High Court
Case Details
Neutral Citation No. - 2025:AHC:64534-DB 1 Chief Justice's Court Case :- WRIT TAX No. - 1649 of 2025 Petitioner :- Pramod Kumar Jain Respondent :- Principal Commissioner of Income Tax and another Counsel for Petitioner :- Ashish Bansal, Rama Goel Bansal Counsel for Respondent :- Gaurav Mahajan, Manu Ghildiyal Hon'ble Arun Bhansali, Chief Justice Hon'ble Kshitij Shailendra, J. 1. This petition is directed against order dated 12.03.2025 passed by Assistant Commissioner of Income Tax, Circle-2 (1) (1), Agra under Section 143 (3) of the Income Tax Act, 1961 (for short ‘the Act’) for the assessment year 2018-19. 2. The petitioner filed his return for the assessment year 2018-19 on 31.10.2018 reflecting an income of Rs.15,94,710/-, which included business income from his proprietary concern, namely M/s Agarwal Distributor, which it is claimed, is the authorized distributor of ITC and Haldiram snacks. 3. Notice under Section 143(2) of the Act was issued on 22.09.2019 after picking up the return for scrutiny and assessment order dated 21.04.2021 was passed under Section 143(3) read with Section 144B of the Act and against the returned income of Rs.15,94,710/-, assessment was completed at an income of Rs.27,27,570/- after adding an amount on account of undisclosed income and on account of adhoc disallowances under various heads of expenses. 4. Feeling aggrieved of the assessment made on 21.04.2021, petitioner filed an appeal, which remained pending. During pendency of the appeal, a notice under Section 263 of the Act was issued to the petitioner inter alia on account of the fact that the petitioner had shown/declared total revenue receipt at Rs.19,86,02,939/- whereas he had deposited cash amounting to Rs.27,85,96,000/- in his bank accounts during the relevant year. Therefore, 2 there being huge difference in the turnover declared and the cash deposited, regarding which, no inquiry was made by the assessing authority and as such the petitioner was required to show cause as to why the assessment order dated 21.04.2021 be not treated as erroneous insofar as the same was prejudicial to the interest of the revenue. 5. The petitioner filed his response to the notice under Section 263 of the Act. However, on 20.03.2024, the respondent no.1-Principal Commissioner of Income Tax, Agra (PCIT) came to the conclusion that the order dated 21.04.2021 passed by the assessing officer was erroneous as the same was passed without making inquiries/investigation and partly set aside the assessment order. The PCIT was of the opinion that the contention of the assessee in respect to the difference in turnover disclosed towards cash deposits and the bank accounts cannot be accepted without verification/examination of the books of accounts of the assessee. 6. Pursuant to the order passed under Section 263 of the Act, the petitioner was issued notice under Section 142(1) requiring him to submit various informations with regard to the turnover declared and the cash deposited and to explain reasons as to why the cash deposits be not treated as unexplained cash credits under Section 68 or unexplained money under Section 69A of the Act. 7. The petitioner filed his response to the notice and claimed that Form GSTR-9C and Form 52 under GST/VAT Act demonstrate that the amount of turnover as disclosed in the audited financial statements and GSTR-9C was Rs.19,86,02,939/- and the amount of VAT paid for the period 01.04.2017 to 30.06.2017 was Rs.14,93,216/- and, therefore, the aggregate of sales and VAT/GST including Cess came to Rs.32,85,97,908/-, which covered the amount deposited in the bank. Further details/documents sought from the petitioner, were supplied. 8. Further show cause notice dated 28.01.2025 was issued with regard to unexplained cash under Section 68 and unexplained money under Section 69A regarding their addition to the total income of the petitioner, 3 which was responded by the petitioner inter alia claiming that the stock sold was under the category of FMCG and hence it was not possible for the petitioner to maintain the stock records, however, purchase invoices along with transportation receipts were filed to demonstrate the possession of stock. 9. By order impugned dated 12.03.2025, the plea raised by the petitioner seeking to explain the cash receipts, was not accepted and the demand impugned was raised.
