Shri Durai Murugan Kathir Anand v. Additional Commissioner Of Income Tax, Central Range – 1, Chennai – 600 034

IN THE HIGH COURT OF JUDICATURE AT MADRAS Shri Durai Murugan Kathir Anand ... Petitioner in both the W.Ps.Vs. 1. Additional Commissioner of Income Tax, Central Range – 1, Chennai – 600 034. 2. Deputy / Assistant Commissioner of Income Tax, Central Circle – 1(3), Chennai – 600 034. ... Respondents in both the W.Ps. PRAYER in W.P.No.21027/2021:- Writ Petition filed under Article226 of the Constitution of India, praying for issuance of a Writof Certiorarified Mandamus, calling for the records on the filerespondents including the appraisal report in passing theimpugned order in ITBA/AST/F/167/2021-22/1035883599(1), dated25.09.2021, for the Assessment Year 2019-20 and quash the sameas illegal, arbitrary and devoid of merit and consequently,direct the first respondent to pass a fresh order under Section144A of the Income Tax Act, 1961, after considering thepetitioner's submissions and granting the petitioner sufficientopportunity. PRAYER in W.P.No.21854/2021:- Writ Petition filed under Article226 of the Constitution of India, praying for issuance of a Writof Certiorarified Mandamus, calling for the records on the filesecond respondent in passing the impugned order inITBA/AST/S/153A/2021-22/1035920667(1), dated 27.09.2021, for the Assessment Year 2019-20 and quash the same as illegal, arbitraryand devoid of merit and consequently, direct the assessment tobe done afresh by the second respondent in an independent mannerafter considering the petitioner's submissions and grantingsufficient opportunity. For Petitioner: Mr.P.S.Raman(in both the W.Ps.) Senior Counselfor Mr.R.SivaramanFor Respondents: Mr.A.P.Srinivas(in both the W.Ps.) Senior Standing Counsel COMMON ORDER In W.P.No.21027 of 2021, the petitioner has challenged orderdated 25.09.2021 passed under Section 144A of the Income TaxAct, 1961 (hereinafter referred to as ''the IT Act''). InW.P.No.21854 of 2021, the petitioner has challenged theconsequential Assessment Order dated 27.09.2021 passed underSection 153A of the IT Act, 1961. 2.The case of the petitioner is that a sum ofRs.11,48,51,800/- was seized on 01.04.2019 from the residenceof one Mr.Damodaran and Mrs.Vimala Damodaran, Karigiri Road,Pallikuppam Railway Gate, Katpadi. It is the case of thepetitioner that the cash recovered from the house of abovecouple did not belong to him and therefore, it cannot be addedto his total taxable income as undisclosed income contrary tothe return filed. 3.Learned Senior Counsel for the petitioner submits thatpursuant to the aforesaid seizure, a Show Cause Notice, dated08.09.2021, was issued by the second respondent to thepetitioner, to which the petitioner replied and also moved anapplication dated 21.09.2021 under Section 144A of the IT Act,1961 before the first respondent Additional Commissioner ofIncome Tax, Chennai, for the following reliefs:- (i) It is submitted and prayed that the Hon'bleAdditional Commissioner of Income-Tax, Central Range-1, Chennai, may be pleased to call for and examine therecords, from the Assessing Officer, i.e.,Deputy/Assistant Commissioner of Income-Tax, CentralCircle 1(3), Chennai, (including the varioussubmissions and material evidences submitted by thepetitioner during the course of Post-Search Proceedings and Assessment Proceedings), pertaining tothe petitioner, relevant to the Assessment Year 2019-2020. (ii) Further, to issue appropriate direction(i.e., to conduct an independent inquiry in the lightof the detailed submissions furnished), to theDeputy/Assistant Commissioner of Income-Tax, CentralCircle 1(3), Chennai, (who is predominantly guided bythe appraisal report of the case) for the guidance ofthe Assessing Officer to enable him to complete theAssessment on the basis of the detailed groundsfurnished above. Proceedings and Assessment Proceedings), pertaining tothe petitioner, relevant to the Assessment Year 2019-2020. (ii) Further, to issue appropriate direction(i.e., to conduct an independent inquiry in the lightof the detailed submissions furnished), to theDeputy/Assistant Commissioner of Income-Tax, CentralCircle 1(3), Chennai, (who is predominantly guided bythe appraisal report of the case) for the guidance ofthe Assessing Officer to enable him to complete theAssessment on the basis of the detailed groundsfurnished above. (iii) In the event, if any direction is to beissued prejudicial to the interest of the petitioner,the same may be given after affording a reasonableopportunity of being heard to the petitioner. (iv) In view of the detailed background narratedas above, it is prayed that the Hon'ble AdditionalCommissioner of Income-Tax, Central Range-1, Chennaimay be pleased to consider this petition judiciallyand render justice." 4.Learned Senior Counsel for the petitioner submits that theaforesaid petition was disposed in a peremptory manner withoutany discussion by the first respondent accepting the views inthe Show Cause Notice issued by the second respondent on08.09.2021 and the views expressed by the Investigating Officer. 5.Learned Senior Counsel submits that the first respondentAdditional Commissioner of Income Tax abdicated his functionunder Section 144A of the IT Act, 1961 while passing theimpugnedorderdated25.09.2021,whichhasbeenchallenged/impugned in W.P.No.21027 of 2021. 