Taxability of Amount seized during Demonetization; Madras HC Applauds Govt for Introducing Faceless E-Assessment lordship c Saravanan full order

[2/20, 19:09] Sekarreporter: [2/20, 19:05] Sekarreporter: https://twitter.com/sekarreporter1/status/1230485894441787392?s=08
[2/20, 19:05] Sekarreporter: Taxability of Amount seized during Demonetization; Madras HC Applauds Govt for Introducing Faceless E-Assessment lordship c Saravanan https://www.sekarreporter.com/taxability-of-amount-seized-during-demonetization-madras-hc-applauds-govt-for-introducing-faceless-e-assessment-lordship-c-saravanan/
[2/20, 19:09] Sekarreporter: W.P.No.1732 of 2020
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved On 28.01.2020
Pronounced On 04.02.2020
CORAM
THE HONOURABLE MR.JUSTICE C.SARAVANAN
W.P.No.1732 of 2020
and
W.M.P.Nos.2006 & 2007 of 2020
Salem Sree Ramavilas Chit Company,
Private Limited,
Rep. by its President,
Mr.N.K.Ramalingam,
S/o.N.V.Krishnamurthy Chettiar,
aged about 66 years,
28, Sree Raamanivasam,
Arya Vysyal Street, Shevapet,
Salem – 636 002. … Petitioner
Vs.
The Deputy Commissioner of Income Tax,
Circle 1(1), Income Tax Office,
No.3, Gandhi Road,
Salem – 636 007. … Respondent
Prayer: Writ Petition filed under Article 226 of the Constitution of
India, to issue a Writ of Certiorari, calling for the records in
ITBA/AST/S/143(3)2019-20/1023185233(1) dated 27.12.2019 on
the file of the respondent relating to the Assessment Year 2017-18
and quash the same.


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[2/20, 19:09] Sekarreporter: W.P.No.1732 of 2020
For Petitioner : Mr.G.Baskar
For Respondent : Mr.A.P.Srinivas
Standing Counsel.
O R D E R
In the Writ Petition, the petitioner has challenged the
impugned order passed by the respondent on 27.12.2019 in respect
of the amount received by the petitioner post demonetization i.e.,
between 09.11.2016 and 31.12.2016.
2.The learned counsel for the petitioner submits that regular
returns were filed for the Assessment Year 2017-18 on 07.11.2017.
After the returns were filed, proceedings were taken up and notice
for completing the assessment was issued under Section 143(2) of
the Act on 09.08.2018 followed by notices under Section 142(1) of
the Income Tax Act on 20.06.2019 and 29.10.2019 to which the
petitioner responded on 22.11.2019, 26.11.2019 and 16.12.2019,
respectively pursuant to which the impugned assessment order has
been passed.
3.It is the contention of the petitioner that in the impugned
order, the respondent Deputy Commissioner has erroneously came
to a conclusion that the petitioner has not properly explained the


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[2/20, 19:11] Sekarreporter: W.P.No.1732 of 2020
15.The Government of India has introduced E-Governance for
conduct of assessment proceedings electronically. It is a laudable
steps taken by the Income Tax Department to pave way for an
objective assessment without human interaction. At the same time,
such proceedings can lead to erroneous assessment if officers are
not able to understand the transactions and statement of accounts
of an assessee without a personal hearing. The respondent should
have to be therefore at least called for an explanation in writing
before proceeding to conclude that the amount collected by the
petitioner was unusual.
16.In my view, the petitioner has prima facie demonstrated
that the assessment proceeding has resulted in distorted conclusion
on facts that amount collected by the petitioner during the period
was huge and remained unexplained by the petitioner and therefore
same was liable to be treated as unaccounted money in the hands
of the petitioner under Section 69A of the Income Tax Act, 1961.
Therefore, the impugned order making the petitioner liable to tax at
the maximum marginal rate of tax by invoking Section 115BBE of
the Income Tax Act, 1961 placing reliance on the decision of the
Honourable Supreme Court in Smt. Shrilekha Banerjee Vs. CIT,


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