Wp/5458/2024 Of Yogesh Kisan Madake v. Income Tax Officer Ward 13(1) Pune And Ors

IN THE HIGH COURT OF JUDICATURE AT BOMBAYDigitallysigned byPURTIPURTIPRASAD CIVIL APPELLATE JURISDICTIONPRASADPARABPARABDate:2024.05.0318:33:36+0530WRIT PETITION NO. 5458 OF 2024 Yogesh Kisan Madake V/s.Income Tax Officer, Ward 13(1), Pune and Ors. ….Petitioner …Respondents ---- Mr. Tanmay Phadke for Petitioner.Mr. Akhileshwar Sharma for Respondents-Revenue. ---- CORAM : K.R. SHRIRAM & DR. NEELA GOKHALE, JJ. DATED : 30[th] APRIL 2024 P.C. :1.Petitioner is impugning an Assessment Order dated 5[th] February2024 passed under Section 147 read with Sections 144 and 144B of theIncome Tax Act, 1961 (the Act), Demand Notice dated 5[th] February 2024issued under Section 156 of the Act and Penalty Notices dated 5[th] February2024 issued under Section 274 read with Section 270A and 271AAC of theAct for Assessment Year (A.Y.) 2018-19. 2.Petitioner was filing returns for years before the relevantfinancial year. During 2017-18 petitioner sold a residential house forRs.35,00,000/- and paid off liabilities to the extent of Rs.27,00,000/-including housing loan. The balance was about Rs.8,00,000/-. Petitionerdecided to utilize it in the stock market and become millionaire overnight. He not only lost his Rs.8,00,000/- but also lost a further sum ofRs.6,47,559/- because he traded in futures and segment option. Petitionerhit a turnover of Rs.95,87,36,376/-. Petitioner has also lost his job.Mr.Phadke states that petitioner was upset and therefore was not in a properframe of mind even to respond to the notice that he received under Section148A(b) of the Act. Petitioner did not even file the return of income.Mr.Phadke states petitioner only woke up when he received the AssessmentOrder because he had not even bother to respond to the notice dated 27[th]March 2023 issued under Section 148 of the Act which was preceded by anorder dated 27[th] March 2023 issued under Section 148A(d) of the Act.Petitioner did not respond to the multiple notices issued under Section142(1) of the Act. In view of the total non co-operation or lack of responsefrom petitioner the Assessment Order came to be passed adding the entireturnover of Rs.95,87,36,376/- as petitioner’s income. In the affidavit inreply it is admitted that the entire receipt has been taken as the income ofassessee and that was because the Assessing Officer (A.O.) had no materialto know the cost involved. 3.Mr. Sharma submitted that in view of petitioner’s conduct, thiscourt should not exercise its jurisdiction under Article 226 of theConstitution of India and petitioner should be directed to file an appealbefore the Commissioner of Income Tax (Appeal). 4.Though we find petitioner’s conduct not acceptable, still in thefacts and circumstances of this case we shall not direct petitioner to file anappeal and thereby exhaust the alternate remedy. This is because in nocircumstances can the entire receipt could have been treated as the incomeof assessee. Moreover, Mr. Phadke submitted that the tax demand is inexcess of Rs.81 Crores and the appellate authority for stay will insist onpetitioner depositing 20% which would be in excess of Rs.16 Crores. 5.Therefore, in our view since the Assessment Order as passedcould not have been passed treating the entire receipt as income ofpetitioner, we hereby quash and set aside the Assessment Order dated 5[th]February 2024. We also quash and set aside the orders passed underSection 148A(d) of the Act and also the notice issued under Section 148 ofthe Act. The Notice of Demand issued under Section 156 of the Act andPenalty Notice issued under Section 274 read with Section 270A and271AAC of the Act both dated 5[th] February 2024 are also quashed and setaside. 5.Therefore, in our view since the Assessment Order as passedcould not have been passed treating the entire receipt as income ofpetitioner, we hereby quash and set aside the Assessment Order dated 5[th]February 2024. We also quash and set aside the orders passed underSection 148A(d) of the Act and also the notice issued under Section 148 ofthe Act. The Notice of Demand issued under Section 156 of the Act andPenalty Notice issued under Section 274 read with Section 270A and271AAC of the Act both dated 5[th] February 2024 are also quashed and setaside. 6.Petitioner within seven working days of receiving an intimationof opening of portal file reply/objections to the notice dated 7[th] February2023 issued under Section 148A(b) of the Act. The A.O. by 31[st] July 2024shall pass the order under Section 148A(d) of the Act after giving personalhearing to petitioner, notice whereof shall be communicated atleast sevenworking days in advance. 7.Petition disposed. 8.We clarify that we have not made any observations on themerits of the matter. 9.At the same time, in our view this is a case where petitionershould be put to terms. Petitioner shall within two weeks from today pay asum of Rs.50,000/- (Rupees Fifty Thousand Only) as donation to P.M. CaresFund. The account details are as under : Name of the Account : PM CARESAccount Number : 60355358964IFSC : MAHB0001160 Branch : UPSC - New Delhi The proof of payment shall be filed alongwith the reply to be filed by petitioner to the notice issued under Section 148A(b) of the Act. Ifthe same is not filed the A.O. may simply reject all submissions of petitioner and pass such orders as he deems fit in accordance with law. 10.The time spent from issuing of notice dated 7[th] February 2023under Section 148A(b) of the Act until date shall stand excluded incalculating the limitations for passing the Assessment Orders in the case ofpetitioner herein. (DR. NEELA GOKHALE, J.) (K.R. SHRIRAM, J.)