6.It is submitted that before disposing the petition underSection 144A of the IT Act, the Officer concerned exercisingjurisdiction under Section 144A of the IT Act was required toapply his mind independently. However, the said Officer hasrejected the application on suspicions, conjectures and surmisesbased on the report of Jurisdictional Investigating Officer. 7.In this connection, the learned Senior Counsel for thepetitioner has relied on the following decisions:- i. Omar Salay Mohamed Sait Vs Commissioner ofIncome-tax, [1959] 37 ITR 151 (SC). https://hcservices.ecourts.gov.in/hcservices/ ii.Umacharan Shaw & Brothers Vs Commissioner ofIncome-tax, [1959] 37 ITR 271 (SC).iii.Lalchand Bhagat Ambica Ram Vs Commissioner ofIncome-tax, [1959] 37 ITR 288 (SC).iv.Commissioner of Income-Tax, Faridabad Vs AnupamKapoor, [2008] 166 Taxman 178 (Punjab & Haryana). 8.Learned Senior Counsel for the petitioner futher submitsthat under Section 132(4A)(1) of the IT Act, where any books ofaccount, other documents, money, bullion, jewellery or othervaluable article or thing are or is found in the possession orcontrol of any person in the course of a search, it is to bepresumed that such books of account, other documents, money,bullion, jewellery or other valuable article or thing belong orbelongs to such person. It is submitted that presumption cannotbe rebutted in the absence of evidence to the contrary as theowner of cash Mr.Srinivasan has claimed ownership. 9.It is further submitted that one Mr.S.Srinivasan, thebrother-in-law of Mr.Damodaran and brother of Mrs.Vimala [fromwhose residence the cash was recovered], has given a voluntarystatement on the date of seizure that the cash belonged to himand he has also approached the Settlement Commission to settlethe case. 10. It is therefore submitted that the cash recovered fromthe premises of Mr.Damodaran and Mrs.Vimala cannot be treated asundisclosed income of the petitioner under Section 69A of theI.T. Act. 9.It is further submitted that one Mr.S.Srinivasan, thebrother-in-law of Mr.Damodaran and brother of Mrs.Vimala [fromwhose residence the cash was recovered], has given a voluntarystatement on the date of seizure that the cash belonged to himand he has also approached the Settlement Commission to settlethe case. 10. It is therefore submitted that the cash recovered fromthe premises of Mr.Damodaran and Mrs.Vimala cannot be treated asundisclosed income of the petitioner under Section 69A of theI.T. Act. 11.It is further submitted that the said Srinivasan claimedto be a party worker and has categorically stated that the moneywas sourced by him as a party worker to ensure the victory ofthe petitioner in the Parliamentary Election and kept it in hissister's house and has given a sworn statement and has alsoapproached the Settlement Commission and has paid the admittedtax on the cash recovered from the premises of his brother-in-law and sister, namely, Mr.Damodaran and his wife Mrs.Vimala. 12.It is therefore submitted that impugned proceeding alsoresults in double taxation as the additional liability has beenfastened under Section 69 A of the IT Act, 1961 on thepetitioner while the same income is being taxed in the hands ofthe Mr.S.Srinivasan who claimed to be the owner of the money. 13.Learned Senior Counsel further submits that in view ofthe abolition of the Settlement Commission in the Finance Act,2021 with effect from 01.02.2021, the case was not taken up forhearing and therefore Mr. S.Srinivasan filed W.P.No.5463 of https://hcservices.ecourts.gov.in/hcservices/ 2021. It is submitted that the said writ petition along with abatch of writ petitions came up for admission before thisCourt on 05.03.2021 and the said Writ Petition is pending as ondate. 14.Learned Senior Counsel for the petitioner incidentallysubmits that the Central Board of Direct Taxes has now issued aclarification to the effect that the applications filed beforethe Settlement Commission to settle the case before 30.09.2021will be entertained and heard by the Settlement Commission andtherefore in the light of the admission of Mr.S.Srinivasan thatthe amount recovered from the premises of Mr.Damodaran andSmt.Vimala cannot be treated as the amount of the petitionermerely because the statements were obtained on 01.04.2019 fromMr.Damodaran. It is therefore submitted that the impugned orderpassed under Section 144A of the IT Act is unsustainable. 15.It is submitted that after the Show Cause Notice wasissued, a specific prayer was made to the first respondent so asto give guidance to the second respondent Assessing Officer tocomplete the assessment which has been rejected without properreasoning. It is submitted that the first respondent has merelyextracted the report of the Investigating Officer and rejectedthe application filed by the petitioner under Section 144-A ofthe Income Tax Act, 1961. 16. Learned Senior Counsel for the petitioner furthersubmits that while passing an order under Section 144A of the ITAct, 1961, the Officer has to exercise a discretion as iscontemplated under the aforesaid provision and cannot simplyrely on the report of the Investigating Officer. 