessment year 2015-16has escaped assessment under the meaning of Section 147 of theAct of 1961. 3.The annexure to the notice disclosing information inter-aliaindicated that the petitioner had deposited cash of Rs.10,00,000/-or more in the same bank account amounting to Rs.33,62,000/-.It was further indicated that cash amounting to Rs.2,00,000/- ormore was deposited to the tune of Rs.26,13,000/- during the saidassessment year in Punjab National Bank. 4.The petitioner filed reply to the show cause notice(Annexure-2) inter-alia indicating that during the year 2015-16, asum of Rs.33,62,000/- was deposited in cash and notRs.59,75,000/- and as the amount was less than Rs.50,00,000/-,the extended period of limitation available under Section 149(1)(b) of the Act of 1961 was not available and therefore, theproceedings be dropped. 5.The assessee also enclosed the statements of account of hisbank accounts indicating the said cash transactions. The AssessingAuthority passed the order under Section 148A(d) of the Act on31.03.2022 (Annexure-3) inter-alia rejecting the contentions ofthe petitioner and found the same to be a fit case for issuance ofnotice under Section 148 of the Act of 1961. A notice underSection 148 of the Act of 1961 (Annexure-4) was issued on thesame day. 6.Pursuant to the said notice, the assessment proceeded andon 06.03.2023 (Annexure-4A) after considering the submissionsmade, the authority show caused the petitioner indicating thatwhy the cash deposited to the tune of Rs.33,62,000/- in the bankbe not treated as unexplained money of the assessee and he was asked to show cause under Section 69A read with Section 115BBEof the Act of 1961. 7.To which show cause notice, a response was filed by thepetitioner, which ultimately resulted in passing of the assessmentorder dated 27.03.2023 (Annexure-4C) by the AssessingAuthority. 8.The petitioner raised objections about maintainability of theproceedings relying on judgement in Abdul Majeed vs. ITO: CWPNo.7853/2022, decided on 29.06.2022 by this Court. However, theauthority indicating lack of jurisdiction to question the validity ofthe proceedings under Section 148A of the Act of 1961, refused todrop the proceedings and consequently determined the income ofthe petitioner at Rs.15,18,900/-. 9.Though, initially petition was filed questioning the validity ofthe order passed under Section 148A(d) of the Act of 1961.However, as assessment order under Section 148 of the Act of1961 was passed during pendency of the petition, the petition waspermitted to be amended qua the said orders to be questioned bythe petitioner. 8.The petitioner raised objections about maintainability of theproceedings relying on judgement in Abdul Majeed vs. ITO: CWPNo.7853/2022, decided on 29.06.2022 by this Court. However, theauthority indicating lack of jurisdiction to question the validity ofthe proceedings under Section 148A of the Act of 1961, refused todrop the proceedings and consequently determined the income ofthe petitioner at Rs.15,18,900/-. 9.Though, initially petition was filed questioning the validity ofthe order passed under Section 148A(d) of the Act of 1961.However, as assessment order under Section 148 of the Act of1961 was passed during pendency of the petition, the petition waspermitted to be amended qua the said orders to be questioned bythe petitioner. 10.Learned counsel for the petitioner made submissions that theshow cause notice was issued on the premise that the cashtransactions of the petitioner were about Rs.50,00,000/- andextended period of limitation was invoked. However, as admittedly,it was found that the transactions were only of Rs.33,62,000/-,the issuance of notice itself is wholly without jurisdiction beingbarred by limitation and the authority while passing the orderunder Section 148(d) of the Act of 1961 could not have found it a fit case for issuance of notice under Section 148 of the Act of1961. 11.Further submissions have been made that the trigger for thepurpose of initiating the proceedings against the petitioner hasbeen alleged unexplained money deposited and the notice wasissued under Section 148A of the Act of 1961 and during thoseproceedings the issuance of show cause notice purportedly underSection 69A read with Section 115BBE of the Act of 1961 is whollybaseless as independent of Section 148A of the Act of 1961 thepowers could not have been invoked by the authorities and,therefore, the entire exercise of issuance of notice under Section148A of the Act of 1961 upto passing of the assessment orderunder Section 148 of the Act of 1961, deserves to be quashed andset aside. 