Wa/189/2020 Of Narasimman Padmavathy v. The Income Tax Officer

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 15.09.2020 CORAM: THE HON'BLE MR.JUSTICE N.KIRUBAKARANandTHE HON'BLE MR.JUSTICE P.VELMURUGAN W.A.No.189 of 2020and C.M.P.No.2934 of 2020 --- Narasimman Padmavathy ..Appellant/Writ Petitioner-Vs- The Income Tax OfficerWard-2Tiruvannamalai ..Respondent/Respondent. Prayer: Writ Appeal filed under Clause 15 of Letters Patent,against the order dated 27.11.2019 passed in W.P.No.33157 of2019. W.P.No.33157 of 2019 Prayer: Writ Petition filed under Article226 of the Constitution of India praying to issue writ ofcertiorari, calling for the records pertaining to the order inassessment order No.ITBA/AST/S/144/2019-20/1018695593(1) dated09.10.2019 passed by the respondent and quash the same. For Appellant : Mr.P.C.Harikumar For Respondent : Mr.A.P.Srinivas JUDGMENT P.VELMURUGAN,J. This Writ Appeal is filed against the order dated 27.11.2019passed by the learned Single Judge in W.P.No.33157 of 2019. TheAppellant is the Writ Petitioner who filed W.P.33157 of 2019,seeking to issue a Writ of Certiorari calling for the recordspertainingtotheorderinassessmentorderNo.ITBA/AST/S/144/2019-20/1018695593(1) dated 09.10.2019 passedby the respondent and quash the same. https://hcservices.ecourts.gov.in/hcservices/ 2. The learned Single Judge, after hearing the submissionsmade on both sides, finding that a statutory appellate remedy isavailable to the petitioner by filing regular appeal before theconcerned Appellate Authority, disposed of the writ petition,with liberty to the petitioner to file appeal before theconcerned Appellate Authority, within a period of three weeksfrom the date of the receipt of a copy of the said order andfurther directed the Appellate Authority to consider the sameand pass orders on merits and in accordance with law, withoutreference to the period of limitation. Aggrieved by the saidorder of the learned Single Judge, the writ petitioner/appellantfiled the present intra court appeal. 3.1. The brief facts of the case is that respondent/IncomeTax Officer, Ward 2, Tiruvannamalai, passed the Assessment Orderon 09.10.2019 for the assessment year 2017-18, based on theinformation on the system that the assessee had made cashdeposits of Rs.11,10,000/- in Bank of India, Vandavasi Branch,during the specified period 08.11.2016 to 30.12.2016 in thedemonetized currency. 3.2. Notice under Section 142(1) of the Income tax Act,1961, was issued to the appellant/assessee on 12.03.2018 callingfor the return of income for the assessment year 2017-18. Theappellant/assessee did not respond to the notice issued and didnot file the return of income. Further, show cause notice wasissued to the assessee on 20.05.2019, calling for the details ofthe above cash deposits made, the books of account, financialstatements etc., to explain the source of cash deposits. 3.3. The appellant/assessee appeared and submitted copy ofITR filed for the assessment year 2017-18, copy of Bank Accountstatement, copy of statement of computation of income andAgricultural lands patta and Chitta. The assessee has statedthat she had an opening cash balance in hand of Rs.2,60,000/-and she had received jewel loan on 17.06.2016 of Rs.3,00,000/-,another jewel loan on 29.06.2016 of Rs.2,00,000/- and anagricultural loan of Rs.3,00,000/-, thus totaling Rs.11,10,000/-were unconsumed and kept in hand and the same is deposited inbank after the announcement of demonetization. 3.3. The appellant/assessee appeared and submitted copy ofITR filed for the assessment year 2017-18, copy of Bank Accountstatement, copy of statement of computation of income andAgricultural lands patta and Chitta. The assessee has statedthat she had an opening cash balance in hand of Rs.2,60,000/-and she had received jewel loan on 17.06.2016 of Rs.3,00,000/-,another jewel loan on 29.06.2016 of Rs.2,00,000/- and anagricultural loan of Rs.3,00,000/-, thus totaling Rs.11,10,000/-were unconsumed and kept in hand and the same is deposited inbank after the announcement of demonetization. 