Rajasthan High Court - Jaipur
Parmesh Chand Yadav S/O Rameshwar Lal ... vs Income Tax Officer on 12 July, 2022
Bench: Manindra Mohan Shrivastava, Shubha Mehta
HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
D.B. Civil Writ Petition No. 7352/2022
Parmesh Chand Yadav S/o Rameshwar Lal Yadav, Dhani
Chimdayli Vpo-Bilanderpur, Vaya-Khejroli, , Shahpura, Jaipur
303803 Rajasthan.
----Petitioner
Versus
Income Tax Officer, Ward 7(1) Jaipur, Sidhnath Bhawan, Jaipur
Rajasthan, Jyoti Nagar Scheme Lal Kothi Scheme, Behind
Vidhansabha Janpath Jaipur Rajasthan 302015
----Respondent
For Petitioner(s) : Mr. Nikhil Yadav & Mr. Vedant Agarwal
for Mr. Abhil Goyal
For Respondent(s) : Mr. Amit Malani on behalf of
Mr. Nikhil Simlote
HON'BLE MR. JUSTICE MANINDRA MOHAN SHRIVASTAVA
HON'BLE MRS. JUSTICE SHUBHA MEHTA
Order
12/07/2022
Heard.
In this petition, reply has not been filed, the same stands
closed.
Challenge in this petition is to impugned order dated
31.03.2022 passed by the Assessing Authority in exercise of
power under Section 148A of the Income Tax Act, 1961(herein
referred to as "the Act of 1961") leading to issuance of notice
under Section 148 in the matter of reopening of the assessment
proceedings for the assessment year 2018-2019.
The bare facts necessary for adjudication of controversy
involved in this petition are that the petitioner and income tax
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payee, for the assessment year of 2018-19 submitted his income
tax returns and assessment proceedings were drawn.
A notice, however, came to be issued by the Assessing
Officer on 19.3.2022. Notice Under Sub-Clause (b) of Section
148A of Act, 1961 came to be issued to the petitioner stating that
information received suggests that income chargeable to tax for
the assessment year 2018-19 has escaped assessment within the
meaning of Section 147 of the Act, 1961. Alongwith the said
notice, details as part of the annexures were also disclosed that as
per higher risk CRIU/VRU information flagged by the Directorate of
Income-Tax(systems) which is received insight portal, during the
year under consideration, investment to tune of Rs.4,65,72,546/-
were made by the Assessee towards purchase of Crypto currency,
but the source of the same was not verified and in the ITR filed, it
was declared that the total income for the said year was
Rs.5,46,500/-only, which is quite nominal an amount as compared
to investment disclosed subsequently.
A detailed reply was submitted by the petitioner. The
petitioner sought to justify the transaction by submitting that the
amount as alleged in the notice only reflects the volume of
transaction in the course of trade of Crypto currency and not the
investment amount as alleged. Alongwith the reply, the petitioner
filed ITR acknowledgment for the assessment year 2018-19, bank
statement depicting the transfers done in exchange for Crypto
currency and computation of income for assessment year 2018-
2019.
The Assessing Officer, however, was not satisfied with the
reply mainly on the ground that reply submitted by the petitioner
that the investment was less, but the volume of transaction has
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been wrongly assumed as investment amount is not supported by
the relevant documentary evidence. Resultantly, order was passed
under section 148A(d) of IT Act leading to issuance of notice
under Section 148 of IT Act,1961 which is not challenged.
The principal contention of learned counsel for the petitioner
is that the impugned order is not speaking and does not consider the reply of the petitioner, but mechanically rejects the objection. He would submit that a finding that the petitioner has not furnished any documentary evidence in support of information, is perverse as the petitioner had submitted more than one documents. He would further submit that the source of investment has wrongly been held as unverified, though, the entire bank transactions were submitted after obtaining statement from the bank, which was also not disputed. Therefore, it is contended, the impugned order is cryptic, vague, perverse and liable to be interfered with.
Though, reply has not been submitted by the respondents, learned counsel for the revenue would submit that the proceedings u/s 148A(b) were initiated against the petitioner because upon receipt of credible information as stated in the notice dated 19.03.2022, it was reveled that huge amount of investment of Rs.4,65,72,546/- was made by the petitioner. He would submit that the petitioner's assertion that the amount as shown in the transaction was not investment, but it was only volume of transactions during the course of trade of Crypto currency, remained unverified and even though the petitioner could have submitted before the authority the electronic ledger records relating to transaction of Crypto currency, but failed to do so. He would submit that various documents which have been (Downloaded on 25/12/2022 at 01:54:55 AM) (4 of 6) [CW-7352/2022] annexed with the reply were not sufficient to verify the information as submitted by the Assessee in the absence of non submission of the ledger account relating to transaction in Crypto Currency.
We have heard learned counsel for the parties and perused the records and the impugned order which has been passed by the respondent and order of this court in the case of Abdul Majeed Vs. Income Tax Officer (D.B.Civil Writ Petition No.7853/2022) decided on 29.06.2022.
The statutory Scheme of Section 148A of of the Act, 1961 reveals that before initiating proceedings under Section 148, the Competent Authority is required to conduct an enquiry after affording an opportunity of hearing in the manner as specified in Section 148A of the Act, 1961. Sub Clause (d) of Section 148A of the Act, 1961 provides that the Assessing Officer is required to decide on the basis of material available on record including reply of the assessee whether or not, it is fit case to issue a notice u/s 148 of the Act, 1961, by passing order, with the prior approval of specified authority.
Sub-Clause (b) of Section 148A of the Act, 1961 thereof provides that the information must suggest that income chargeable to tax has escaped assessment. Therefore, the purpose of enquiry is to find out whether there is material which suggest that income chargeable to tax escaped assessment.
The opinion which is required to be found should be based on material available on record. The impugned order as it reads shows that the authority has recorded a finding that the material evidence to verify the transaction regarding Crypto currency is not placed on record.
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(5 of 6) [CW-7352/2022] Even in this petition, the petitioner has not submitted the concerned ledger statements relating to trade in Crypto currency.
We find considerable force in the submission of leaned counsel for revenue that bank transactions alone are not sufficient to verify the trade in Crypto currency rather, the assessee ought to have submitted before the authority the relevant ledger statement evidencing that he had entered into trade of Crypto currency in the manner as has been asserted by him by way of the information stated by him. Whether it was the volume of the trade which is reflected in the total amount of Rs.4,65,72,546/-or it was an investment made in the Crypto currency without any withdrawal therefrom would essentially be a matter for consideration upon perusal of the Crypto currency ledger.
May be because of this reason, the authority was of the view that the information regarding trade in Crypto currency is not verified.
However, we find that the authority has considered, though in brief, the reply of the petitioner at this stage only for the purpose of deciding whether proceedings under Section 148 of the Income Tax Act, 1961 should be drawn. In our considered opinion, the exercise which has been undertaken by the authority fulfilled the legal requirement of Section 148(A) of the Act, 1961.
Nevertheless, even now it would be open for the assessee to satisfy the authority by submitting the relevant Crypto currency ledger to verify the information as was submitted by him before the Assessing Officer in proceedings under Section 148A of the Act, 1961.
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(6 of 6) [CW-7352/2022] We are not inclined to interfere with the order as we do not find that the order is either perverse or lacks jurisdiction so as to warrant interference by this court in exercise of writ jurisdiction.
Subject to the liberty which has been granted to the petitioner to submit appropriate documentary evidence in support of information in Section 148 proceedings, the petition is accordingly dismissed.
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