Wp(C)/4727/2017 Of Sri.rajan.m.a v. Income Tax Officer, Ward-2(4), Thrissur

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN MONDAY, THE 20TH DAY OF FEBRUARY 2017/1ST PHALGUNA, 1938 WP(C).No. 4727 of 2017 (M) --------------------------- PETITIONER(S)/PETITIONER:------------------------ SRI.RAJAN M.A., PROPRIETOR, ML LONAPPAN HARDWARE MERCHANT, HIGH ROAD, THRISSUR 680001. BY ADVS.SRI.ANIL D. NAIR SRI.R.SREEJITH KUM.SOUMYA PRAKASH KUM.MEKHALA M.BENNY SRI.JOSEPH GOPURAN RESPONDENT(S)/RESPONDENTS: -------------------------- INCOME TAX OFFICER, WARD-2(4), THRISSUR, PIN-680001. BY ADVS. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX SRI.K.M.V.PANDALAI, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20-02-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX PETITIONER(S)' EXHIBITS ----------------------- EXHIBIT P1 TRUE COPY OF THE STATEMENT RECORDED ON 22/10/2013EXHIBIT P2 TRUE COPY OF THE STATEMENT RECORDED ON 23/10/2013EXHIBIT P3 TRUE COPY OF LETTER DTD 14/3/2014 SUBMITTED BY THE PETITIONER EXHIBIT P4 TRUE COPY OF THE NOTICE DTD 1/12/2016 OF THE RESPONDENTEXHIBIT P5 TRUE COPY OF LETTER DTD 9/12/2016 SUBMITTED BY THE PETITIONER TO THE RESPONDENTEXHIBIT P6 TRUE COPY OF LETTER DTD 26/12/2016 SUBMITTED BY THE PETITIONER TO THE RESPONDENTEXHIBIT P7 TRUE COPY OF THE AUDITED REPORT UNDER KVAT ACTEXHIBIT P8 TRUE COPY OF THE ORDER DTD 28/12/2016 OF THE RESPONDENTRESPONDENT(S)' EXHIBITS----------------------- NIL TRUE COPY P.S. TO JUDGE K. VINOD CHANDRAN, J - - - - - - - - - - - - -- - - - - - - - - - - - - - - - W.P(C) No. 4727 of 2017 - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 20[th] day of February, 2017 J U D G M E N T The petitioner is aggrieved with the assessment order passed at Ext.P8. Ideally the petitioner ought to haveagitated the cause before the appellate authority.However, the petitioner's contention is that an inspectionconducted by the Inspector, as deputed by the Assessing Officer itself disclosed the value of stock far below thanthat has been assessed under Ext.P8. 2. I have heard the learned Counsel for thepetitioner and the learned Standing Counsel for theDepartment. 3. The petitioner's contention is based on an WPC.No.4727/2017 inspection carried out by the Inspector deputed by theAssessing Officer at the stage of assessment proceedings.It is seen that the value of stock as reported by theInspecting Officer was only Rs.2 crores. The learnedStanding Counsel for the Department however, submitsthat earlier at the time of survey a statement was recordedunder Section 133 A of the Income Tax Act, 1961 on22.10.2013 which even by binding precedents cannot berelied on by the Assessing Officer. However, subsequentlythe assessee appeared along with an authorisedrepresentative; a Chartered Accountant before theAdjudicating Officer and conceded a stock of Rs.10 crores.It is based on this that the assessment was completed. 4. In any event, there is no procedure by which WPC.No.4727/2017 an inspection could have been carried out through another Inspector after the survey and during the course ofassessment. The Assessing Officer unnecessarily gave ahandle to the assessee to challenge the assessmentproceedings on that ground. The inspection subsequentlyconducted and the report filed, is not one permitted bystatute. There can be no reliance placed on it to interferewith Ext.P8 under Article 226. 5. It is also to be noticed that after a voluntary statement made under Section 131 before the AdjudicatingOfficer, the petitioner has challenged the same with astatement of stock as produced at Ext.P5. The inspectionconducted by the Inspector deputed by the AssessingOfficer was subsequent to the survey and in the course of WPC.No.4727/2017 WPC.No.4727/2017 an inspection could have been carried out through another Inspector after the survey and during the course ofassessment. The Assessing Officer unnecessarily gave ahandle to the assessee to challenge the assessmentproceedings on that ground. The inspection subsequentlyconducted and the report filed, is not one permitted bystatute. There can be no reliance placed on it to interferewith Ext.P8 under Article 226. 5. It is also to be noticed that after a voluntary statement made under Section 131 before the AdjudicatingOfficer, the petitioner has challenged the same with astatement of stock as produced at Ext.P5. The inspectionconducted by the Inspector deputed by the AssessingOfficer was subsequent to the survey and in the course of WPC.No.4727/2017 the assessment proceedings, during which period theassessee could very well have removed the items which were in his establishment. In such circumstance, this Court does not find any warrant to rely on a report of asubsequent inspection conducted, which was absolutelyunwarranted. 6. The petitioner hence would be left remedy toappeal against the assessment order. The appellateauthority would decide the issue untrammelled by theobservations made herein but however not placing anyreliance on the inspection report. Writ petition is disposed of. No costs. jma Sd/= (K. VINOD CHANDRAN, JUDGE)//true copy//P.A to Judge