3.4. On analysis of the transaction in the savings bankaccount of the Appellant, it transpired that the total creditsmade by the assessee during the FY 2016-17 amounts toRs.16,10,090/-; out of which, the assessee made cash depositsinto the bank account during the previous year relevant to theassessment year in question amounting to Rs.11,20,500/- of whichRs.11,10,000/- was deposited during the specified period i.e.,08.11.2016 to 31.12.2016. It is further noticed that an amountof Rs.15,000/- was deposited prior to the demonetization period https://hcservices.ecourts.gov.in/hcservices/ and no deposit was made after demonetization. 3.5. The assessing order further reads that the assesseefiled the return of income on 12.08.2019 admitting Rs.64,500/-as business income and Rs.3,50,000/- as agricultural income. Itis considered that the return is filed beyond the date allowedand therefore, considered the same as non-est in law. TheAssessing Officer, treating that the assessee failed to respondto the notices issued u/s.142(1) of the IT Act, calling for thereturn of income, the proceedings initiated u/s.142(1) of the ITAct, 1961, was concluded exparte u/s.144 of the IT Act. 3.6. As per the directions issued by Joint Commissioner ofIncome Tax, Vellore Range, the assessment proceedings wereconcluded holding that as on 17.06.2016, the account balance ofthe assessee was Rs.1,116/-; if the assessee was really havingan opening cash balance of Rs.2,60,000/-, there is no need totake a jewel loan on 17.06.2016 of Rs.3,00,000/-. Theexplanation given by the assessee that the cash deposited duringthe demonetization period made out of cash in hand which wasmore than four months, for Rs.11,10,000/- is considered asdevoid of any facts and against human probability. 3.7. Since the Assessing Officer came to the conclusion thatthe cash deposits in the bank brought to tax u/s.69A of the ITAct as the unexplained money of the assessee, it was brought totax u/s.69A of the Act and penalty proceedings u/s.271AAC of theAct was initiated. Further Penalty proceedings u/s. 272A(1)(d)of the Act was issued for failure to comply with the noticedated 30.11.2017 issued under section 142(1) of the IT Act; forfailure to comply with the provisions of Section 139(1) of theAct, penalty proceedings u/s.271F of the Act was also initiated.The income chargeable to tax was assessed as Rs.11,20,500/-. 4. Aggrieved by the said order dated 09.10.2019 passed byITO, Ward-2, Tiruvannamalai, the appellant/assessee has filedW.P.No.33157 of 2019 before this court, raising the ground thatthe order passed by the respondent is in violation of principlesof natural justice and without giving notice and personalhearing and without jurisdiction. 5.1. The learned counsel for the appellant/assessee wouldsubmit that the learned Single Judge has failed to see that evenif any order has been passed without jurisdiction or against theprinciples of natural justice, the aggrieved party even thoughhas got an alternative remedy by way of appeal, there is no barto entertain the writ petition. It is further stated that inresponse to the notice issued under Section 142(1) of the ITAct, appellant opted to file a return and in such circumstances,assessment done u/s.144 of the Act as exparte best judgmentassessment, is totally incorrect. 5.1. The learned counsel for the appellant/assessee wouldsubmit that the learned Single Judge has failed to see that evenif any order has been passed without jurisdiction or against theprinciples of natural justice, the aggrieved party even thoughhas got an alternative remedy by way of appeal, there is no barto entertain the writ petition. It is further stated that inresponse to the notice issued under Section 142(1) of the ITAct, appellant opted to file a return and in such circumstances,assessment done u/s.144 of the Act as exparte best judgmentassessment, is totally incorrect. 5.2. It is stated that in response to the notice dated20.5.2019, the appellant submitted all the relevant materialsand thereafter, no notice has been issued to produce otherdocuments to substantiate the return of income filed by theappellant. 