Pravin Kumar, Son Of Shri Ramashraya Chaurasia, Resident Of Ward v. Assessment Unit, Income Tax Department

IN THE HIGH COURT OF JUDICATURE AT PATNACivil Writ Jurisdiction Case No.16564 of 2024 ====================================================== Pravin Kumar, Son of Shri Ramashraya Chaurasia, Resident of Ward No. 5,Kothiya, Tajpur, Samastipur, Bihar-848122. ... ... Petitioner Versus 1.Assessment Unit, Income Tax Department having its office at 2[nd] Floor, E-Ramp, Jawaharlal Nehru Stadium, New Delhi - 110 003.Ramp, Jawaharlal Nehru Stadium, New Delhi - 110 003. 2.Central Bank of India, Kothia Bazar (1798), Vill. and Post - Kothia, DistrictSamastipur, Bihar – 848122.Samastipur, Bihar – 848122. 3Synapse Solutions (P) Ltd. (SSPL) ... ... Respondents ======================================================Appearance :For the Petitioner: Mr. D.V.Pathy, Senior Advocate Mr. Sadashiv Tiwari, Advocate Mr. Hiresh Karan, Advocate Ms. Shivani Dewalla, AdvocateFor the Resp No. 1: Ms. Archana Sinha @ Archana Shahi, Senior SC Mr. Alok Kumar Shahi, Advocate Mr. Shubham Shankar, AdvocateFor the Bank: Mr. Prabhakar Jha, Advocate Mr. Amitesh Jha, Advocate ====================================================== CORAM: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD and and HONOURABLE MR. JUSTICE ASHOK KUMAR PANDEYORAL ORDER (Per: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD)617-04-2025Heard Mr. D.V. Pathy, learned Senior Counsel for the Heard Mr. D.V. Pathy, learned Senior Counsel for the petitioner, Mr. Prabhakar Jha, learned counsel for the CentralBank of India (in short ‘Bank’) and Ms. Archana Sinha, learnedSenior Standing Counsel for the Department of Income Tax. 2. The petitioner in the present writ application isseeking the following reliefs:- “(i) the ex parte order dated 13.03.2024(as contained in Annexure-P 4 Series)passed by the respondent no. 1 undersection 144 read with section 144B the Income Tax Act, 1961 (hereinafter calledthe Act) for the Assessment Year 2022-23subjecting the deposits received on behalfof the Central Bank of India as its CSPagent and remitted to the bank and notforming part of his income liable to taxunder the Act only on the basis ofdeposits mentioned in the certificate ordeduction of tax at source in isolationwithout considering the correspondingwithdrawals mentioned in the samecertificate and in contravention of thescheme of faceless assessmentcontemplated in section 144B of the Actbe set-aside and quashed. (ii) for granting any other relief(s) towhich the petitioner is otherwise foundentitled to.” 3. The brief facts of the case as disclosed in the writpetition are as under:- The petitioner is an individual who is engaged in thebusiness of a commission agent for the Central Bank of India.He entered into a tripartite agreement with the Bank and itsprincipal agent Synapse Solutions (P) Ltd. to facilitate bankingin the rural areas among the rural masses. Copy of the tripartiteagreement dated 20.12.2021 has been brought on record asAnnexure-P1 series. 4. The petitioner claims that he filed his income tax return for the assessment year 2022-23 showing a total incomeof Rs.3,81,094/- from commission received from the Bank. Hepaid taxes thereon. It is his submission that while makingpayment of commission, the Bank deducts tax at source whichis reflected in the Form 26AS of the petitioner uploaded by theBank on the portal of the Income Tax Department. Thepetitioner has placed on record a copy of the certificate ofdeduction of tax at source in Form 26AS for the assessment year2022-23 as Annexure-P3. 5. It appears that the return of income of the petitionerwas selected for scrutiny assessment under “CASS”. The reasonfor selection of the case was “large cash deposits compared toreturn income (Non Business Cases)”. Accordingly, notice underSection 143(2) of the Income Tax Act, 1961 (hereinafter referredto as the ‘Act of 1961’) was issued to the petitioner on01.06.2023. 5. It appears that the return of income of the petitionerwas selected for scrutiny assessment under “CASS”. The reasonfor selection of the case was “large cash deposits compared toreturn income (Non Business Cases)”. Accordingly, notice underSection 143(2) of the Income Tax Act, 1961 (hereinafter referredto as the ‘Act of 1961’) was issued to the petitioner on01.06.2023. 6. Admittedly, during the scrutiny proceeding, severalopportunities were given to the petitioner to file his submissionsand submit the relevant documents but the petitioner failed tocomply with the notices issued to him. In the circumstances, theAssessing Officer passed the impugned assessment order underSection 144 read with Section 144B of the Act of 1961 by following the procedures laid down under the faceless scheme.The Assessing Officer has determined the total assessed incomeat Rs.12,91,21,700/- with an addition of Rs.12,87,40,606/-under Section 69A of the Act of 1961 against the declared returnincome of Rs.3,81,094/-. 