P.durai v. Income Tax Officer,Ward-1,Villupuram

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 13.06.2019 CORAM THE HONOURABLE MR.JUSTICE M.SUNDAR W.P.No.7707 of 2019and W.M.P.No.8347 & 8383 of 2019 P.Durai ...Petitioner ..Vs.. Income Tax Officer,Ward-1,Villupuram,No.1, chairman Subbarayar Street,West Shanmugapuram,Villupuram-605 602. ...Respondent Prayer: Writ petition filed under Article 226 of theConstitution of India to issue a Writ of certiorarifiedmandamus, to call for the records made in Assessment order dated22.12.2018 passed by the respondent and quash the same andpermit the petitioner to submit his explanation. For Petitioner : Mr.T.N.Rajagopalan For Respondent : Mr.A.N.R.Jayaprathap Learned Junior Standing Counsel (IT) O R D E R Mr.T.N.Rajagopalan, learned counsel on record for writpetitioner and Mr.A.N.R.Jayapratap, learned Junior StandingCounsel (Income Tax) on behalf of sole respondent are beforethis Court. 2. With the consent of both learned counsel, the main writpetition itself is taken up, heard out and disposed of. 3. The entire writ petition turns on a very narrow compass. 4. It arises under 'Income Tax Act, 1961' ('IT Act' for https://hcservices.ecourts.gov.in/hcservices/ brevity). 5. The relevant assessment year is 2011-2012. 6. This is a case where the writ petitioner is an individualand though he had obtained a Permanent Account Number (PAN), thewrit petitioner had not filed returns or paid tax at any pointof time. 7. This Court is informed that the writ petitioner is in asmall hamlet and was running a small grocery shop. 8. On gaining the information that the writ petitioner hasmade several cash deposits in his savings Bank Account, therespondent initiated proceedings. In response to notice issuedby the respondent, the writ petitioner had sent a reply dated21.03.2018, wherein the writ petitioner has submitted that hewas doing provision store business (Grocery Shop) upto thefinancial year 2009-2010. After closure of business, he haddeposited certain amounts in bank by way of cash and also FixedDeposits. The money is realized from the sale of small groceryshop and also from sundry debtors, besides capital from theclosed business. This is articulated in paragraph-4 of thecounter affidavit filed by the respondent and the same reads asfollows:''4.Inresponsetotheabovecommunication, the assessee furnished hisreplay which was received by the AO on21.03.2018. The assessee stated that ''I wasdoing provision store business upto thefinancial year 2009-2010. After the closure ofbusiness, I have deposited in bank bycash/fixed deposits, in the bank account of myrealization of sundry debtors and capital inthe closed business''. The assessee furtherinformed that he had no taxable income.However, the assessee did not produce anydocumentary evidences towards his above claim." 9. Ultimately, the respondent passed an assessment orderinter alia under Section 144 read with Section 147 of IT Act.This assessment order is dated 22.12.2018. From this assessmentorder, the Income Tax Officer assessed the income of the writpetitioner for the relevant assessment year i.e. 2011-2012 atRs. 27,31,370/- and demanded tax payable at Rs.14,12,880/-. Thecalculation sheet was also enclosed to that order. 10. What is of importance was, after the response of the https://hcservices.ecourts.gov.in/hcservices/ writ petitioner dated 21.03.2018, the writ petitioner did not gobefore the respondent and submit any document, in spite ofrepeated opportunities being given. This has been set out in theimpugned assessment order itself. 9. Ultimately, the respondent passed an assessment orderinter alia under Section 144 read with Section 147 of IT Act.This assessment order is dated 22.12.2018. From this assessmentorder, the Income Tax Officer assessed the income of the writpetitioner for the relevant assessment year i.e. 2011-2012 atRs. 27,31,370/- and demanded tax payable at Rs.14,12,880/-. Thecalculation sheet was also enclosed to that order. 10. What is of importance was, after the response of the https://hcservices.ecourts.gov.in/hcservices/ writ petitioner dated 21.03.2018, the writ petitioner did not gobefore the respondent and submit any document, in spite ofrepeated opportunities being given. This has been set out in theimpugned assessment order itself. 11. However, from the files, it is seen that since noresponse was received by the writ petitioner assessee to thenotice under Section 148 of IT Act, Assessing Officer issuednotice dated 26.04.2016 under Section 142(1) of IT Act seekingproduction of evidences relating to the deposits made with thebanks, but the same was unserved and returned with postalendorsement 'door locked'. 12. It is in this factual backdrop, the learned counsel forthe writ petitioner draws the attention of this Court toparagraph 3 of the writ affidavit and makes a fervent plea thatit would be an appropriate case to grant one more opportunity tothe writ petitioner to go before the Assessing Officer alongwith his Charted Accountant and submit all relevant particulars. 