12.Reliance has been placed on judgement passed in the case ofAbdul Majeed (supra). 13.Learned counsel appearing for the respondent madesubmissions that once the order of the assessment was issued,the petitioner is to avail the alternate remedy. However,submissions have been made that it has been found as a fact thatthe petitioner could not explain cash transactions to the tune ofRs.15,00,000/- and therefore, no case for interference is madeout. However, it is not denied, based on the orders passed by theauthorities, that the cash transactions were amounting toRs.33,62,000/- only. 14.We have considered the submissions made by learnedcounsel for the parties and perused the material available onrecord. 15.The facts are not in dispute, wherein, the notice underSection 148A of the Act of 1961 for assessment year 2015-16 wasissued on 17.03.2022 i.e. by revoking the extended period oflimitation purportedly on the ground that the cash transactionswere amounting to Rs.59,75,000/-. 16.The petitioner promptly responded to the said notice byspecifically indicating that the sum of cash transactions wasRs.33,62,000/- only i.e. less than Rs.50,00,000/- and as thenotice was issued after three years from the assessment year, thesame was barred by limitation. 17.The order under Section 148A(d) of the Act of 1961, on the said aspect reads as under: 15.The facts are not in dispute, wherein, the notice underSection 148A of the Act of 1961 for assessment year 2015-16 wasissued on 17.03.2022 i.e. by revoking the extended period oflimitation purportedly on the ground that the cash transactionswere amounting to Rs.59,75,000/-. 16.The petitioner promptly responded to the said notice byspecifically indicating that the sum of cash transactions wasRs.33,62,000/- only i.e. less than Rs.50,00,000/- and as thenotice was issued after three years from the assessment year, thesame was barred by limitation. 17.The order under Section 148A(d) of the Act of 1961, on the said aspect reads as under: “As per the specific information assessee depositedcash of Rs. 26,13,000/- and 33,62,000/- in PunjabNational Bank. As per specific information assesseeis cash deposit of Rs. 26,13,000/- in PunjabNational Bank, above information uploaded byTAN(JPR02089D) and assessee is also cash depositof Rs. 33,62,000/- in Punjab National Bank aboveinformation uploaded by TAN(DELP09943D) As perreply filed by assessee and material available onrecord assessee total amount deposited in cash orRs. 59,75,000 during the financial year 2014-15.Therefore, total income of Rs. 59,75,000 left fromescape the assessment for assessment year2015-16. Thus it is logical to conclude that theassessee has no proper explanation with respect tothe above mentioned escapement of income in hiscase for AY 2015-16.” 18.A perusal of the above would reveal that the authoritydespite the specific indications made by the petitioner, withoutapplication of mind and in a wholly mechanical manner came to the conclusion that the amount deposited in cash wasRs.59,75,000/- and consequently, found it a fit case under section148 of the Act of 1961. 19.During the pendency of assessment proceedings pursuant tonotice under Section 148 of the Act of 1961, a show cause noticedated 06.03.2023 (Annexure-4A) was issued to the petitionerinter-alia observing as under: “Thus in the light of the above reasons, you areshowcaused as to why the cash deposited to thetune of Rs. 33,62,000 in the Bank shouldn’t betreated as unexplained money of the assesseeunder section 69Arws115BBE of the IT Act andtaxed accordingly as assessee has failed to disclosewith documentary evidence the source of the cashdeposited in the bank account 261800010002577in PNB.” (emphasis supplied) 20.It would seem that the assessing authority accepted the pleaof the petitioner regarding the cash deposits of Rs.33,62,000/-only. However, choose to issue a show cause notice purportedlyunder Section 69A read with Section 115BBE of the Act of 1961 tothe petitioner, to which the petitioner filed response and raisedobjections about the jurisdiction to proceed further in thematter/issue show cause notice during pendency of theproceedings under Section 148 of the Act of 1961. 