Wp(C)/31707/2022 Of Best Steel Traders v. The Deputy Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH THURSDAY, THE 30 DAY OF NOVEMBER 2023/9TH AGRAHAYANA, 1945 WP(C) NO. 31707 OF 2022 PETITIONER: BEST STEEL TRADERS,7-228, K M SQUARE, PALACHUVADU KAKKANAD COCHIN, REPRESENTED BY ITS MANAGING PARTNER SHIJU.V.S, PIN – 682030 BY ADVS.ANIL D. NAIRTELMA RAJUP.K.BIJUEDATHARA VINEETA KRISHNANA.ANJANA RESPONDENT: THE DEPUTY COMMISSIONER OF INCOME TAX,CENTRAL CIRCLE-2, M.G. ROAD, KOCHI, PIN – 682011BY ADVS.JOSE JOSEPH, SC, INCOME TAX DEPARTMENT, KERALASRI. P.K.RAVINDRANATHA MENON (SR.)SRI. NAVANEETH.N.NATHSRI. SUSIE B VARGHESE(K/1300/2019), STANDING COUNSEL THIS WRIT PETITION (CIVIL) HAVING COME UP FORADMISSION ON 30.11.2023, THE COURT ON THE SAME DAYDELIVERED THE FOLLOWING: JUDGMENT Heard Smt.Telma Raju, the learned counsel for the petitioner and Smt. Susie B. Varghese, Senior StandingCounsel for the Income Tax Department. 2.The present writ petition has been filed by thepetitioner assessee impugning Ext.P9 assessment orderdated 02.09.2022 in respect of the assessment year2020-21. The petitioner is a partnership firm. Thepetitioner assessee filed return of its income dated15.02.2021 for the assessment year 2020-21. Thepetitioner assessee's return was selected for scrutiny. Asearch/survey under Section 132A of the Income TaxAct, 1961 was conducted in the case of Olive BuildersGroup, Kochi on 16.05.2019. During the search, it wasnoticed that the said Olive Builders had madeunaccounted cash payments to contractors andsuppliers. The petitioner firm was the main steelsupplier of Olive Builders group. Accordingly, a survey W.P.(C.) No.31707/2022 under Section 133A of the Income Tax Act, 1961 wasundertaken at the building premises of the petitioner on30.07.2019. At the time of assessment proceedings, thepetitioner had discontinued the steel trading businessand got engaged in Battery Lead manufacturing andtrading for its sister concern, namely M/s. Best Smelterssituated at Kanjikode, Palakkad. 3.There were several unaccounted receipts,including one of Rs. 92,00,827/-, which was received inthe bank account of the petitioner and was reflected inthe excel sheet recovered with regard to theunaccounted cash transaction from Lead SmeltingBusiness. The learned counsel for the petitioner submitsthat this excel sheet was not put to the petitioner forexplanation and therefore, the petitioner could notexplain the said cash receipt of Rs.92,00,824/-.However, in paragraph 6 of the assessment order, it isrecorded that the assessee was required to explain this W.P.(C.) No.31707/2022 cash receipt of Rs.92,00,824/- vide notice dated20.01.2022 to which the assessee had given vaguereply/explanation. The Assessing Authority finds thatthere were clear evidence of receipts in cash in theExcel Sheet maintained by the assessee firm, the saidamount was taken as undisclosed sales and accordingly,an amount of Rs.92,00,824/- was added to the totalincome of the petitioner. 4.Considering the said finding recordedregarding the issuance of notice and reply given by thepetitioner, I do not find that there is any substance inthe submission on the part of the learned counsel forthe petitioner, that the said Excel Sheet was not put tothe notice of the petitioner for explanation. Be that is itmay, the petitioner has a remedy before the AppellateAuthority against the assessment order, and this Courtin exercise of its jurisdiction under Article 226 of theConstitution of India would not examine the assessment W.P.(C.) No.31707/2022 order on merits as this Court does not find that there has been any violation of the principles of naturaljustice as contended by the learned counsel for thepetitioner. Thus, this writ petition is dismissed with liberty to the petitioner to approach the Appellate Authority, if soadvised and if the appeal is filed, the same shall bedecided in accordance with law. W.P.(C.) No.31707/2022 order on merits as this Court does not find that there has been any violation of the principles of naturaljustice as contended by the learned counsel for thepetitioner. Thus, this writ petition is dismissed with liberty to the petitioner to approach the Appellate Authority, if soadvised and if the appeal is filed, the same shall bedecided in accordance with law. DCS/04.12.2023 Sd/- DINESH KUMAR SINGH JUDGE W.P.(C.) No.31707/2022 6 APPENDIX PETITIONER EXHIBITS EXHIBIT P1 TRUE COPY OF THE NOTICE DATED 6.12.2021 UNDER SEC.142 (1)ISSUED BY THE RESPONDENT. EXHIBIT P2TRUE COPY OF THE REPLY DATED 9.12.2021 FILED BY THE PETITIONER TO THE RESPONDENT.FILED BY THE PETITIONER TO THE RESPONDENT. EXHIBIT P3TRUE COPY OF THE NOTICE DATED 11.01.2022UNDER SEC.142 (1)ISSUED BY THE RESPONDENT.UNDER SEC.142 (1)ISSUED BY THE RESPONDENT. EXHIBIT P4TRUE COPY OF THE REPLY DATED 17.1.2022 FILED BY THE PETITIONER TO THE RESPONDENT.FILED BY THE PETITIONER TO THE RESPONDENT. EXHIBIT P5TRUE COPY OF NOTICE DATED 1.2.2022 UNDERSEC.142 (1)ISSUED BY THE RESPONDENT.SEC.142 (1)ISSUED BY THE RESPONDENT. EXHIBIT P6TRUE COPY OF THE REPLY DATED 8.2.2022 FILED BY THE PETITIONER TO THE RESPONDENT.FILED BY THE PETITIONER TO THE RESPONDENT. EXHIBIT P7TRUE COPY OF NOTICE DATED 24.08.2022 UNDER SEC.142 (1) ISSUED BY THE RESPONDENT.UNDER SEC.142 (1) ISSUED BY THE RESPONDENT. EXHIBIT P8TRUE COPY OF THE REPLY DATED 29.08.2022 FILED BY THE PETITIONER TO THE RESPONDENT.FILED BY THE PETITIONER TO THE RESPONDENT. EXHIBIT P9TRUE COPY OF ORDER DATED 02.09.2022 ISSUED BY THE RESPONDENT.ISSUED BY THE RESPONDENT.