13. To be noted, as already mentioned supra, the cashdeposits made by the writ petitioner is not in dispute.Therefore, all that the writ petitioner can now explain to therespondent is that either his income is exempt from tax or thatit was not the income received in one assessment year. 14. Learned counsel for writ petitioner submits that thewrit petitioner has studied only upto Grade-V. Attention ofthis Court was drawn to Paragraph-3 of the affidavit filed insupport of this writ petition, which reads as follows: ''3. I state that my mother died when I wasyoung and my father married second time and we weretaken care of by our step-mother. In the month ofMarch 2018, I was served with a notice by the IncomeTax authorities. At that time as my step-mother wasill and frequently admitted in hospital andultimately she died in the month of July 2018. At thesame time, my wife is also a patient and wassuffering from severe thyroid problems. My son who isresiding at Chennai and working was married in theyear 2012 and his wife had health issue and she wasunder treatment. In the month of March 2018, sheconceived. Since there was nobody to look after themat Chennai, we had to frequently travel and stayed atChennai both for the treatment of my wife and that ofmy daughter-in-law. At the same time, I had to lookafter my ailing step-mother. Due to heavy tension andmy lack of education and knowledge and my villageupbring, I did not have any knowledge about the procedures, I did not take any steps in view of thefirst notice. It seems that subsequently otherproceedings were continued but was not served on me,because of our absence in the house, it seems it wasreturned unserved.'' 15. The learned Revenue counsel submits that as the cashdeposits are not disputed, there is very little scope for thewrit petitioner to give any explanation. 16. However, as already alluded to supra, the issues, as towhether the income is exempt from tax and as to whether he hadearned it in one assessment year, have to be gone into. 17. In any event, the predicament which the writ petitionerhas undergone has been articulated in paragraph-3 of the writaffidavit and the same is not disputed. 18. In the light of the aforesaid scenario, this Court is ofthe view that as an exceptional case, one opportunity can begiven to the writ petitioner and therefore the following orderis passed: 15. The learned Revenue counsel submits that as the cashdeposits are not disputed, there is very little scope for thewrit petitioner to give any explanation. 16. However, as already alluded to supra, the issues, as towhether the income is exempt from tax and as to whether he hadearned it in one assessment year, have to be gone into. 17. In any event, the predicament which the writ petitionerhas undergone has been articulated in paragraph-3 of the writaffidavit and the same is not disputed. 18. In the light of the aforesaid scenario, this Court is ofthe view that as an exceptional case, one opportunity can begiven to the writ petitioner and therefore the following orderis passed: a) impugned assessment order made by the solerespondent dated 22.12.2018 is set aside withoutexpressing any opinion on merits. It is also made clearthat the order is being set aside only for the purpose ofgiving an opportunity to the writ petitioner to give hisexplanation; b) Learned counsel for the writ petitioner submits,on instructions, that the writ petitioner will go beforethe respondent on 01.07.2019, Monday, at 12 noon, alongwith his Chartered Accountant and supporting documents.It is open to the writ petitioner to submit anyexplanation that he may have; c) The writ petitioner shall not seek anyadjournment or rescheduling and if the writ petitionerdoes not appear on 01.07.2019, the impugned order whichhas been set aside will stand revived. The writpetitioner will also not seek further hearings beyond01.07.2019; d) When the writ petitioner appears on 01.07.2019and gives explanation, the respondent shall redo theassessment and pass an order afresh within a fortnighttherefrom i.e. by 15.07.2019 and such order shall beserved on the writ petitioner in a manner known to lawand such order shall be communicated to the writ petitioner under due acknowledgment. 19. This writ petition is disposed of with the abovedirections. There shall no order as to costs. W.M.P. is alsoclosed. Sd/- Assistant Registrar //True Copy// rliTo Sub Assistant Registrar Income Tax Officer,Ward-1,Villupuram,No.1, chairman Subbarayar Street,West Shanmugapuram,Villupuram-605 602.+1 cc to Mr.T.N.Rajagopalan, Advocate, Sr.No. 48697+1 cc to Mr.A.P.Srinivas, Senior Standing counsel for IT, Sr.No.48805W.P.No.7707 of 2019and W.M.P.No.8347 & 8383 of 2019CSL/02.07.2019 https://hcservices.ecourts.gov.in/hcservices/