Counsel For The Petiticner: Sri Vijay Kumar Punna v. Prasad,Sc For Income Tax

[ [32e5 ]] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD(Special Original Jurisdiction)THURSDAY, THE FIRST DAY OF SEPTEMBERTWO THOUSAND AND TWENry TWO PRESENT THE HON'BLE THE CHIEF JUSTICE UJJAL BHUYANANDTHE HON'BLE SRI JUSTICE C.V. BHASKAR REDDY WRIT PETITION NO: 34193 OF 2022 Between: M/s. Chanda Anjaiah Parameshwar, HUF 3-4-461, General Bazar, Secunderabad-500 003, Telangana ...PETITIONER AND 1The Deputy Commissioner of lncome Tax, Circle 6(1), Aayakar Bhavan,Hyderabad-500004Hyderabad-5000042The Principal Commissioner of lncome Tax-1, 3rd Floor, Aayakar Bhavan,Basheerbagh, Hyderabao-500004Basheerbagh, Hyderabao-5000043The Union of lndia, Represented by its Secretary to the Government,Department of Revenue, Ministry of Finance, New Delhi - 110 001Department of Revenue, Ministry of Finance, New Delhi - 110 001 ...RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in thecircumstances stated in the affidavit filed therewith, the High Court may bepleased to issue an order or direction more particularly in the nature of writ ofcertiorari and mandamus declaring the notice dated 23.05.2022 issued undersection 148A(b) of the lncome-tax Act, 1961 as well as the Order dated30.07.2022 passed by the Assessing Officer under section ['148A(d) ]purported tohave been passed u/s 148A(b) and the consequential impugned noticedated 30.07.2022 issued under sectron ['148 ]of the Act proposing to reopen theassessment of the Petitioner, for the Assessment Year 2014-15, as arbitrary,illegal, bad in law, barred by limitaticn, violative of principles of natural [justice,]and without [jurisdiction, ]being contrary to [the ][provisions ]of the lncome Tax Act,1961 and consequently quash and annul the same in the interest of [justice.] lA NO: 1 OF 2022 Petition under Section 151 CPC praying that in the circumstances statedin the affidavit filed in support of the pelrtion, the High Court may be [pleased ]togrant stay of further proceedings, including any recovery, pursuant to the noticedated 30.07.2022, in DIN and Notice No. ITBA/AST/S/91/2022-2311044350188( 1), issued by Respondent No.1 u/s.148 for the Assessment Year2014-15 pending disposal of the marn writ petition. Counsel for the Petiticner: SRI VIJAY KUMAR PUNNA Counsel for the Respondent Nos.'l & 2: SRI J. V. PRASAD,SC FOR INCOME TAX Counsel for the Respondent No.3: Ms. B. KAVITHA YADAV The Court made the following: ORDER THE HON'BLE THE CHIEF JUSTICE UJJAL BIII'YANAND THE HON'BLE SRI JUSTICE C.V.BHASKAR REDDY WRIT PETITION No.34193 of 2022 ORDER: eet ttlc Hon'bte the chi{ Justicz Ujjat Btuyanl Heard Mr. Vijay Kumar Punna, learned counsel forthe petitioner; Mr. J.V.Prasad, learned Standing Counselfor Income Tax Department appearing for respondents No. 1ard 2; ald Ms. Sreemai, learned counsel appearing onbehaif of learned counsel Ms. B.Kavitha Yadav, learnedcounsel for respondent No.3. 2. By filing this writ petition under Article 226 of t}reConstitution of India, petitioner seeks quashing of noticedated 23.05.2022 issued by respondent No.l under Section148A(b) of the Income Tax Act, 196f priefly, 'the Act'hereinafter), for the assessment year 2014-15 as well asthe order dated 30.07.2022 passed by respondent No. 1under Section 148A(d) of the Act for the said assessmentyear 2014-15 3. It may be mentioned that petitioner is an assesseeunder the Act having the status of Hindu Undivided Family Heard Mr. Vijay Kumar Punna, learned counsel forthe petitioner; Mr. J.V.Prasad, learned Standing Counselfor Income Tax Department appearing for respondents No. 1ard 2; ald Ms. Sreemai, learned counsel appearing onbehaif of learned counsel Ms. B.Kavitha Yadav, learnedcounsel for respondent No.3. 