17. It is further submitted that as a consequence of theorder dated 25.09.2021 under Section 144-A of the Income TaxAct, 1961, Assessment Order dated 27.09.2021 for the AssessmentYear 2019-2020 was presented as a fait accompli even thoughthere is a clear presumption under law under Section 134-A readwith Section 292C of the Income Tax Act. 18.It is further submitted that the order passed underSection 144A of the IT Act, 1961 on 25.09.2021 impugned inW.P.No.21027 of 2021 has to therefore go and therefore theconsequential Assessment Order passed on 27.09.2021 underSection 153A of the IT Act, 1961 impugned in W.P.No.21854 of2021 also has to go. 17. It is further submitted that as a consequence of theorder dated 25.09.2021 under Section 144-A of the Income TaxAct, 1961, Assessment Order dated 27.09.2021 for the AssessmentYear 2019-2020 was presented as a fait accompli even thoughthere is a clear presumption under law under Section 134-A readwith Section 292C of the Income Tax Act. 18.It is further submitted that the order passed underSection 144A of the IT Act, 1961 on 25.09.2021 impugned inW.P.No.21027 of 2021 has to therefore go and therefore theconsequential Assessment Order passed on 27.09.2021 underSection 153A of the IT Act, 1961 impugned in W.P.No.21854 of2021 also has to go. 19.Opposing the prayer in the present writ petitions, thelearned standing counsel for the respondents submits that notonly statements were obtained from the persons from whom cash https://hcservices.ecourts.gov.in/hcservices/ was recovered, but also from the petitioner. The statementgiven by Mr.Srinivasan, voluntarily claiming ownership of thecash was not satisfactory. It is submitted that statements werealso obtained from the petitioner. It is submitted thatMr.Srinivasan is a person of no means as neither he has shownany genuine source of such huge amount nor filed any returns. 20.It is submitted that a notice under Section 153 A of theIT Act, 1961 was issued to the petitioner on 17.08.2020 andthereafter, a notice under sub-section 1 to Section 142 of theIT Act, 1961 was issued to the petitioner on 13.01.2021. 21.In this connection, reference was made to Annexureattached to notice under Section 142(1) of the IT Act, 1961,wherein it has been clearly stated as follows:- "3. You have been made aware that cash of Rs.11.50crores was found in packets marked as Alangayam,Pallikonda, etc., with marking of Municipal Wardsfalling under Vellore Parliamentary Constituency andcontaining details of number of men and women voters,therein, from the residence of Shri. Damodaran andSmt.Vimala, karigiri Road, Pallikuppam Railway Gate,Katpadi. Since, you were the contesting candidate forVellore Parliamentary Constituency, please explain asto how the packets indicating that the cash meant fordistribution in Vellore constituency was found in theresidence of Shri.Damodaran and Smt.Vimala. 4. Please explain your relationship withShri.Poonjolai Srinivasan, who claimed in the courseof his sworn statement dated 01.04.2019 that he hadkept cash of Rs.11.50 crores for distribution tovoters in Vellore Parliamentary constituency, tosecure the success of the DMK candidate in theParliamentary election, 2019, and you were the DMKcandidate." 22.It is submitted that it is only thereafter a Show CauseNotice was issued on 08.09.2021 to which the petitioner hasreplied and thereafter filed a petition under Section 144A ofthe IT Act, 1961 on 25.09.2021. 23.Learned Standing Counsel for the respondents submits thatthe submission of the petitioners were considered before passingof the Impugned Order dated 25.09.2021 under Section 144A of theIT Act, 1961. The Officer has directed the Assessing Officer toproceed with the assessment in accordance with law andtherefore, there is no reason to interfere with the impugnedorder. https://hcservices.ecourts.gov.in/hcservices/ 24.It is submitted that the Assessing Officer namely, thesecond respondent has thereafter proceeded in accordance withlaw and an Assessment Order has been passed on 27.09.2021 withthe approval of the first respondent, who passed the order underSection 144-A of the IT Act, 1961. 23.Learned Standing Counsel for the respondents submits thatthe submission of the petitioners were considered before passingof the Impugned Order dated 25.09.2021 under Section 144A of theIT Act, 1961. The Officer has directed the Assessing Officer toproceed with the assessment in accordance with law andtherefore, there is no reason to interfere with the impugnedorder. https://hcservices.ecourts.gov.in/hcservices/ 24.It is submitted that the Assessing Officer namely, thesecond respondent has thereafter proceeded in accordance withlaw and an Assessment Order has been passed on 27.09.2021 withthe approval of the first respondent, who passed the order underSection 144-A of the IT Act, 1961. 25.Learned Senior Standing Counsel for the respondentsfurther submits that the Officer namely, the first respondenthas considered the submissions/statements and has come to aconclusion that the order has to be passed by the secondrespondent in accordance with law and therefore, the petitionercannot challenge the order passed under Section 144A of the ITAct, 1961. 26.Learned Senior Standing Counsel for the respondentsfurther submits that W.P.No.21027 of 2021 has to be dismissedas infructuous in view of the assessment order passed by thesecond respondent. 27.It is therefore submitted that there is no merit in thesewrit petitions as the petitioner has an alternate remedy beforethe Appellate Commissioner under Section 246A of the IT Act,1961. 28.It is further submitted that the petitioner has analternate remedy by way of appeal against the Assessment Orderpassed under Section 153A of the IT Act, 1961 and therefore, onthis count also, W.P.No.21854 of 2021 has to be dismissed. 