Legal Reasoning
10. Learned counsel for the petitioner made vehement submissions that respondent no.2 was not justified in rejecting the explanation provided by the petitioner. Submissions have been made that the material produced, clearly explain the excess of cash deposits from the turnover declared inasmuch as the excess deposits pertaining to the amount of VAT/GST collected by the petitioner, which was not part of the turnover and despite producing requisite documents in support thereof, the plea has been rejected and, therefore, the order impugned deserves to be quashed and set aside. 11. Learned counsel for the respondents vehemently opposed the submissions. Submissions have been made that the PCIT had passed order under Section 263 of the Act on noticing that the difference in turnover and cash deposits was accepted without verification and examination of books of accounts of the assessee, which was prejudicial to the interest of the revenue. The order was not questioned and once after a detailed investigation, the assessing officer has come to the conclusion that the petitioner has failed to explain the deposit of excess cash, no interference is required in the order impugned. Further submissions have been made that the petitioner has an alternative remedy of appeal under the provisions of the Act and there is apparently no reason for bypassing of said remedy of appeal and, therefore, the petition deserves dismissal. 12. We have considered the submissions made by counsel for the parties and have perused the material available on record. 13. The assessing officer by the order impugned, after thoroughly taking into consideration the plea raised, has come to the following conclusion: 4 "Having purchase invoices and transportation receipts does not prove beyond doubt that physical stock was actually held. Further the assessee has only admitted that even stock registers are not maintained. Assessee’s failure to produce proof of deposit of GST/VAT/Cess in Govt account in the garb of ITC also renders the genuineness of said sales as unproven, as again the purchases on which ITC is claimed are unproven. Hence, it is established that the differential amount of Rs.7,99,93,061/- between cash deposited in bank account and turnover/sales shown is nothing but unaccounted sales/undisclosed income and is hereby added to the total income as unexplained money u/s 69A of the I.T. Act, 1961.” 14. The determination made by the authority is based on the material available on record. The view taken by the authority is open to appeal. The petitioner with regard to the availability of alternative remedy, has made cursory submissions indicating in para 26 of the petition that there is no alternative much less efficacious remedy available to the petitioner but to approach this Court and invoke its extraordinary jurisdiction under Article 226 of the Constitution of India. 15. The parameters for exercising jurisdiction under Article 226 of the Constitution of India are well settled, wherein it can be exercised sparingly and only in exceptional circumstances despite availability of statutory remedy. Recently, Hon’ble Supreme Court in Jaipur Vidyut Vitran Nigam Limited vs. MB Power (MP) Limited : (2024) 8 SCC 513, after referring to the judgement in Radha Krishan Industries vs. State of H.P. : (2021) 6 SCC 771, has laid down that though availability of an alternative remedy is not a complete bar in the exercise of power of judicial review by the High Courts, the recourse to such a remedy would be permissible only if extraordinary and exceptional circumstances are made out. It was observed that when a right is created by a statute, which itself prescribes the remedy or procedure for enforcing the right or liability, resort must be had to that particular statutory remedy before invoking the discretionary remedy under Article 226 of the Constitution of India. 5 16. In the present case, the petitioner has failed to point out any extraordinary and exceptional circumstance for bypassing the statutory alternative remedy. Neither there has been a failure of principles of natural justice nor it is the case of the petitioner that proceedings were without jurisdiction, which are the grounds under which the bar of statutory remedy does not come in the way of entertaining the petitions under Article 226 of the Constitution of India. 17. In view of above discussion, we do not find any reason to invoke our extraordinary jurisdiction in the present case. The petition is, therefore, dismissed, leaving it open for the petitioner to avail alternative remedy in accordance with law. Order Date :- 17.4.2025 RK/ (Kshitij Shailendra, J) (Arun Bhansali, CJ) Digitally signed by :- RAJESH KUMAR High Court of Judicature at Allahabad