Madras High Court
Parthasarathy Chitra vs The Income Tax Officer on 14 July, 2022
Author: M.Nirmal Kumar
Bench: M.Nirmal Kumar
W.P(MD).No.10445 of 2022
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 14.07.2022
CORAM
THE HONOURABLE MR.JUSTICE M.NIRMAL KUMAR
W.P(MD).No.10445 of 2022
and
W.M.P(MD).Nos.7515 and 7516 of 2022
Parthasarathy Chitra ... Petitioner
Vs.
The Income Tax Officer,
Ward-1, Tuticorin,
6R, AVM Complex,
North Cotton Road,
Tuticorin-628001. ...Respondent
Prayer : Writ Petition filed under Article 226 of the Constitution of India,
praying this Court to issue a Writ of Certiorari, calling for the records in PAN:
ANUPC5152G and quash the impugned order under Section 148A(d) in
ITBA/AST/F/148A/2022-23/1042767198(1) dated 19.04.2022 passed by the
respondent and the consequential notice issued under Section 148 in
ITBA/AST/S/148-1/2022-23/1042767224(1) dated 19.04.2022 by the
respondent for the AY 2015-16 as illegal, arbitrary, in violation of principles
of natural justice and without jurisdiction.
For Petitioner : Mr.Vandana Vyas
For Respondent : Mr.N.Dilip Kumar
Standing Counsel
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W.P(MD).No.10445 of 2022
ORDER
The contention of the petitioner is that the petitioner is a home maker and has been regularly filing her return of income from the Assessment Year 2016-2017 to 2021-2022. The petitioner was in receipt of the notice under Section 148 A (a) of the IT Act, dated 21.03.2022 informing that the petitioner had not filed her return of income for the Assessment Year 2015-2016. As per NMS information in the Insight Portal various transactions are noticed and in respect of the said transactions details were sought to be filed on or before 25.03.2022. In response to the same, the petitioner submitted her response on 24.03.2022 seeking two weeks time to collate the said details. Thereafter, the respondent issued a show cause notice under Section 148 A (b) of the IT Act, dated 26.03.2022 to show cause on or before 31.03.2022 as to why a notice under Section 148 of the IT Act should not be issued. In response to the same, the petitioner on 31.03.2022 had sought for time as the details are being collected from the bankers and it takes time since the details pertains to very old periods. Thereafter, the respondent issued notice on 05.04.2022 informing that the petitioner's request was acceded and granted time till 11.04.2022 for filing reply. Thereafter, the petitioner filed her submissions on 11.04.2022 along with the necesarry documents to substantiate her case. https://www.mhc.tn.gov.in/judis 2/10 W.P(MD).No.10445 of 2022
2. To the utmost shock and surprise of the petitioner, the respondent passed the impugned order under Section 148 A (d) of the IT Act, dated 19.04.2022 stating that the petitioner has not filed any reply on or before 11.04.2022. The petitioner sent a reply on 11.04.2022. It is seen from the reply as well as uploading of the documents received from IOB Pearl City and three documents from IOB Chidambara Nagar and ICICI and a document from Shares Profit and Loss Account. Further, in the reply petitioner submitted that the bank deposits out of the renewals from the old existing bank fixed deposits.
3. The sources for these fixed deposits were from family partitions during the year 2002 as well as from Stridhana that is money given by her father and relatives at the time of her marrriage in the year 1991. Her savings made out of household expenses given to the petitioner by her husand and various gifts received from her family members during various occassions like birthday, wedding anniversary, Diwali, Pongal etc. These deposits were initially opened in Indian Overseas Bank, Tuticorin. Thereafter, the petitioner shifter her residence from Tuticorin to Chennai. Then, the petitioner opened fresh deposits in Chennai Indian Overseas Bank. The sale and purchase of equity share in recognised stock exchange stated that the sale of shares are out https://www.mhc.tn.gov.in/judis 3/10 W.P(MD).No.10445 of 2022 of the holdings for more than 12 months, which is exempted in terms of Section 10 (38) of the IT Act, 1961.
4. The petitioner submitted that the respondent failed to consider the petitioner's reply as per Section 149 (1) (a) of the IT Act, no notice under Section 148 of the IT Act shall be issued beyond three years if the income chargeable to tax, which has escaped assessment is below Rs.50,00,000/-. In the present case, it can be seen from the reply, dated 11.04.2022 that the income which has escaped assessment is less than Rs.50,00,000/-, which clearly prove that the respondent failed to consider the petitioner's reply. The petitioner relies on the decision of the Hon'ble Delhi Court in Divya Capital One Private Limited Vs ACIT reported in (2022) 139 taxmann.com 461 (Delhi).
5. The respondent in a hastily manner to conclude the proceedings under Section 148 A (b) of the IT Act, the time limit to submit the reply to the show cause notice shall not be less than 7 days but not exceeding 30 days from the date on which such notice issued. In this case, the show cause notice issued on 26.03.2022 and therefore time limit of 30 days is till 26.04.2022. Thereafter, the respondent hastily passed the impugned order on 19.04.2022. The time limit was available till 31.05.2022.