29.I have considered the rival submissions and perused theimpugned order and the case laws submitted by the learned SeniorCounsel for the petitioner. 30.The show cause notice issued to the petitioner elicitscontradiction and therefore applying the principle ofpreponderance of probability, the petitioner was called upon toshow cause as to why the aforesaid amount and other amountstotalling to Rs.12,49,99,000/- should not be treated asundisclosed income in the hands of the petitioner in terms ofsection 69 A of the Income Tax Act, 1961. 31.Though the petitioner had filed a reply dated 17.09.2021to the show cause notice, within four days, thereafter, thepetitioner filed a petition under Section 144A of the IT Act,1961. 32.The first respondent Additional Commissioner has passedthe impugned order dated 25.09.2021 and disposed theapplication filed by the petitioner under Section 144A of the IT https://hcservices.ecourts.gov.in/hcservices/ Act, 1961. The second respondent has thereafter, proceeded tothe pass the impugned assessment order dated 27.09.2021. Thereis no discussion in the order dated 25.09.2021. It merelyreproduces the content of the petitioner's application filedunder Section 144A of the IT Act, 1961 and report of theInvestigating Officer. The impugned order dated 25.09.2021passed by the first respondent Additional Commissioner filedunder Section 144A of the IT Act, 1961 however, directs thesecond respondent to pass orders in accordance with law. 33.Therefore, the issue is to be considered in these writpetitions is, whether the first respondent was bound tonecessarily give direction to the second respondent underSection 144A of the IT Act,1961, as was prayed by the petitionerin the application and whether the order passed under Section144A of the IT Act, 1961 suffers from any vices of non-application of mind. 34.Section 144A of the IT Act, 1961 deals with the power ofJoint Commissioner to issue directions. It reads as under:- ''Power of Joint Commissioner to issue directionsin certain cases. 33.Therefore, the issue is to be considered in these writpetitions is, whether the first respondent was bound tonecessarily give direction to the second respondent underSection 144A of the IT Act,1961, as was prayed by the petitionerin the application and whether the order passed under Section144A of the IT Act, 1961 suffers from any vices of non-application of mind. 34.Section 144A of the IT Act, 1961 deals with the power ofJoint Commissioner to issue directions. It reads as under:- ''Power of Joint Commissioner to issue directionsin certain cases. 144-A. A Joint Commissioner may, on his ownmotion or on a reference being made to him by theAssessing Officer or on the application of anassessee, call for and examine the record of anyproceeding in which an assessment is pending and, ifhe considers that, having regard to the nature of thecase or the amount involved or for any other reason,it is necessary or expedient so to do, he may issuesuch directions as he thinks fit for the guidance ofthe Assessing Officer to enable him to complete theassessment and such directions shall be binding on theAssessing Officer : Provided that no directions which areprejudicial to the assessee shall be issued before anopportunity is given to the assessee to be heard. Explanation.—For the purposes of thissection no direction as to the lines on which aninvestigation connected with the assessment should bemade, shall be deemed to be a direction prejudicial tothe assessee.'' 35.A direction under Section 144A of the IT Act, 1961 can beissued ''where such officer considers it necessary orexpedient to do so having regard to the nature of the case orthe amount involved or for any other reason''. 36.A direction under Section 144A of the IT Act, 1961 canbe issued to the Assessing Officer, either on his own motion suomotu or a on reference by the jurisdictional Assessing Officeror on an application of an assessee. The above-mentioned powerof the Joint Commissioner/ Additional Commissioner to issue pre-assessment directions to the Income-tax Officer in individualcases is in addition to the general power conferred on him bysection 119(3) to issue instructions which stood up to 01.04.88. 37.Directions once issued is binding on the Income-taxOfficer. Where, however, any directions prejudicial to interestof the assessee is to be issued, it shall be only after theassessee has been given an opportunity of being heard. Anydirection issued by the Inspecting Assistant Commissioner inregard to the lines on which investigation may be made in anassessment, shall not be treated as a direction prejudicial tothe assessee. In this case, the first respondent has directedthe second respondent to complete the assessment in accordancewith law. 38.Sections 144A and 144B were inserted in the IT Act, 1961by the Taxation Laws (Amendment) Act, 1975. They were insertedpursuant to the recommendations of the Wanchoo Committee. Therecommendations which lead to the incorporation of Section 144Aare as follows: ''We recommend that the law should authorise theInspecting Assistant Commissioner to call for therecords of a case on his own motion or on a referenceby the Income-tax Officer or a petition made by theassessee before the assessment is finalised and issuesuch directions as he considers fit in thecircumstances of the case for completion of theassessment. The directions given will be legallybinding on the Income-tax Officer. The law shouldprovide for an opportunity to the assessee of beingheard by the Inspecting Assistant Commissioner beforeany directions prejudicial to him are issued.'' 