TaxTMI 
TaxTMI 
2022 (3) TMI 161
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....er that the cash recovered from the house of above couple did not belong to him and therefore, it cannot be added to his total taxable income as undisclosed income contrary to the return filed. 3. Learned Senior Counsel for the petitioner submits that pursuant to the aforesaid seizure, a Show Cause Notice, dated 08.09.2021, was issued by the second respondent to the petitioner, to which the petitioner replied and also moved an application dated 21.09.2021 under Section 144A of the IT Act, 1961 before the first respondent Additional Commissioner of Income Tax, Chennai, for the following reliefs:- (i) It is submitted and prayed that the Hon'ble Additional Commissioner of Income-Tax, Central Range-1, Chennai, may be pleased to call for and examine the records, from the Assessing Officer, i.e., Deputy/Assistant Commissioner of Income-Tax, Central Circle 1(3), Chennai, (including the various submissions and material evidences submitted by the petitioner during the course of Post-Search Proceedings and Assessment Proceedings), pertaining to the petitioner, relevant to the Assessment Year 2019-2020. (ii) Further, to issue appropriate direction (i.e., to conduct an independent inq....
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....cle or thing are or is found in the possession or control of any person in the course of a search, it is to be presumed that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person. It is submitted that presumption cannot be rebutted in the absence of evidence to the contrary as the owner of cash Mr.Srinivasan has claimed ownership. 9. It is further submitted that one Mr.S.Srinivasan, the brother-in-law of Mr.Damodaran and brother of Mrs.Vimala [from whose residence the cash was recovered], has given a voluntary statement on the date of seizure that the cash belonged to him and he has also approached the Settlement Commission to settle the case. 10. It is therefore submitted that the cash recovered from the premises of Mr.Damodaran and Mrs.Vimala cannot be treated as undisclosed income of the petitioner under Section 69A of the I.T. Act. 11. It is further submitted that the said Srinivasan claimed to be a party worker and has categorically stated that the money was sourced by him as a party worker to ensure the victory of the petitioner in the Parliamentary Election and kept it in his sister's hous....
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....tigating Officer. 17. It is further submitted that as a consequence of the order dated 25.09.2021 under Section 144-A of the Income Tax Act, 1961, Assessment Order dated 27.09.2021 for the Assessment Year 2019-2020 was presented as a fait accompli even though there is a clear presumption under law under Section 134-A read with Section 292C of the Income Tax Act. 18. It is further submitted that the order passed under Section 144A of the IT Act, 1961 on 25.09.2021 impugned in W.P.No.21027 of 2021 has to therefore go and therefore the consequential Assessment Order passed on 27.09.2021 under Section 153A of the IT Act, 1961 impugned in W.P.No.21854 of 2021 also has to go. 19. Opposing the prayer in the present writ petitions, the learned standing counsel for the respondents submits that not only statements were obtained from the persons from whom cash was recovered, but also from the petitioner. The statement given by Mr.Srinivasan, voluntarily claiming ownership of the cash was not satisfactory. It is submitted that statements were also obtained from the petitioner. It is submitted that Mr.Srinivasan is a person of no means as neither he has shown any genuine source of such huge ....
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....irst respondent has considered the submissions/statements and has come to a conclusion that the order has to be passed by the second respondent in accordance with law and therefore, the petitioner cannot challenge the order passed under Section 144A of the IT Act, 1961. 26. Learned Senior Standing Counsel for the respondents further submits that W.P.No.21027 of 2021 has to be dismissed as infructuous in view of the assessment order passed by the second respondent. 27. It is therefore submitted that there is no merit in these writ petitions as the petitioner has an alternate remedy before the Appellate Commissioner under Section 246A of the IT Act, 1961. 28. It is further submitted that the petitioner has an alternate remedy by way of appeal against the Assessment Order passed under Section 153A of the IT Act, 1961 and therefore, on this count also, W.P.No.21854 of 2021 has to be dismissed. 29. I have considered the rival submissions and perused the impugned order and the case laws submitted by the learned Senior Counsel for the petitioner. 30. The show cause notice issued to the petitioner elicits contradiction and therefore applying the principle of preponderance of probabili....
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....ued before an opportunity is given to the assessee to be heard. Explanation.-For the purposes of this section no direction as to the lines on which an investigation connected with the assessment should be made, shall be deemed to be a direction prejudicial to the assessee." 35. A direction under Section 144A of the IT Act, 1961 can be issued "where such officer considers it necessary or expedient to do so having regard to the nature of the case or the amount involved or for any other reason". 36. A direction under Section 144A of the IT Act, 1961 can be issued to the Assessing Officer, either on his own motion suo motu or a on reference by the jurisdictional Assessing Officer or on an application of an assessee. The above-mentioned power of the Joint Commissioner/ Additional Commissioner to issue pre-assessment directions to the Income-tax Officer in individual cases is in addition to the general power conferred on him by section 119(3) to issue instructions which stood up to 01.04.88. 37. Directions once issued is binding on the Income-tax Officer. Where, however, any directions prejudicial to interest of the assessee is to be issued, it shall be only after the assessee has b....