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6. In view of the above, the petitioner seeks that the impugned order under Section 148A(d) of the IT Act in ITBA/AST/F/148A/2022-23/ 1042767198(1), dated 19.04.2022 and under Section 148 of the IT Act in ITBA/AST/S/148-1/2022-23/1042767224(1), dated 19.04.2022 are liable to be quashed. In the event, the Assessing Officer wants certain clarifications, the petitioner is willing to give response for the required information, it shall be at liberty to give a supplementary notice. The petitioner shall be given an opportunity of personal hearing before any order passed against her.
7. The learned Standing Counsel for the respondent submits that the NMS information available in the Insight Portal of the Income Tax Department that Smt.Parthasarathy Chitra, involved in the following value of transactions during the financial year 2014-2015.
S.No. Information description Value (Rs.)
1 Received interest other than interest on securities 58,197
2 Time deposit exceeding Rs.2,00,000/- with a banking 65,54,036
company
3 Received interest other than interest on securities 48,423
4 Sale of equity share in a recognised stock exchange 14,86,577
5 Purchase of equity share in a recognised stock 12,57,290
exchange
6 Received interest other than interest on securities 4,77,111
7 Time Deposit exceeding Rs.2,00,000/- with a banking 31,13,262
company
8 Sale of equity share in a recognised stock exchange 49,312
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W.P(MD).No.10445 of 2022
On Verification of the records, it was found that the petitioner had not filed the return of income for the financial year 2014-2015 relevant to the assessment year 2015-2016.
8. The petitioner involved in the above values of transactions during the financial year 2014-2015 did not file the return of income relevant to the assessment year 2015-2016. Hence notice under Section 148 A (a) of the Income Tax Act, 1961 was issued to the assessee on 21.03.2022 with the approval of the specified authority calling for details with regard to the above transactions. The petitioner was given an opportunity vide notice under Section 148A(b) of the IT Act issued on 26.03.2022 calling for the sources and details/evidences with regard to value of transactions made during the financial year 2014-2015 on or before 31.03.2022. The petitioner filed a submission on 31.03.2022 requesting further time of one week to furnish the details. As requested by the petitioner, further time up to 11.04.2022 was given to furnish the details electronically in e-proceedings facility through the account in case history/notings page in the Income Tax Business Application Portal.
9. It is submitted that no reply/submission of the petitioner was available in the case history/noting page in the Income Tax Business https://www.mhc.tn.gov.in/judis 6/10 W.P(MD).No.10445 of 2022 Application Portal till 11.04.2022. Therefore, the Assessing Officer was satisfied that this is a fit case for issue of notice under Section 148 of the IT Act. The approval of the Specified Authority was obtained and order under Section 148 A (d) of the Income Tax Act was passed on 19.04.2022. Notice under Section 148 of the Income Tax Act was also issued on 19.04.2022 for the assessment year 2015-2016. It was found that the necessary documents, which the petitioner stated to have submitted on 11.04.2022 is not available. With regard to the petitioner's submission on the merits of the case stated that the time deposits were made out of the renewal from the old existing bank fixed deposits.
10. The sale and purchase of equity shares were out of the holding for more than 12 months, which were exempted under Section 10 (38) of the IT Act. The same was not available in the case history and hence it could not be considered. The petitioner was given an opportunity to furnish the submissions on or before 31.03.2022 vide notice under Section 148 A (b) of the IT Act, dated 26.03.2022. As requested by the petitioner, further time up to 11.04.2022 was given to furnish the details. Hence, there was no violation of principles of natural justice.
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11. As per the NMS information, the petitioner made total time deposits of Rs.96,67,298/- during the financial year 2014-2015. Hence, the petitioner's objection that the income for the subject year does not exceed Rs.50,00,000/- in the form of capital assessee is not proper. The order passed under Section 148 A (d) of the Income Tax Act, dated 19.04.2022 was passed after giving opportunity to the petitioner and the notice under Section 148 of the IT Act issued within the time limit prescribed under Section 149 (1) (b) of the Income Tax Act.
12. Considering the submission and perusal of the material, it is seen that the petitioner sent a representation on 11.04.2022. The reply with the documents annexed to it has been uploaded in the Departmental portal. In the reply, the details were given how the petitioner over a period of time made all the fixed deposits initially at Tuticorin and thereafter, at Chennai and further along with the bank statement records uploaded in the portal with hash value. In the order, dated 19.04.2022, there is no reference. It is clearly stated in the impugned order inner page 2 paragraph 4, it is recorded that the petitioner had not sent any reply on or before 11.04.2022 and further in view of the same, nothing has been considered and discussed in the impugned order. Hence, the impugned order is set aside. The petitioner is permitted to file any additional reply and documents in support of their contention in addition to the earlier https://www.mhc.tn.gov.in/judis 8/10 W.P(MD).No.10445 of 2022 reply, dated 11.04.2022. The Assessing Officer is directed to consider the petitioner's reply and give her an opportunity of personal hearing and pass appropriate orders on merits and in accordance with law thereafter.
13. The writ petition stands allowed with the above direction. No costs. Consequently, connected miscellaneous petitions are closed.
14.07.2022
Index : Yes / No
Internet : Yes/ No
sn
To
The Income Tax Officer,
Ward-1, Tuticorin,
6R, AVM Complex,
North Cotton Road,
Tuticorin-628001.
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W.P(MD).No.10445 of 2022
M.NIRMAL KUMAR, J.
sn
W.P(MD).No.10445 of 2022
14.07.2022
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