39.Board Circular No.197, dated April 17, 1976, clarifiedthe scope and effect of Section 144A and 144B of the IT Act,1961. The Calcutta High Court in Arrah Sasaram Light Railway Co.Ltd. v. Commissioner of Income-Tax, [(1993) 204 ITR 807] at Page819, has extracted in Para 24, the Board Circular No.197, dated 39.Board Circular No.197, dated April 17, 1976, clarifiedthe scope and effect of Section 144A and 144B of the IT Act,1961. The Calcutta High Court in Arrah Sasaram Light Railway Co.Ltd. v. Commissioner of Income-Tax, [(1993) 204 ITR 807] at Page819, has extracted in Para 24, the Board Circular No.197, dated April 17, 1976. Para 24 from the said judgment is reproducedbelow:- ''24.The Board in Circular No. 197, dated April17, 1976 (see [1977] 110 ITR (St.) 17), explains thescope and effect of the two provisions. It would beuseful to refer to them as they afford some clue tothe scope and effect and the differentia of the twolegislative measures. ''Powers of the Inspecting Assistant Commissionerto issue pre assessment directions [new section 144A]. 2.The Amending Act has inserted a new section 144Aempowering the Inspecting Assistant Commissioner toissue pre-assessment directions to the Income-taxOfficer. It provides that the Inspecting AssistantCommissioner may, either on his own motion or on areference from the Income-tax Officer or on theapplication of the assessee, call for and examine theassessment record of any assessee in which anassessment is pending, and issue such directions tothe Income-tax Officer as he deems fit so as to enablethe Income-tax Officer to complete the assessment. Thedirections shall be issued only where the InspectingAssistant Commissioner considers it necessary orexpedient to do so having regard to the nature of thecase or the amount involved or for any other reason.The directions in question shall be binding on theIncome-tax Officer. However, any directions which areprejudicial to the assessee shall be issued by theInspecting Assistant Commissioner only after theassessee has been given an opportunity of being heard.Any direction issued by the Inspecting AssistantCommissioner in regard to the lines on whichinvestigation may be made in an assessment, shall notbe treated as a direction prejudicial to the assessee.3.The above-mentioned power of the InspectingAssistant Commissioner to issue pre-assessmentdirections, to the Income-tax Officer in individualcases is in addition to the general power conferred onhim by section 119(3) to issue instructions.'' 40.A reading of the above provision makes it clear that thedecision whether to issue a direction is to be based onobjective material available. It is however on a subjectivedecision of such officer. The power is to be exercised to givea sense of direction to the assessing officer ''where suchofficer considers it necessary or expedient to do so havingregard to the nature of the case or the amount involved or forany other reason.'' 41.As far as the facts of the case are concerned, Rs.11.49crores in cash was recovered on 01.04.2019 from the house ofMr.Damodaran and Mrs.Vimala Damodaran in packet with markingssuch as Alangayam, Pallikonda etc. with the marking of theMunicipal Wards, falling under the Vellore ParliamentaryConstituency from where the petitioner was contesting. 42.ThebrotherofMrs.VimalaDamodarannamely,Mr.S.Srinivasan came forward and gave a voluntary statementdated 01.04.2019 and stated that the cash belonged to him fordistribution to the Voters in the Vellore Parliamentaryconstituency to secure victory of the petitioner in theparliamentary election and that the amount was earned by him inhis real estate business suggesting corrupt practice in theparliamentary election either by the petitioner or his party. 43.However, the record indicate that Mr.S.Srinivasan has nodocuments to substantiate that he was a man of sufficient meansand that the money was either earned by him from his real estatebusiness or was given to him by the party sponsoring thepetitioner to contest the election and that the former had givencash to him to corrupt the voters and indulge in corruptelectoral practice. 43.However, the record indicate that Mr.S.Srinivasan has nodocuments to substantiate that he was a man of sufficient meansand that the money was either earned by him from his real estatebusiness or was given to him by the party sponsoring thepetitioner to contest the election and that the former had givencash to him to corrupt the voters and indulge in corruptelectoral practice. 44.The presumption under Section 132(4A)(i) and Section 292Cof the IT Act, 1961 that the books of account, the documents,money, bullion or other valuable article or thing are or isfound in the possession or control any person is a rebuttablepresumption. 45.Such a presumption under Section 132 (4A)(i) and Section292C of the IT Act, 1961 can be drawn against Mr.Damodaran andMrs.Vimala Damodaran from whose premises seizure of the cash waseffected. 46.Though such a presumption is a rebuttable presumption,it can be rebutted only if there are adequate evidence by aperson claiming ownership that they belong to any other person. 47.The show cause notice issued to the petitioner alsosuggest that Mr.Damodaran was an employee of the Colleges runby the Trust Durai Murugan Educational Trust in which thepetitioner is a Trustee. Along with the cash, details of busfees/hostel fees/mess fees payable by the students of were foundalong with the cash of Rs.11.49 crores. 