Wtax/1649/2025 Of Pramod Kumar Jain v. Principal Commissioner Of Income Tax And Another

Chief Justice's Court Neutral Citation No. - 2025:AHC:64534-DB Case :- WRIT TAX No. - 1649 of 2025 Petitioner :- Pramod Kumar JainRespondent :- Principal Commissioner of Income Tax and anotherCounsel for Petitioner :- Ashish Bansal, Rama Goel BansalCounsel for Respondent :- Gaurav Mahajan, Manu Ghildiyal Hon'ble Arun Bhansali, Chief JusticeHon'ble Kshitij Shailendra, J. 1. This petition is directed against order dated 12.03.2025 passed byAssistant Commissioner of Income Tax, Circle-2 (1) (1), Agra underSection 143 (3) of the Income Tax Act, 1961 (for short ‘the Act’) for theassessment year 2018-19. 2. The petitioner filed his return for the assessment year 2018-19 on31.10.2018 reflecting an income of Rs.15,94,710/-, which includedbusiness income from his proprietary concern, namely M/s AgarwalDistributor, which it is claimed, is the authorized distributor of ITC andHaldiram snacks. 3. Notice under Section 143(2) of the Act was issued on 22.09.2019after picking up the return for scrutiny and assessment order dated21.04.2021 was passed under Section 143(3) read with Section 144B ofthe Act and against the returned income of Rs.15,94,710/-, assessment wascompleted at an income of Rs.27,27,570/- after adding an amount onaccount of undisclosed income and on account of adhoc disallowancesunder various heads of expenses. 4.Feeling aggrieved of the assessment made on 21.04.2021, petitionerfiled an appeal, which remained pending. During pendency of the appeal,a notice under Section 263 of the Act was issued to the petitioner inter aliaon account of the fact that the petitioner had shown/declared total revenuereceipt at Rs.19,86,02,939/- whereas he had deposited cash amounting toRs.27,85,96,000/- in his bank accounts during the relevant year. Therefore, there being huge difference in the turnover declared and the cashdeposited, regarding which, no inquiry was made by the assessingauthority and as such the petitioner was required to show cause as to whythe assessment order dated 21.04.2021 be not treated as erroneous insofaras the same was prejudicial to the interest of the revenue. 5.The petitioner filed his response to the notice under Section 263 ofthe Act. However, on 20.03.2024, the respondent no.1-PrincipalCommissioner of Income Tax, Agra (PCIT) came to the conclusion thatthe order dated 21.04.2021 passed by the assessing officer was erroneousas the same was passed without making inquiries/investigation and partlyset aside the assessment order. The PCIT was of the opinion that thecontention of the assessee in respect to the difference in turnover disclosedtowards cash deposits and the bank accounts cannot be accepted withoutverification/examination of the books of accounts of the assessee. 6.Pursuant to the order passed under Section 263 of the Act, thepetitioner was issued notice under Section 142(1) requiring him to submitvarious informations with regard to the turnover declared and the cashdeposited and to explain reasons as to why the cash deposits be not treatedas unexplained cash credits under Section 68 or unexplained money underSection 69A of the Act. 7.The petitioner filed his response to the notice and claimed that FormGSTR-9C and Form 52 under GST/VAT Act demonstrate that the amountof turnover as disclosed in the audited financial statements and GSTR-9Cwas Rs.19,86,02,939/- and the amount of VAT paid for the period01.04.2017 to 30.06.2017 was Rs.14,93,216/- and, therefore, the aggregateof sales and VAT/GST including Cess came to Rs.32,85,97,908/-, whichcovered the amount deposited in the bank. Further details/documentssought from the petitioner, were supplied. 8.Further show cause notice dated 28.01.2025 was issued with regardto unexplained cash under Section 68 and unexplained money underSection 69A regarding their addition to the total income of the petitioner, 7.The petitioner filed his response to the notice and claimed that FormGSTR-9C and Form 52 under GST/VAT Act demonstrate that the amountof turnover as disclosed in the audited financial statements and GSTR-9Cwas Rs.19,86,02,939/- and the amount of VAT paid for the period01.04.2017 to 30.06.2017 was Rs.14,93,216/- and, therefore, the aggregateof sales and VAT/GST including Cess came to Rs.32,85,97,908/-, whichcovered the amount deposited in the bank. Further details/documentssought from the petitioner, were supplied. 8.Further show cause notice dated 28.01.2025 was issued with regardto unexplained cash under Section 68 and unexplained money underSection 69A regarding their addition to the total income of the petitioner, which was responded by the petitioner inter alia claiming that the stocksold was under the category of FMCG and hence it was not possible forthe petitioner to maintain the stock records, however, purchase invoicesalong with transportation receipts were filed to demonstrate the possessionof stock. 