Wp(C)/23704/2022 Of Abraham Thomas v. Income Tax Officer

IN THE HIGH COURT OF KERALA AT ERNAKULAMPRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. WEDNESDAY, THE 27 DAY OF JULY 2022 / 5TH SRAVANA, 1944WP(C) NO. 23704 OF 2022 PETITIONER: ABRAHAM THOMASAGED 62 YEARSG-80, PANAMPILLY NAGAR P.O., PANAMPILLY NAGAR, KOCHI, ERNAKULAM - 682 036, KERALA,REPRESENTED BY HIS POWER OF ATTORNEY HOLDER JIBY ANTONY, RESIDING AT PADALODIYIL, KALLUVAYAL P.O., IRUTTY, KERALA - 670 703. BY ADVS. ANIL D. NAIR TELMA RAJU EDATHARA VINEETA KRISHNAN P.K.BIJU RESPONDENT: INCOME TAX OFFICERNON CORP. WARD (1), KOCHI - 682 018. OTHER PRESENT: SRI. CHRISTOPHER ABRAHAM (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON27.07.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: JUDGMENT The petitioner has approached this Court beingaggrieved by Ext.P5 order issued under Section 148 A of theIncome Tax Act. The brief facts of the case are that thepetitioner is a non-resident Indian. During the assessmentyear 2015-2016, the petitioner purchased an immovableproperty in Tuticorin, Tamil Nadu for a total consideration ofRs.1.82 crores. Owing to the provisions contained in theTamil Nadu Stamp (Prevention of under valuation ofinstruments) Act 1968, the value of the property for thepurposes of determination of stamp duty was taken to beRs.2.29 crores. On the basis of information received by thedepartment, a notice was issued to the petitioner on findingthat the petitioner had not filed his return of income for therelevant assessment year. The petitioner filed a reply to thenotice pointing out that he was a non-resident Indian and wastherefore not required to furnish his return of Income underthe provisions of the Income Tax Act. He stated that theactual consideration for the purchase of property was Rs.1.82 WP(C) NO. 23704 OF 2022 3 crores and the amount of Rs.2.29 crores only represented thevalue considered for the purposes of determining the stampduty payable. He submitted that there is no escapement ofincome warranting the initiation of proceedings underSection 148. 2.The learned counsel appearing of the petitionerstates with reference to the pleadings and the grounds raisedin the writ petition that the difference in the stamp dutycannot be treated as income in the hands of the petitionerand therefore the proceedings under Section 148 of the The learned counsel appearing of the petitioner Income Tax Act are illegal. It is submitted that theproceedings are therefore without jurisdiction and are liableto be quashed under Article 226 of the Constitution of India. 3.The learned Standing Counsel appearing for therespondent department would very fairly state that theprovisions of Section 56(2)(x) of the Income Tax Act as theynow stand were not applicable for the assessment year 2015-2016 and in that view of the matter the difference in theactual consideration paid and the amount of stamp dutyshown for the purposes of valuation cannot be taxed in the ats hands of the petitioner for the assessment year 2015-2016. 4.Having heard the learned counsel for the petitionerand the learned Standing Counsel for the department, I am ofthe view that Ext.P5 proceedings and consequently Ext.P6notice under Section 148 of the Income Tax Act cannot besustained for the reason that there cannot be any escapementof income warranting excise of power under Section 148 forthe assessment year 2015-2016, especially since theprovisions of Section 56(2)(x) of the Income Tax Act as theynow stand were not applicable for the assessment year 2015-2016. This writ petition is therefore allowed and Exts.P5 andP6 will stand quashed. Sd/- GOPINATH P.JUDGE WP(C) NO. 23704 OF 2022 5 APPENDIX OF WP(C) 23704/2022 PETITIONER EXHIBITS ats hands of the petitioner for the assessment year 2015-2016. 4.Having heard the learned counsel for the petitionerand the learned Standing Counsel for the department, I am ofthe view that Ext.P5 proceedings and consequently Ext.P6notice under Section 148 of the Income Tax Act cannot besustained for the reason that there cannot be any escapementof income warranting excise of power under Section 148 forthe assessment year 2015-2016, especially since theprovisions of Section 56(2)(x) of the Income Tax Act as theynow stand were not applicable for the assessment year 2015-2016. This writ petition is therefore allowed and Exts.P5 andP6 will stand quashed. Sd/- GOPINATH P.JUDGE WP(C) NO. 23704 OF 2022 5 APPENDIX OF WP(C) 23704/2022 PETITIONER EXHIBITS Exhibit P1TRUE COPY OF THE NOTICE DATED 31/03/2022 PASSED BY THE RESPONDENT FOR THE A.Y.2015-16.THE RESPONDENT FOR THE A.Y.2015-16. Exhibit P2TRUE COPY OF THE LETTER DATED 18/04/2022 SUBMITTED BY THE PETITIONER.BY THE PETITIONER. Exhibit P3TRUE OF LETTER DATED 19/4/2022 ISSUED BY THE RESPONDENT.RESPONDENT. Exhibit P4TRUE COPY OF THE REPLY DATED 25/04/2022 SUBMITTED BYTHE PETITIONER ALONG WITH ACKNOWLEDGMENT.THE PETITIONER ALONG WITH ACKNOWLEDGMENT. Exhibit P5TRUE COPY OF THE ORDER DATED 06/05/2022 ISSUED BY THE RESPONDENT.THE RESPONDENT. Exhibit P6TRUE COPY OF THE NOTICE UNDER SEC.148 A DATED 06/05/2022 PASSED BY THE RESPONDENT.06/05/2022 PASSED BY THE RESPONDENT. RESPONDENTS’ EXHIBITS: NIL