48.The evidence gathered by the respondent during the courseof investigation prima facie appears to be overwhelminglyagainst petitioner. The first respondent could possibly come to https://hcservices.ecourts.gov.in/hcservices/ no different conclusion while passing the impugned order, dated25.09.2021, on the application filed by the petitioner underSection 144A of IT Act, 1961. 49.The statement of Mr.S.Srinivasan claiming that the cashbelonged to him does not satisfy the test of preponderance ofprobability that the cash indeed belongs to him. Mr.S.Srinivasanhas not produced any records to substantiate that the cashbelonged to him. The show cause notice also indicates thatMr.S.Srinivasan has not filed any income tax returns to justifyhis version. Mr.Srinivasan has also not given any satisfactoryexplanation to substantiate his claim. On the other hand, thereis a preponderance of probability that the cash belonged to thepetitioner. 50.Since preponderance of probability indicate that theseized cash was an undisclosed income of the petitioner and waskept at the residence of Mr.Damodaran and Mrs.Vimala Damodaranby the petitioner. These facts suggest that Mr.S.Srinivasan,Mr.Damodaran and Mrs.Vimala Damodaran are trusted person of thepetitioner. 51.Merely, because Mr.S.Srinivasan came forward and gave asworn statement claiming ownership over seized money does notmean that the liability which can be fastened on the petitionerunder the IT Act, 1961 can to be shifted on Mr.S.Srinivasan.Merely, because Mr.S.Srinivasan has filed application to settlecase before the the Settlement Commission, by declaring theseized cash to his cash is of no relevance. 52.The subsequent engineering of an application of settlingthe dispute before the settlement commission by Mr.S.Srinivasanappears to be a mere ploy, ruse to divert attention. It wasfiled to detract the assessment proceedings. The applicationunder Section 144A of the IT Act itself appears to be anafterthought. Instead of giving attention to the show causenotice and participating in the adjudication, the petitionerappears to have been illadvised to venture out in filing theabove application. 52.The subsequent engineering of an application of settlingthe dispute before the settlement commission by Mr.S.Srinivasanappears to be a mere ploy, ruse to divert attention. It wasfiled to detract the assessment proceedings. The applicationunder Section 144A of the IT Act itself appears to be anafterthought. Instead of giving attention to the show causenotice and participating in the adjudication, the petitionerappears to have been illadvised to venture out in filing theabove application. 53.Further, the cash was not found under the control and thepossession of the said Mr.S.Srinivasan. It was found in theresidence of Mr.Damodaran and Mrs.Vimala Damodaran with packetmarkings as Alangayam, Pallikonda etc. with the marking of theMunicipal Wards, falling under the Vellore ParliamentaryConstituency from where the petitioner was contesting. Thepresumption under Sections 132(4A) and 292C of the IT Act thougha rebuttable presumption, is to be presumed against thepetitioner. 54.Mere voluntary sworn statement on the same day byMr.S.Srinivasan claiming that the seized cash were his, is notsufficient. Mr.S.Srinivasan has not shown himself to be a manof substantial means. On the other hand, the fact that thedocuments pertaining to the College/Trust of the Petitioner werefound along with the seized cash as indicated above show thatcash belonged to the petitioner which was not disclosed by thepetitioner in his regular return. 55.Further, the decision under Section 144A of the IT Act,1961 is based on the subjective satisfaction of the firstrespondent based on objective material available. An Officerexercising jurisdiction under the aforesaid provision, has torely only on the information that are available to give a senseof direction to the Assessing Officer. Disposal ofapplication under Section 144A of the IT Act does not warrant adetailed reasoning. In this case, the Officer has directed thesecond respondent to complete the assessment in accordance withlaw. As mentioned above, discretion can be exercised where suchofficer considers it necessary or expedient to do so havingregard to the nature of the case or the amount involved or forany other reason. 56.The power under Section 144A of the IT Act is to beexercised when such an Officer deems it expedient so to enablethe assessing officer to complete assessment. In this case, therejection was based on the report of the jurisdiction assessingofficer which is quite damaging. Therefore, I do not find anyreasons to interfere with the order rejecting the request of thepetitioner under Section 144A of the IT Act as non speaking orsuffering from non application of mind. 57.Instead of defending himself in the Show Cause Noticeproceedings, the petitioner attempted to divert the attention toprolong the longevity of the litigation both before therespondents and now before this Court. It was unwarranted. 