2. By filing this writ petition under Article 226 of t}reConstitution of India, petitioner seeks quashing of noticedated 23.05.2022 issued by respondent No.l under Section148A(b) of the Income Tax Act, 196f priefly, 'the Act'hereinafter), for the assessment year 2014-15 as well asthe order dated 30.07.2022 passed by respondent No. 1under Section 148A(d) of the Act for the said assessmentyear 2014-15 3. It may be mentioned that petitioner is an assesseeunder the Act having the status of Hindu Undivided Family (HUF) carrl.ing on the business of trading in bullion andsilver. For the assessment year 2Ol4-15, petitioner wasassessed under Section 1a3(3) of the Act by respondentNo. 1 vide order dated 09.12.2016. It may be mentionedthat in the aforesaid assessment proceeding, petitioner hadfiled return of income at Rs.2,30,07,57O.OO, which wasassessed as the income of the petitioner by respondentNo. 1 vide the aforesaid order of assessment.silver. For the assessment year 2Ol4-15, petitioner wasassessed under Section 1a3(3) of the Act by respondentNo. 1 vide order dated 09.12.2016. It may be mentionedthat in the aforesaid assessment proceeding, petitioner hadfiled return of income at Rs.2,30,07,57O.OO, which wasassessed as the income of the petitioner by respondentNo. 1 vide the aforesaid order of assessment. 4. On 7O .06.2021 , notice was issued by respondentNo. 1 undt:r Section 148 of the Act.Following the decisionof the Supreme Colrrt in Unionof India v. AshishAgarwall, the aforesaid notice was construed to be a noticeunder Section 148A(b) of the Act which was reiterated bythe notice dated 23.O5.2022. As per the aforesaid notice, itwas alleged that as per information received, petitioner hadreceived credit of Rs.305.72 crores in his current accountduring the period from 06.02.2013 to 04.12.2O14 out ofwhich petitioner had received Rs.304.O5 crores in cash.The aforesaid credit was not disclosed by the petitioner inits income tax return. The same was also not disclosed during the assessment proceeding. Therefore, the entirecredit in the said current account has been treated asincome which had escaped assessment. Thus, there wasfailure on the part of the petitioner to disclose fully andtruly all material facts necessarlr for assessment for theassessment year 2Ol4-15. Accordingly, it was held that alamount of Rs.3O4.O5 crores chargeable to tax had escapedassessment in the assessment year 2Ol4-15. Petitionerwas required to show cause as to why an order underSection 148A(d) of the Act should not be passed as aprecursor for issuance of notice under Section 148 of theAct. 5. It is submitted that the petitioner had submitted adetailed reply explaining the above transaction andcontending that there was no suppression. Nonetheless,respondent No.1 passed the order dated 30.07.2O22 underSection 148A(d) of the Act holding that the cash deposit ofRs.304.O5 crores appears to be unexplained credit; there isreason to believe that an amount of Rs.304.05 croresescaped assessment within the meaning of Section 147 ofthe Act. After obtaining prior approval of the higher authority, respondent No.l held that it is a fit case forissuance of notice under Section 148 of the Act.Consequently, notice under Section 148 of the Act wasissued on 30.07.2022. 6. Learned counsel for the petitioner submits that replyof the petitioner dated 02.06.2022 was not considered byrespondent No. 1; additionally, as per the documents of therespondents themselves, the above transaction is underinvestigation. Investigation is not yet complete. Therefore,without conclusion of investigation, respondents ought notto have initiated reassessment proceedings. authority, respondent No.l held that it is a fit case forissuance of notice under Section 148 of the Act.Consequently, notice under Section 148 of the Act wasissued on 30.07.2022. 6. Learned counsel for the petitioner submits that replyof the petitioner dated 02.06.2022 was not considered byrespondent No. 1; additionally, as per the documents of therespondents themselves, the above transaction is underinvestigation. Investigation is not yet complete. Therefore,without conclusion of investigation, respondents ought notto have initiated reassessment proceedings. 