Court dismisses writ petitions, upholds Income Tax Act sections, grants appeal liberty, and suspends recovery proceedings.

The court dismissed both writ petitions (W.P.No.21027 of 2021 and W.P.No.21854 of 2021), upholding the orders under Sections 144A and 153A of the Income Tax Act, 1961. The court granted the petitioner the liberty to file a statutory appeal and directed the Appellate Commissioner to pass orders on merits without being influenced by the observations in the judgment. The court also provided temporary relief by keeping the recovery proceedings in abeyance for 60 days.

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Issues Involved:
1. Legality of the order dated 25.09.2021 under Section 144A of the Income Tax Act, 1961.
2. Legality of the consequential Assessment Order dated 27.09.2021 under Section 153A of the Income Tax Act, 1961.
3. Presumption of ownership of seized cash under Section 132(4A) and Section 292C of the Income Tax Act, 1961.
4. Double taxation concern.
5. Adequacy of evidence to rebut the presumption of ownership.
6. Availability of alternate remedies.

Issue-wise Detailed Analysis:

1. Legality of the Order Dated 25.09.2021 under Section 144A of the Income Tax Act, 1961:
The petitioner challenged the order issued by the Additional Commissioner of Income Tax under Section 144A, claiming it was disposed of without proper discussion and independent application of mind. The petitioner argued that the order merely accepted the views of the Investigating Officer without considering the detailed submissions and material evidence provided. The court noted that the first respondent directed the second respondent to complete the assessment in accordance with the law, which is within the scope of Section 144A. The court found no merit in the argument that the order suffered from non-application of mind, as the direction was based on the objective material available and the subjective satisfaction of the officer.

2. Legality of the Consequential Assessment Order Dated 27.09.2021 under Section 153A of the Income Tax Act, 1961:
The petitioner also challenged the assessment order, arguing that it was a fait accompli resulting from the flawed order under Section 144A. The court examined the assessment order and found it to be well-reasoned, addressing the objections raised by the petitioner and providing a detailed explanation for the conclusions drawn. The court upheld the assessment order, noting that the petitioner had an alternate remedy by way of appeal before the Appellate Commissioner under Section 246A of the Income Tax Act.

3. Presumption of Ownership of Seized Cash under Section 132(4A) and Section 292C of the Income Tax Act, 1961:
The petitioner contended that the cash seized from the residence of Mr. Damodaran and Mrs. Vimala Damodaran did not belong to him and that the presumption under Section 132(4A) and Section 292C could not be applied against him. The court noted that the presumption is rebuttable and can be applied against the persons from whose premises the cash was seized. The court found that the petitioner failed to provide adequate evidence to rebut the presumption and that the evidence gathered during the investigation overwhelmingly indicated that the cash belonged to the petitioner.

4. Double Taxation Concern:
The petitioner argued that the impugned proceedings resulted in double taxation, as the same income was being taxed in the hands of Mr. S. Srinivasan, who claimed ownership of the money. The court dismissed this argument, noting that the presumption under the Income Tax Act was against the petitioner and that Mr. Srinivasan's claim did not satisfy the test of preponderance of probability.

5. Adequacy of Evidence to Rebut the Presumption of Ownership:
The court found that Mr. Srinivasan's voluntary statement claiming ownership of the cash did not provide sufficient evidence to rebut the presumption. The court highlighted that Mr. Srinivasan did not have the means to own such a large amount of cash and had not filed any income tax returns to substantiate his claim. The court concluded that the preponderance of probability indicated that the cash belonged to the petitioner.

6. Availability of Alternate Remedies:
The court emphasized that the petitioner had an alternate remedy by way of appeal against the assessment order under Section 246A of the Income Tax Act. The court provided the petitioner with the liberty to file a statutory appeal before the Appellate Commissioner within 30 days and directed that the recovery proceedings be kept in abeyance for 60 days, provided the petitioner filed the appeal within the stipulated time.

Conclusion:
The court dismissed both writ petitions (W.P.No.21027 of 2021 and W.P.No.21854 of 2021), upholding the orders under Sections 144A and 153A of the Income Tax Act, 1961. The court granted the petitioner the liberty to file a statutory appeal and directed the Appellate Commissioner to pass orders on merits without being influenced by the observations in the judgment. The court also provided temporary relief by keeping the recovery proceedings in abeyance for 60 days.

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