58.It is also noticed that the impugned assessment orderdated 27.9.2021 was passed immediately after the impguned orderdated 25.09.2021 was passed referring to Section 144A of theAct. Relevant portion of the Assessment order reads as under:- ''4.4In this regard, it may also be notedthat the person who claimed ownership of the case(S.Srinivasan) did not have the wherewithal to ownsuch a huge cash, on account of factors highlightedsupra. It would also be pertinent to note that cash ofRs.11,48,51,800/- (Rs.10,48,52,800/- in 200 rupeedenominationandremainingRs.99,99,000/-in 58.It is also noticed that the impugned assessment orderdated 27.9.2021 was passed immediately after the impguned orderdated 25.09.2021 was passed referring to Section 144A of theAct. Relevant portion of the Assessment order reads as under:- ''4.4In this regard, it may also be notedthat the person who claimed ownership of the case(S.Srinivasan) did not have the wherewithal to ownsuch a huge cash, on account of factors highlightedsupra. It would also be pertinent to note that cash ofRs.11,48,51,800/- (Rs.10,48,52,800/- in 200 rupeedenominationandremainingRs.99,99,000/-in denominations of 500 and 2000 rupees) was found inpackets marked as Alangayam, Pallikonda, etc., withmarking of Municipal wards falling under VelloreParliamentary constituency and containing details ofnumber of men and women voters, therein. This alsoreveals that the cash belongs to the assessee, Shri.D.M.Kathir Anand, who was the DMK (Dravida MunnetraKazhagam party candidate for the 2019 VelloreParliamentary constituency. 4.5. Further, it was also noticed during thecourse of enquiry with Canara Bank currency chestManager (statement of whom was furnished to Shri.D.M.Kathir Anand, on his A.R.’s requisition) and fewotherCanaraBankBranchManagersthatRs.11,50,00,000/- was converted into 200 rupeedenominations by Shri. Poonjolai Srinivasan fromCanara Bank but only Rs.10,48,52,800/- was found in200 rupee denomination during the search on 01.04.2019from the residence of Smt. Vimala and Shri. Damodaran.Thus, as against cash converted into 200 rupeedenominationofRs.11,50,00,000/-onlyRs.10,48,52,800/- was found, giving the inference thatthe balance amount of Rs.1,01,47,200/- (Rs.11,50,00,000-Rs.10,48,52,800) was already expended.The source for the balance expended cash ofRs.1,01,47,200/- also remains unexplained. For thereasons stated supra, it is inferred that theassessee, Shri. D.M.Kathir Anand, and not Shri.Poonjolai Srinivasan, is the owner of the expended sumof Rs.1,01,47,200/- also. 4.6. Thus, in the light of the above aspects, itis inferred that the cash seized (Rs.11,48,51,800)from the residence of Shri. Damodaran and the cashexpended(Rs.1,01,47,200)totalingtoRs.12,49,99,000/- is owned by Shri D.M.Kathir Anand.The income returned details of the assessee (Shri.D.M.Kathir Anand) as seen from his income-tax returnsreveal that this cash of Rs.12,49,99,000/- has notbeen disclosed to the department and it has beenearned by him from undisclosed sources. 4.7. The assessee was given show cause noticedated 08.09.2021 as to why the aforesaid amount ofRs.12,49,99,000/- ought not to be brought to tax, byhighlighting the above factors. The assessee repliedto the show cause notice on 20.09.2021 andsimultaneously, filed petition u/s.144A to the Range Head (Addl.CIT, Central Range-1, Chennai). The rangehead heard both the assessing officer and theassessee’s A.R., Shri. Shunmughasundaram, C.A., on23.09.2021 and after considering the submissions ofboth the assessing officer and the assessee, rejectedthe petitioner u/s.144A, vide order dated 25.09.2021.Now, coming to the reply of the assessee to the showcause notice issued by the assessing officer, the cruxof the assessee’s objections are enumerated below: The assessee has no financial or businessconnection with Shri. S.Srinivasan (alias) PoonjolaiSrinivasan and it is unreasonable to pin the actionsof Shri. S.Srinivasan on him. Merely because the assessee is the Chairman ofDuraimurugan Educational Trust and the materialspertaining to Duraimurugan Educational Trust werefound along with the cash at the residence ofDamodaran, it cannot be concluded that the assessee isthe owner of the cash. The assessee has no financial or businessconnection with Shri. S.Srinivasan (alias) PoonjolaiSrinivasan and it is unreasonable to pin the actionsof Shri. S.Srinivasan on him. Merely because the assessee is the Chairman ofDuraimurugan Educational Trust and the materialspertaining to Duraimurugan Educational Trust werefound along with the cash at the residence ofDamodaran, it cannot be concluded that the assessee isthe owner of the cash. Section 292C states that any assets, books ofaccounts, documents, etc. found in possession/controlof any person during search may be presumed belong tosuch person. 4.7.1.On objection marked as (a) hereinabove,Shri. S.Srinivasan has explicitly stated that he was aDMK representative and he wanted to ensure victory ofhis party’s candidate. However, he did not have thewherewithal to possess cash of Rs.12,49,99,000/-. Thisaspect coupled with the fact that papers pertaining toDuraimurugan Educational Trust (of which the assesseeis the Chairman) were found along with the cash andthe voters details relating to the VelloreParliamentary constituency indicate that the cashbelongs to Shri. D.M.Kathir Anand only and Shri.S.Srinivasan is only a name lender. 4.7.2.On objection (b), no logical reason hasbeen given by the assessee to explain as how thematerials pertaining to Duraimurugan Educational Trustwere found alongwith the cash at the residence ofDamodaran. Also, the assessee was the DMK candidatefor the 2019 Vellore Parliamentary constituency.Hence, at the time of election, the cash foundalongwith the Trust papers (of which the assessee isthe Chairman) indicate that the cash belongs only tothe assessee and not to Shri. S.Srinivasan. 