Court Upholds Exclusion of PMGKY Income from Assessment under Income Tax Act

The court dismissed the writ petition challenging the notice under section 153A of the Income Tax Act for assessment years 2011-12 to 2016-17. The petitioner's concerns about the potential inclusion of income declared under PMGKY in the block assessment were addressed. The court emphasized that a show cause notice does not warrant interference unless lacking jurisdiction or being wholly illegal. The respondent's position that PMGKY income should be excluded from total income assessed under section 153A was upheld. The court found no reason to interfere, affirming the exclusion of disclosed PMGKY income from the block assessment.

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Issues:
Challenge to notice under section 153A of the Income Tax Act for assessment years 2011-12 to 2016-17. Apprehension regarding inclusion of income declared under Pradhan Mantri Garib Kalyan Yojana (PMGKY) in block assessment. Preliminary objection on the maintainability of the writ petition. Interpretation of clauses 199I and 199J of PMGKY. Concern regarding assessment of disclosed income under PMGKY in block assessments. Jurisdictional aspect of challenging show cause notice under Article 226.

Analysis:
The petitioner filed a writ petition challenging the notice under section 153A of the Income Tax Act for the assessment years 2011-12 to 2016-17, expressing concerns about the potential inclusion of income declared under PMGKY in the block assessment. The petitioner had voluntarily disclosed and deposited a significant sum under PMGKY, seeking exemption from inclusion in total income as per clauses 199I and 199J of the scheme. The petitioner contended that the disclosed income should not be assessed subsequently, emphasizing the provisions of PMGKY safeguarding against such assessments.

The respondent raised a preliminary objection on the maintainability of the writ petition, arguing that it was premature as the proceedings were pending before the Assessing Authority. The respondent, supported by the Deputy Commissioner of Income Tax, asserted that any income declared under PMGKY should be excluded from the total income assessed under section 153A. The petitioner's obligation was to provide evidence of the disclosed income for exclusion during assessment. The court noted that a writ petition is generally not entertained against a show cause notice unless lack of jurisdiction or illegality is evident.

The court emphasized that a show cause notice does not typically warrant interference unless it lacks jurisdiction or is wholly illegal. The court reviewed the written instructions from the respondents, acknowledging that the petitioner's concerns were duly considered. Ultimately, the court found no reason to interfere, as the notices were issued by the competent authority, and the petitioner's grievance regarding the inclusion of PMGKY income in block assessments was addressed satisfactorily. Consequently, the writ petition was disposed of, affirming the exclusion of disclosed PMGKY income from the block assessment.

In conclusion, the judgment clarified the application of PMGKY provisions, addressed jurisdictional aspects of challenging show cause notices, and upheld the exclusion of disclosed PMGKY income from block assessments, providing a comprehensive analysis of the legal issues involved in the case.

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