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

    


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Taxability of Amount seized during Demonetization; Madras HC Applauds Govt for Introducing Faceless E-Assessment [Read Judgment]

February 20, 2020 2:39 pm| By : Siddharth Nair 

 
 
 
 
 
 

The Madras High Court has applauded theGovernment for introducing Faceless E-assessment facilities while also cautioning the authorities that not all amounts received by a company during the demonetization period which is huge and explained in nature cannot be concluded as unaccounted money.
The Assessee Salem Sree Ramavilas Chit Company Pvt. Ltd. contended that the Deputy Commissioner had erroneously concluded that the petitioner has not properly explained the deposit of cash amounting Rs.67,37,500/- collected during the demonetization into their account and had claimed the source of cash deposit during demonetization as the accumulated cash balance as on 08.11.2016 wrongly. The Deputy Commissioner had also concluded that the petitioner had not properly explained the source and the purpose of huge cash along with party wise break up as was requested vide under Section 142(1) of the Income Tax Act, 1961.
Justice C. Saravanan while allowing the writ petition held, “The Government of India has introduced E-Governance for the conduct of assessment proceedings electronically. It is a laudable step taken by the Income Tax Department to pave way for an objective faceless E-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 statements 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……. Under these circumstances, the impugned order is set aside and the case is remitted back to the respondent to pass a fresh order within a period of sixty days from date of receipt of a copy of this order. The petitioner shall file additional representation if any by treating the impugned order as the show cause notice within a period of thirty days from the date of receipt of a copy of this order. Since theGovernment of India has done away with the human interaction during the assessment proceedings, it is expected that the petitioner will clearly explain its stand in writing so that the respondent assessing officer(AO) can come to an objective conclusion on facts based on the records alone. It is made clear that the respondent will have to come to an independent conclusion on facts uninfluenced by any of the observations contained herein.
To Read the full text of the Judgment

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