5.3. It is also contended that as soon as return of incomeis filed by the appellant for the assessment year 2017-2018, ifthe assessment officer found it to be incorrect or requiredscrutiny, it can be done by the Assessing Officer, only afterissuing notice under Section 143(2) of the Income Tax Act and nonotice has been issued by the Assessing Officer under Section143(2) of the Income tax Act, but proceeded with the expartebest judgment under Section 144 of the Income Tax Act. 5.4. In support of his submissions, the learned counsel forthe appellant cited the following decisions : (1) (2010) 3 Supreme Court Cases 259 – AssistantCommissioner of Income Tax and another Vs. Hotel Blue Moon (2) [2019] 412 ITR 285 (Mad) – Principal Commissioner ofIncome-tax Vs. J.Jay Tvt. Pvt. Ltd., By placing reliance on the above said two decisions, the learnedcounsel for the appellant/assessee, contended that on the groundthat non issuance of notice under Section 143(2), the matter canbe remitted to the Appellate Authority. 6. Heard the submissions made by the learned counsel for theappellant and perused the records carefully. 7. In the judgment of the Honourable Supreme Court referredto by the appellant counsel reported in (2010) 3 SCC 259 [citedsupra], the facts of the said case is with regard to assessmentof Block assessment and determination of undisclosed income fora block period. Again in the case reported in [2019] 412 ITR 284(Mad) [cited supra], it is seen that the Assessing Officerasked the assessee therein to file the balance-sheet, profit andloss account for the period that ended on March 31, 1995 andproduce the books of account, vouchers etc in respect of therelevant previous year. The assessee filed the return on March30, 1998. Before the Tribunal, the assessee raised theadditional ground for the first time relating to non-issuance ofnotice under Section 143(2). The Tribunal admitted theadditional ground and remanded the matter. But in the case onhand, notice under Section 142(1) was issued on 12.03.2018calling for return of income for the Assessment Year 2017-18.Thereafter, show cause notice was issued to the assessee on20.05.2019 calling for the details of the cash deposit, books ofaccount, financial statements to explain the source. Theassessee submitted letter dated 13.08.2019 and furnished certain details. After appraisal of the facts to the Joint Commissionerof Income Tax, Vellore Range, Vellore, directions were sought asper the provisions of Section 144A of the Income Tax Act, tocomplete the assessment proceedings and thereafter only,Assessment Order was passed, assessing the income of theappellant as Rs.11,20,500/-. details. After appraisal of the facts to the Joint Commissionerof Income Tax, Vellore Range, Vellore, directions were sought asper the provisions of Section 144A of the Income Tax Act, tocomplete the assessment proceedings and thereafter only,Assessment Order was passed, assessing the income of theappellant as Rs.11,20,500/-. 8. In the case on hand, the Income Tax Officer/Respondent,taking into account the fact that the explanation given by theassessee that the cash deposited during the demonetizationperiod made out of cash in hand (which was more than fourmonths) of Rs.11,10,000/- was against human probability and thatthere is no explanation for the source and nature of cashdeposits in the Savings Bank Account, brought the aboveunexplained income to tax under Section 69A of the Income TaxAct, 1961. 9. The learned Single Judge, after considering the facts andcircumstances of the case, without expressing any view on themerits of the matter, disposed of the writ petition, by grantingliberty to the appellant/writ petitioner to file appeal beforethe concerned appellate authority. It shows that theassessee/appellant herein, without availing the appellateremedy, filed the Writ Petition before the writ court.Therefore, the learned Single Judge, directed the writpetitioner/appellant herein to file statutory appeal before theappellate authority, challenging the order passed by theAssessing Officer. Considering the fact that the Act provideseffective and sufficient forum for any aggrieved party to workout their remedy, we do not find any ground or any merit in theappeal. Further, the decisions of the Honourable Supreme Court,relied on by the appellant, would not in any manner advance thecase of the appellant/assessee. Therefore, The Writ Appeal isliable to be dismissed. 10. In the result, for all the above reasons, agreeing withthe view of learned Single Judge, we reject the Writ Appeal. Nocosts. Consequently, connected CMP is closed. Sd/- Assistant Registrar //True Copy// Sub Assistant Registrar To The Income Tax OfficerWard-2Tiruvannamalai. +1cc to Mr.A.P.Srinivas, Advocate, Sr.No.30043+1cc to Mr.P.C.Hari Kumar & Associates, Sr.No.30127 W.A.No.189 of 2020pp (co)rr ii (16/10/2020)