7. The petitioner has, though, challenged the procedure adopted by the Assessing Officer during the facelessproceeding, at this stage, it transpired in course of argument thatthe petitioner has got an alternative remedy of appeal underSection 246A of the Act of 1961 before the CIT (Appeals). 8. Learned Senior Standing Counsel for the IncomeTax Department submits that in view of an alternative statutoryremedy which is equally efficacious, this Court need notentertain the present writ application, however, learned SeniorCounsel for the petitioner submits that during pendency of thewrit application, the Central Bank of India (Respondent No. 2)has brought on the record a counter affidavit and on a barereading of the statements made in paragraphs ‘10’ and ‘11’ ofthe counter affidavit, it would appear that the petitioner hasearned a commission income of Rs.3,34,882/- only. The Bankhas clearly stated in paragraph ‘11’ of its counter affidavit thatthe petitioner deposited the customer amount in the overdraft account 3616675872 on the basis of the tripartite agreement andsubsequently remitted the same to the Bank which did not formpart of its income chargeable to tax. By showing thesestatements in the counter affidavit of Respondent No. 2, learnedSenior Counsel for the petitioner submits that grave injusticewould be caused to the petitioner if the impugned order is notset aside and the petitioner is not given an opportunity to placeall the materials before the Assessing Authority. 9. Having heard learned counsel for the parties and onperusal of the records, this Court finds that the counter affidavitof the Department of Income Tax enlists the various noticesissued to the petitioner from time to time in course of theassessment proceeding. In paragraph ‘3’ of the counter affidavit,after showing the kind of show cause notices and letters issuedto the petitioner in this case, the Department has made acategorical statement that after complying with all the statutoryprovisions and by following the due procedures as laid downunder the faceless scheme, the assessment order was completedunder Section 144 read with Section 144B of the Act of 1961.To that extent, there is no difficulty in appreciating the stand ofthe Department but at this stage when this Court goes throughthe averments made in the counter affidavit of the Bank, particularly, in paragraphs ‘10’ and ‘11’, it appears to this Courtthat the contention of the petitioner that he had income fromcommission only and the amount deposited in the overdraftaccount were that of the customers which were remitted to theBank cannot be thrown out. His submission is required to beconsidered. 10. Paragraphs ‘10’ and ‘11’ of the counter affidavit ofthe Bank read as under:- particularly, in paragraphs ‘10’ and ‘11’, it appears to this Courtthat the contention of the petitioner that he had income fromcommission only and the amount deposited in the overdraftaccount were that of the customers which were remitted to theBank cannot be thrown out. His submission is required to beconsidered. 10. Paragraphs ‘10’ and ‘11’ of the counter affidavit ofthe Bank read as under:- “10. That as per tripartite agreement, theconcerned BC has taken deposit from thecustomer and further credit amount in thebank account. Withdrawal payment was alsodone on the same basis. This exercise ofcase transaction is based on principleundermentioned at BC point. When cash isaccepted from customer for depositing incentral bank account, by bank BC, then atfirst BC account got debited and thereaftercustomer account got credited by the sameamount at BC point, when cash payment tocustomer is made by our bank BC, then atfirst customer account got debited andthereafter BC account got credited by thesame amount. 11. That petitioner deposit the customeramount in the overdraft account3616675872 on the basis of tripartiteagreement and subsequently remitted to thebank did not form part of its incomechargeable to tax. Turnover in this accountfor financial year 2021-22 is satisfactory(credit summation Rs.156536764 and debitsummationRs156556619).Thecommission amount Rs.334882/-.” 11. In the kind of the pleadings available on the lekhi/-U record, this Court grants liberty to the petitioner to avail theremedy of statutory appeal before the CIT (Appeals) within aperiod of four weeks from today. If such an appeal is preferred,the same will be considered keeping in view that the petitionerwas pursuing his remedy before this Court by filing this writapplication under some bonafide legal advice. 12. The Appellate Authority shall consider the appeal and pass an appropriate order thereon within a period of fourmonths from the date of filing of the appeal. 13. Learned Senior Counsel for the petitionerundertakes that he will fully co-operate with the AppellateAuthority in early disposal of the appeal and shall not seekunnecessary adjournments. 14. It would be expected that the Assessing Officershall not take coercive action against the petitioner for thepresent. 15. This writ application stands disposed of accordingly. (Rajeev Ranjan Prasad, J) (Ashok Kumar Pandey, J)