The Hon'ble High Court of Madras in [Rakesh Beniyal v. Income-tax Officer (Assessment) (W.P. No. 8865 of 2024 dated April 2, 2024] held that where an assessee contends that a bank account was opened in his name without his knowledge, and the transactions in such account resulted in an assessment order, these are disputed questions of fact that cannot be conveniently addressed in proceedings under Article 226 of the Constitution. The court dismissed the writ petition filed by the assessee challenging the assessment order and directed the assessee to avail of the statutory remedy.
Facts of the Case:
(The Petitioner) Rakesh Beniyal filed a writ petition (W.P. No. 8865 of 2024) challenging an assessment order dated March 6, 2024, passed by (the Respondent) Income-tax Officer (Assessment) under Section 68, read with Section 148 of the Income-Tax Act, 1961. The facts of the case were as follows:
An assessment order was passed in the case of (the Petitioner) by issuing a notice under Section 148, followed by Sections 148A and 144B of the Income-Tax Act, 1961.
(The Petitioner) submitted that a business account (current account) was opened in his name in a bank without his knowledge.
(The Petitioner) alleged that the escaped income of Rs. 1,09,25,580/- was remitted into the said account, to which he had no connection.
After lodging a complaint before the Superintendent of Police, Erode District, and obtaining CSR No. 419 of 2023, (the Petitioner) filed the present writ petition.
Learned counsel for (the Petitioner) submitted that (the Petitioner) was employed as a clerk in a spinning mill and was drawing a meagre salary of Rs. 6,000/- per month.
It was further submitted that the transactions that resulted in the re-assessment proceedings were on account of the involvement of one Mr. Prakash Muthuswamy, who was employed as Operation Head/Branch Manager in the Axis Bank.
(The Petitioner) had earlier filed a writ petition (W.P. No. 3848 of 2023), which was dismissed.
Issue:
Whether the writ petition filed by the Assessee challenging the assessment order should be entertained when the questions of fact regarding the opening of the bank account without his knowledge and the transactions in such account were disputed.
Held by the Court:
The Hon'ble High Court of Madras, in the (W.P. No. 8865 of 2024), held as follows:
The court observed from the averments in the affidavit in support of the writ petition that (the Petitioner) had filed an earlier writ petition, which was dismissed. After the assessment order was issued, (the Petitioner) filed the present writ petition.
The court noted that (the Petitioner) contended that a bank account was opened in his name without his knowledge, and the transactions in such account resulted in the assessment order. The court held that these were disputed questions of fact that could not be conveniently addressed in proceedings under Article 226 of the Constitution of India.
The court observed that a statutory appeal was available to (the Petitioner) against the assessment order.
Consequently, the court held that no case was made out for interference under Article 226 of the Constitution.
Therefore, the court dismissed the writ
petition filed by (the Petitioner), leaving it open to (the Petitioner) to avail of the statutory remedy against the assessment order.
The court clarified that there shall be no order as to costs.
Relevant Sections:
"Section 68, read with Section 148, of the Income-Tax Act, 1961"
"68. Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year:
35[Provided that where the sum so credited consists of loan or borrowing or any such amount, by whatever name called, any explanation offered by such assessee shall be deemed to be not satisfactory, unless,—
(a) the person in whose name such credit is recorded in the books of such assessee also offers an explanation about the nature and source of such sum so credited; and
(b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory:
Provided further that] where the assessee is a company (not being a company in which the public are substantially interested), and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee-company shall be deemed to be not satisfactory, unless—
(a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and
(b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory:
36[Provided also] that nothing contained in the first proviso 37[or second proviso] shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB) of section 10."
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