9.By order impugned dated 12.03.2025, the plea raised by thepetitioner seeking to explain the cash receipts, was not accepted and thedemand impugned was raised. 10. Learned counsel for the petitioner made vehement submissions thatrespondent no.2 was not justified in rejecting the explanation provided bythe petitioner. Submissions have been made that the material produced,clearly explain the excess of cash deposits from the turnover declaredinasmuch as the excess deposits pertaining to the amount of VAT/GSTcollected by the petitioner, which was not part of the turnover and despiteproducing requisite documents in support thereof, the plea has beenrejected and, therefore, the order impugned deserves to be quashed and setaside. 11.Learned counsel for the respondents vehemently opposed thesubmissions. Submissions have been made that the PCIT had passed orderunder Section 263 of the Act on noticing that the difference in turnoverand cash deposits was accepted without verification and examination ofbooks of accounts of the assessee, which was prejudicial to the interest ofthe revenue. The order was not questioned and once after a detailedinvestigation, the assessing officer has come to the conclusion that thepetitioner has failed to explain the deposit of excess cash, no interferenceis required in the order impugned. Further submissions have been madethat the petitioner has an alternative remedy of appeal under the provisionsof the Act and there is apparently no reason for bypassing of said remedyof appeal and, therefore, the petition deserves dismissal. 12. We have considered the submissions made by counsel for the partiesand have perused the material available on record. "Having purchase invoices and transportation receipts does notprove beyond doubt that physical stock was actually held. Furtherthe assessee has only admitted that even stock registers are notmaintained. Assessee’s failure to produce proof of deposit ofGST/VAT/Cess in Govt account in the garb of ITC also renders thegenuineness of said sales as unproven, as again the purchases onwhich ITC is claimed are unproven. Hence, it is established that thedifferential amount of Rs.7,99,93,061/- between cash deposited inbank account and turnover/sales shown is nothing but unaccountedsales/undisclosed income and is hereby added to the total income asunexplained money u/s 69A of the I.T. Act, 1961.” 14.The determination made by the authority is based on the materialavailable on record. The view taken by the authority is open to appeal. Thepetitioner with regard to the availability of alternative remedy, has madecursory submissions indicating in para 26 of the petition that there is noalternative much less efficacious remedy available to the petitioner but toapproach this Court and invoke its extraordinary jurisdiction under Article226 of the Constitution of India. 14.The determination made by the authority is based on the materialavailable on record. The view taken by the authority is open to appeal. Thepetitioner with regard to the availability of alternative remedy, has madecursory submissions indicating in para 26 of the petition that there is noalternative much less efficacious remedy available to the petitioner but toapproach this Court and invoke its extraordinary jurisdiction under Article226 of the Constitution of India. 15.The parameters for exercising jurisdiction under Article 226 of theConstitution of India are well settled, wherein it can be exercised sparinglyand only in exceptional circumstances despite availability of statutoryremedy. Recently, Hon’ble Supreme Court in Jaipur Vidyut VitranNigam Limited vs. MB Power (MP) Limited : (2024) 8 SCC 513, afterreferring to the judgement in Radha Krishan Industries vs. State of H.P.: (2021) 6 SCC 771, has laid down that though availability of analternative remedy is not a complete bar in the exercise of power ofjudicial review by the High Courts, the recourse to such a remedy wouldbe permissible only if extraordinary and exceptional circumstances aremade out. It was observed that when a right is created by a statute, whichitself prescribes the remedy or procedure for enforcing the right orliability, resort must be had to that particular statutory remedy beforeinvoking the discretionary remedy under Article 226 of the Constitution ofIndia. 16.In the present case, the petitioner has failed to point out anyextraordinary and exceptional circumstance for bypassing the statutoryalternative remedy. Neither there has been a failure of principles of naturaljustice nor it is the case of the petitioner that proceedings were withoutjurisdiction, which are the grounds under which the bar of statutoryremedy does not come in the way of entertaining the petitions underArticle 226 of the Constitution of India. 17.In view of above discussion, we do not find any reason to invokeour extraordinary jurisdiction in the present case. The petition is, therefore,dismissed, leaving it open for the petitioner to avail alternative remedy inaccordance with law. Order Date :- 17.4.2025RK/ (Kshitij Shailendra, J) (Arun Bhansali, CJ)