4.7.3.As regards objection (c), it may benoted that section 292C only lays down a presumptionof money, jewellery, etc. belonging to a person fromwhom it was found. In the case on hand, in the lightof all the factors discussed supra, the presumption isrebutted with the finding that the amount ofRs.12,49,99,000/- belong to the assessee and not toShri. S.Srinivasan. 4.8. In the circumstances, the cash ofRs.12,49,99,000/- is to be taxed in the assessee’s(Shri D.M.Kathir Anand) hands substantively u/s.69A ofthe I.T.Act, 1961, for the assessment year 2019-2020[since, the search and the cash found was on01.04.2019, the preponderance of probability indicatesthat the amount of Rs.12,49,99,000/- could not havebeen earned in the assessment year (2020-2021)relevant to the date of seizure, viz., 01.04.2019]. In the light of the above, the total income ofthe assessee, Shri.D.M.Kathir Anand, is computed asunder : Total income returned : Rs.55,17,990/-Add: As discussed in para 4, addn. u/s.69A : Rs.12,49,99,000/- ------------------------Total income assessed : Rs.13,05,16,990/- ------------------------ Demand notice and calculation sheet enclosed. This order is passed with the prior approval of theAdditional Commissioner of IncomeTax, Central Range-1,Chennai as per sec.153D of the Act. Penalty proceedings u/s.270A of the I.T.Act, 1961 isinitiated separately.'' 59.Therefore, there is no merit in the challenge to theimpugned order dated 25.09.2021 passed by the first respondentunder Section 144A of the Income Tax Act, 1961. Hence,W.P.No.21027 of 2021 filed by the petitioner is liable to bedismissed. 60.The impugned assessment order dated 27.9.2021 passed bythe second respondent appears to be well reasoned and therefore https://hcservices.ecourts.gov.in/hcservices/ does not warrant any interference under Article 226 of theConstitution of India. Therefore, I do not find any reason toquash impugned assessment order dated 27.9.2021. Therefore,W.P.No.No.21854 of 2021 is also liable to be dismissed. Penalty proceedings u/s.270A of the I.T.Act, 1961 isinitiated separately.'' 59.Therefore, there is no merit in the challenge to theimpugned order dated 25.09.2021 passed by the first respondentunder Section 144A of the Income Tax Act, 1961. Hence,W.P.No.21027 of 2021 filed by the petitioner is liable to bedismissed. 60.The impugned assessment order dated 27.9.2021 passed bythe second respondent appears to be well reasoned and therefore https://hcservices.ecourts.gov.in/hcservices/ does not warrant any interference under Article 226 of theConstitution of India. Therefore, I do not find any reason toquash impugned assessment order dated 27.9.2021. Therefore,W.P.No.No.21854 of 2021 is also liable to be dismissed. 61.At the same time, I give liberty to the petitioner tofile a statutory appeal before the Appellate Commissioner underSection 246A of the IT Act, 1961 against the impugned assessmentorder dated 27.9.2021 passed by the second respondent within aperiod of 30 days from the date of receipt of this order. If ansuch an appeal is filed by the petitioner within such time, theAppellate Commissioner shall pass orders on merits and inaccordance with law. 62.The Appellate Commissioner shall pass orders in theproposed appeal to be filed by the petitioner on merits and inaccordance with law without getting influenced with theobservations in this order. The observation in this order isnot intended to influence the appellate Commissioner. He shallpass orders on merits on the proposed appeal. 63.Considering the fact that the petitioner has enjoyed atemporary repreive during the pendency of these writ petitions,the recovery proceedings shall be kept in abeyance for a periodof 60 days from the date of receipt of a copy of this order,provided the petitioner files such statutory appeal against theimpugned assessment order dated 27.09.2021, within the timestipulated herein and an application under Section 220(6) of theIncome Tax Act, 1961 before the second respondent herein. Thesecond respondent shall endeavour to dispose the same preferablywithin 60 days from the date of receipt of a copy of this order. 64.Needless to state that the second respondent shall beguided by the principle enunciated by this Court in KannammalVs. Income Tax Officer, Ward1(1), Tiruppur [W.P.No.3849 of 2019,dated 13.02.2019] reported in (2019) 413 ITR 390 (Mad) andM/s.Queen Agencies, Rep. by its Managing Director vs. TheAssistant Commissioner of Income Tax (Circle-1), Karaikudi andanother [W.P.(MD)No.5550 of 2020, dated 08.04.2021] reported inCIT (2021) 18 ITR-OL 120 (Mad) and decision of the Hon'bleSupreme Court in Principal Commissioner of Income Tax and othersvs. L.G. Electronics India Private Limited [2018 (18) SCC 447]and the Circulars of the Board while disposing the proposedapplication under Section 220(6) of the I.T. Act. 65.In the result, W.P.No.21027 of 2021 and W.P.No.21854 of2021 are dismissed with the above observations. No costs.Consequently, connected Miscellaneous Petitions are closed. Sd/- Assistant Registrar(CS-VIII) //True Copy// Sub Assistant Registrar jen/smn2 To1. The Additional Commissioner of Income Tax, Central Range – 1, Chennai – 600 034. 2. The Deputy / Assistant Commissioner of Income Tax, Central Circle – 1(3), Chennai – 600 034.