Smt. Santhana Narayanan Kiruthika Vs Assessment Unit Income Tax Department (Madras High Court)
Chennai: The Madras High Court has set aside an income tax assessment order against a teacher who contended that the bank transactions questioned by the tax department were the result of her account being fraudulently misused by a former bank manager. The court directed the Income Tax Department to conduct a fresh assessment after giving the teacher a proper opportunity to present her defense and supporting documents related to the alleged fraud.
The petitioner, Smt. Santhana Narayanan Kiruthika, faced income tax scrutiny following unexplained cash deposits and transfers detected in her savings bank account. She maintained that these transactions were unauthorized, carried out by the then manager of her Indian Bank branch without her knowledge. Importantly, she had initiated criminal proceedings against the manager for account mishandling, filing a police complaint in 2021, which led to a criminal case being registered.
The Income Tax Department’s proceedings began later, with a notice under Section 148 of the Income-tax Act, 1961, issued in March 2024. The petitioner responded to subsequent notices but sought additional time to reply to a show-cause notice dated February 10, 2025. She was attempting to obtain complete details of the alleged fraudulent transactions through the Right to Information (RTI) Act to fully explain her position. However, the tax authorities proceeded to pass the assessment order on March 4, 2025, ahead of the March 31 deadline and without granting the requested extension or sufficient opportunity.