21.However, the assessment order dated 27.03.2023(Annexure-4C) was issued, wherein, the authority on the law citedby the petitioner in the case of Abdul Majeed (supra) observedthat he had no jurisdiction to come to a conclusion based on thesaid judgement and determined the total income asRs.15,18,900/-. 22.From the above it is apparent that though the notice wasissued on the assumption that the cash deposits wereRs.59,75,000/- by invoking extended period of limitation, as afact, it was found that the same was Rs.33,62,000/- only andonce, the said aspect was clear to the authority, the authority lostits jurisdiction to further continue with the proceedings as thelimitation under Section 149(1)(a) of the Act of 1961 of threeyears would trigger and the authority would lose the jurisdictionon account of limitation, as the amount was less thanRs.50,00,000/-. 22.From the above it is apparent that though the notice wasissued on the assumption that the cash deposits wereRs.59,75,000/- by invoking extended period of limitation, as afact, it was found that the same was Rs.33,62,000/- only andonce, the said aspect was clear to the authority, the authority lostits jurisdiction to further continue with the proceedings as thelimitation under Section 149(1)(a) of the Act of 1961 of threeyears would trigger and the authority would lose the jurisdictionon account of limitation, as the amount was less thanRs.50,00,000/-. 23.However, the authority while passing the order under Section148A(d) of the Act of 1961, in a wholly mechanical mannerrejected the plea and proceeded to issue notice under Section 148of the Act of 1961. Whereafter, proceedings were sought to beconverted into notice under Section 69A read with Section 115BBE of the Act of 1961, which action also is wholly impermissible.Once the notice under Section 148A of the Act of 1961 is found tobe barred by limitation, no further proceedings could be initiatedunder any of the provisions of the Act of 1961 and the purportedexercise of jurisdiction pursuant to notice under Section 148A ofthe Act of 1961 could not be initiated or proceeded with. 24.A Co-ordinate Bench of this Court in the case of AbdulMajeed (supra) inter-alia laid down as under: “On conjoint reading of the provisions contained inSection 148A of the Act and what has been providedunder Section 149 of the Act, it is vividly clear thatin order to initiate proceedings under Section 148Aof the Act, it is not enough that in case where noticeis proposed to be issued under Section 148 of theAct after three years have elapsed from the end ofSection 148A of the Act and what has been providedunder Section 149 of the Act, it is vividly clear thatin order to initiate proceedings under Section 148Aof the Act, it is not enough that in case where noticeis proposed to be issued under Section 148 of theAct after three years have elapsed from the end of the relevant assessment year that there shouldexist material available on record to reach toconclusion that some income chargeable to tax hasescaped assessment, but the amount should bemore than Rs.50,00,000/-. Only on the basis thatthe cash deposits of Rs.19,39,000/- chargeable totax have escaped assessment, without anythingmore, the authority was not justified in jumping tothe conclusion that the assessee may have morebank accounts. If such an interpretation is placed onthe provision of Section 148A(d) of the Act withreference to expression ‘material available onrecord’, then in that case, it will open flood gate andeven without availability of any material, theauthority would be initiating proceedings underSection 148 of the Act, which will completelyfrustrate the object of incorporation of Section 148Ain the Act. It is well settled principle ofinterpretation that the taxing statute is required tobe construed strictly. The interpretation as has beensuggested by the learned counsel for the revenuecannot be placed upon the expression ‘materialavailable on record’ to include possibility ofcollection of any relevant or tangible material foropening of proceedings under Section 148A of theAct.” 25.In view of above discussion and following the dictum of thisCourt in case of Abdul Majeed (supra), the action of therespondent being barred by limitation cannot be sustained.26. Consequently, the writ petition filed by the petitioner isallowed. The show cause notice dated 17.03.2022 issued underSection 148A(b) of the Act of 1961 (Annexure-1) and allconsequential proceedings and assessment order are quashed andset aside. (ASHUTOSH KUMAR),J(ARUN BHANSALI),J MADAN/59