7. We are unable to accept the above contentions of thepetitioner. On going through the order dated 3O.O7.2O22,we find that reply of the petitioner dated 02.06.2022 wasconsidered by respondent No. l, whereafter the same wasnot accepted holding the present case to be a fit one forissuance of notice under Section 148 of the Act. It washeld as follows: "The submissions of the assessee have beenconsidered. In the instant case, the assessee hasreceived the credits of Rs.305.72 crores in his currentaccount No.0O4805000611 between the period fromconsidered. In the instant case, the assessee hasreceived the credits of Rs.305.72 crores in his currentaccount No.0O4805000611 between the period from 06.02.2013 to O4.L2.2O14. Out of which he receivedRs.304.05 crores in cash. The assessee has notdisclosed this bank account in his ITR hled for the yearunder consideration i.e., 2013-14. The assessee hasasked at several instances in his reply to this office formaterials on which this ofiice has come to conclusionthat the amount o[ Rs.304.05 crores has escapedassessment. This information has already beenprovided to the assessee. Further, in this connection, itis pertinent to mention here the onus of providing andproving transactions are genuine, lies with ttre assesseeitsetf. The assessee has not submitted any detailsregarding from whom he has received the amount andfor what purpose, The assessee merely submitted he isa bullion trader, but he has not provided necessarydocuments to substantiate sale of bullion via cash. Inthis connection the cash deposits of Rs.3O4.05 croresappears to be unexplained credits, hence tl:ere is reasonto believe that an amount of Rs.304.O5 crores hasescaped assessment within the meaning of section 147of the I.T.Act. Hence, in light of the above facts, it is apparentthat the income of Rs.304.05 crores received hasescaped assessment within the meaning of Section 147of the I.T.Act. Therefore, it is a fit case for issue ofnotice u/s.148 ofthe I.T.Act, 1961." 8. We are at a stage of issuance of notice under Section148 of the Act. As a matter of fact, an order under Section148A(d) is on the point as to whether notice under Section148 of the Act is to be issued or not. At this stage I interference is to be avoided, unless there is a gross ormanifest error. That apart, petitioner would have themanifest error. That apart, petitioner would have theremedy of filing reply to the above show cause notice andthereafter contest the reassessment proceeding. If for arlythereafter contest the reassessment proceeding. If for arlyreason the reassessment proceeding results in an adverseorder, petitioner would have the remedy of ftling appealand thereafter further appeal, which is provided under theAct.and thereafter further appeal, which is provided under theAct. 9. Therefore, in the f;rcts and circumstances, we are notat all inclined to interdict the proceedings initiated by therespondents for reassessment at the threshold. 10. Writ petition is accordingly dismissed. Miscellaneous applications pending, if any, shal1 stand closec1. However, there shall be no order as to costs. so/- N. CHANDRA SEKHAR ASSISTANT BEqISTRARL'{h.-SECTION OFFICER //TRUE COPY// To, 1One CC to Sri Viiav Kumar [Punna, ][Advocate ] 2one CC to Sri J.'V Prasad, [for ][Income Tax ] 'lOne CC to Ms. B. [Kavitha ][Yadav ][Advocate ] 4Two CD CopiesGJGJP ,\-- HIGH COURT DATED:01 10912022 ORDER WP.No.34193 of 2022 9. Therefore, in the f;rcts and circumstances, we are notat all inclined to interdict the proceedings initiated by therespondents for reassessment at the threshold. 10. Writ petition is accordingly dismissed. Miscellaneous applications pending, if any, shal1 stand closec1. However, there shall be no order as to costs. so/- N. CHANDRA SEKHAR ASSISTANT BEqISTRARL'{h.-SECTION OFFICER //TRUE COPY// To, 1One CC to Sri Viiav Kumar [Punna, ][Advocate ] 2one CC to Sri J.'V Prasad, [for ][Income Tax ] 'lOne CC to Ms. B. [Kavitha ][Yadav ][Advocate ] 4Two CD CopiesGJGJP ,\-- HIGH COURT DATED:01 10912022 ORDER WP.No.34193 of 2022 DISMISSING THE WRIT PETITIONWITHOUT COSTS (P,R,,@t'N1O[pr] l [iiE ][.r ][r-:q][ i^],ct?I(-)23JllrlunoA1!'*-.'i../r,