Case Law Details
Katiyar Cold Storage Private Limited Vs Union of India And 2 Others (Allahabad High Court)
The petitioner challenged the jurisdictional notice issued under Section 148 of the Income Tax Act, 1961, and the reassessment proceedings initiated on the basis of information relating to cash deposits. During the hearing, the Court considered the counter affidavit filed by the Income Tax Department, which explained that the Assessing Authority had received information from the bank through Form 61A regarding cash deposits.
According to the counter affidavit, there was an error in the uploaded information. A cash deposit of ₹2,06,58,500 had been uploaded six times, resulting in an incorrect aggregate figure of ₹12,39,51,000. In addition, there was separate information regarding another cash deposit of ₹10,63,500, bringing the total reported deposits to ₹12,50,14,500. The Department clarified that the amount of ₹12,39,51,000 actually represented repeated reporting of the same cash deposit of ₹2,06,58,500 in the Union Bank of India account.
After considering the material on record, the Court observed that the Assessing Authority possessed information regarding a cash deposit of ₹2,06,58,500 and that such information was neither irrelevant nor unfounded. The Court also referred to its earlier order dated 05.05.2022, in which it had prima facie observed that the reasons recorded by the Assessing Authority were based on relevant material indicating possible escapement of income. Consequently, the Court had held that the jurisdictional notice issued under Section 148 could not, at that stage, be regarded as being without jurisdiction.
Upon final consideration, the Court reaffirmed that the existence of information relating to the cash deposit of ₹2,06,58,500 constituted relevant material for the Assessing Authority to form the requisite belief. Therefore, the impugned notice under Section 148 could not be held to be without jurisdiction.
Finding no merit in the writ petition, the Allahabad High Court dismissed it. However, the Court granted liberty to the petitioner to challenge the reassessment order dated 29.03.2022 by filing an appeal under Section 246A of the Income Tax Act, if so advised. The Court further directed that if such an appeal was filed within three weeks from the date of the judgment along with a certified copy of the order, the appellate authority should entertain the appeal without raising any objection regarding limitation.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
Heard Sri Abhinav Mehrotra, learned counsel for the petitioner and Sri S.P. Singh, learned Additional Solicitor General of India, assisted by Sri Dinesh Varun, learned counsel for the respondent no.1 and Sri Manu Ghildyal, learned counsel for the Income Tax Department.
This writ petition was heard at length on 23.03.2022, 04.04.2022 18.04.2022 and 05.05.2022.
On 05.05.2022, this Court passed following order:-
“Heard Sri Abhinav Mehrotra, learned counsel for the petitioner and Sri S.P. Singh, learned Additional Solicitor General of India for the respondent no.1 and Sri Manu Ghildyal, learned counsel for the respondent nos. 2, 3 & 4.
Counter affidavit on behalf of respondent nos. 2, 3 & 4, dated 04.05.2022 has been filed today by Sri Manu Ghildyal, which is taken on record.
Counter affidavit by respondent no.1 has not been filed despite our order dated 18.04.2022.
As per counter affidavit the information in possession of the Assessing Authority was of cash deposit as uploaded by the bank in Form 61 A. There was some error inasmuch as the cash deposit was of Rs.2,06,58,500/- which was uploaded six times and thus the total amount resulted in an amount of Rs.12,39,51,000/-. That apart, there was another information in possession of Assessing Authority regarding cash deposit of Rs.10,63,500/-. Thus, the total amount of deposit shown of Rs.12,50,14,500/-. However, the aforesaid information of cash deposit in Union Bank of India of Rs.12,39,51,000/- was infact the information of cash deposit of Rs.2,06,58,500/-.
Thus, prima facie it appears that the assessing authority has recorded reasons to believe based on relevant materiel in his possession indicating escapement of income from Tax. Thus, in view of the law summarised by this Court on the point of issuance of jurisdictional notice and assumption of jurisdiction under Section 148 of the Act, 1961, in Writ Tax No.518 of 2022 (Uphill Farms Private Limited Vs. Union Of India and Another) decided on 25.04.2022, the impugned notice under Section 148 of the Act, 1961 prima facie can not be said to be without jurisdiction.
Learned counsel for the petitioner prays for and is granted three days’ time to file rejoinder affidavit.
Put up as a fresh case before the appropriate Bench on 09.05.2022.”
Rejoinder affidavit dated 09.05.2022 has been filed today, which is taken on record.
We have carefully considered the submissions of the learned counsel for the parties and we find that assessing authority has information about cash deposit of Rs. 02,06,58,500/- which was not irrelevant or unfounded. Thus, the impugned jurisdictional notice under section 148 of the Income Tax Act, 1961 cannot be said to be without jurisdiction.
For the reasons aforestated, we do not find any merit in this writ petition. Consequently, the writ petition is dismissed with liberty to the petitioner to challenge the impugned reassessment order dated 29.03.2022 in Appeal under Section 246A of the Income Tax Act, 1961, if so advised. If such an appeal is filed by the petitioner within three weeks from today along with a certified copy of this order, then it shall be entertained by the appellate authority without raising any objection as to limitation.
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