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....in which an assessment is pending, and issue such directions to the Income-tax Officer as he deems fit so as to enable the Income-tax Officer to complete the assessment. The directions shall be issued only where the Inspecting Assistant Commissioner considers it necessary or expedient to do so having regard to the nature of the case or the amount involved or for any other reason. The directions in question shall be binding on the Income-tax Officer. However, any directions which are prejudicial to the assessee shall be issued by the Inspecting Assistant Commissioner only after the assessee has been given an opportunity of being heard. Any direction issued by the Inspecting Assistant Commissioner in regard to the lines on which investigation may be made in an assessment, shall not be treated as a direction prejudicial to the assessee. 3.The above-mentioned power of the Inspecting Assistant Commissioner to issue preassessment directions, to the Income-tax Officer in individual cases is in addition to the general power conferred on him by section 119(3) to issue instructions." 40. A reading of the above provision makes it clear that the decision whether to issue a direction is to b....
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.... with the cash, details of bus fees/hostel fees/mess fees payable by the students of were found along with the cash of Rs. 11.49 crores. 48. The evidence gathered by the respondent during the course of investigation prima facie appears to be overwhelmingly against petitioner. The first respondent could possibly come to no different conclusion while passing the impugned order, dated 25.09.2021, on the application filed by the petitioner under Section 144A of IT Act, 1961. 49. The statement of Mr.S.Srinivasan claiming that the cash belonged to him does not satisfy the test of preponderance of probability that the cash indeed belongs to him. Mr.S.Srinivasan has not produced any records to substantiate that the cash belonged to him. The show cause notice also indicates that Mr.S.Srinivasan has not filed any income tax returns to justify his version. Mr.Srinivasan has also not given any satisfactory explanation to substantiate his claim. On the other hand, there is a preponderance of probability that the cash belonged to the petitioner. 50. Since preponderance of probability indicate that the seized cash was an undisclosed income of the petitioner and was kept at the residence of Mr.....
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....isposal of application under Section 144A of the IT Act does not warrant a detailed reasoning. In this case, the Officer has directed the second respondent to complete the assessment in accordance with law. As mentioned above, discretion can be exercised where such officer considers it necessary or expedient to do so having regard to the nature of the case or the amount involved or for any other reason. 56. The power under Section 144A of the IT Act is to be exercised when such an Officer deems it expedient so to enable the assessing officer to complete assessment. In this case, the rejection was based on the report of the jurisdiction assessing officer which is quite damaging. Therefore, I do not find any reasons to interfere with the order rejecting the request of the petitioner under Section 144A of the IT Act as non speaking or suffering from non application of mind. 57. Instead of defending himself in the Show Cause Notice proceedings, the petitioner attempted to divert the attention to prolong the longevity of the litigation both before the respondents and now before this Court. It was unwarranted. 58. It is also noticed that the impugned assessment order dated 27.9.2021 w....
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....ment and it has been earned by him from undisclosed sources. 4.7. The assessee was given show cause notice dated 08.09.2021 as to why the aforesaid amount of Rs. 12,49,99,000/- ought not to be brought to tax, by highlighting the above factors. The assessee replied to the show cause notice on 20.09.2021 and simultaneously, filed petition u/s.144A to the Range Head (Addl.CIT, Central Range-1, Chennai). The range head heard both the assessing officer and the assessee's A.R., Shri. Shunmughasundaram, C.A., on 23.09.2021 and after considering the submissions of both the assessing officer and the assessee, rejected the petitioner u/s.144A, vide order dated 25.09.2021. Now, coming to the reply of the assessee to the show cause notice issued by the assessing officer, the crux of the assessee's objections are enumerated below: The assessee has no financial or business connection with Shri. S.Srinivasan (alias) Poonjolai Srinivasan and it is unreasonable to pin the actions of Shri. S.Srinivasan on him. Merely because the assessee is the Chairman of Duraimurugan Educational Trust and the materials pertaining to Duraimurugan Educational Trust were found along with the cash at the residen....
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....12,49,99,000/- ------------------------ Total income assessed :Rs. 13,05,16,990/- ------------------------ Demand notice and calculation sheet enclosed. This order is passed with the prior approval of the Additional Commissioner of Income Tax, Central Range-1, Chennai as per sec.153D of the Act. Penalty proceedings u/s.270A of the I.T.Act, 1961 is initiated separately." 59. Therefore, there is no merit in the challenge to the impugned order dated 25.09.2021 passed by the first respondent under Section 144A of the Income Tax Act, 1961. Hence, W.P.No.21027 of 2021 filed by the petitioner is liable to be dismissed. 60. The impugned assessment order dated 27.9.2021 passed by the second respondent appears to be well reasoned and therefore does not warrant any interference under Article 226 of the Constitution of India. Therefore, I do not find any reason to quash impugned assessment order dated 27.9.2021. Therefore, W.P.No.No.21854 of 2021 is also liable to be dismissed. 61. At the same time, I give liberty to the petitioner to file a statutory appeal before the Appellate Commissioner under Section 246A of the IT Act, 1961 against the impugned assessment order date....