2018 (12) TMI 1219 - HC - Income Tax

Assessment u/s 153A - block assessment - Exclusion of Income disclosed under Pradhan Mantri Garib Kalyan Yojana, 2016 (PMGKY) - Held that - The petitioner has voluntarily surrendered and deposited tax, surcharge and penalty under the PMGKY on the conditions held out in the said scheme as laid down in clause 199I and 199J which clearly provides that the amount of undisclosed income declared in accordance with section 180 shall not be included in total income of the declarant for any assessment year under the Income Tax Act, if the declarant make the payment of tax and surcharge referred to in section 184 and the penalty referred to in section 185, by the date specified under subsection (1) of section 187, and further embargo has been placed upon the department not to reopen any assessment of reassessment under the said provision . The show cause notices dated 30.05.2018 issued un/s 153A pertain to the assessment years 2011- 12 to 2016-17. It may be possible that the income surrendered by the petitioner may relate to any period covered by the aforesaid notices, and for those assessment years the embargo as provided for in clause 199I and 199J may apply. It is for the assessing officer to come to such a finding after going through the declarations made by the petitioner under the PMGKY as well as the response filed pursuant to the said notices. After going through the written instructions submitted by the respondents, we are satisfied that the apprehension and the grievance of the petitioner has duly been taken note of by the respondents and we hope and trust that it will be taken into consideration, while making the final assessment order under Section 153A of the Income Tax Act. No interference is called for by us in exercise of writ jurisdiction Article 226 of the Constitution of India, as the notices have been issued by the competent authority (Assessing Authority), and no lack of jurisdiction has been alleged or pointed out by the petitioner. The grievance of the petitioner stands fully redressed in light of the written instructions of the respondents which state that the income which has been disclosed by him under the PMGKY shall be excluded from the assessment of the block year for which notice under Section 153A has been issued by the respondent

Summary

Issues:
Challenge to notice under section 153A of the Income Tax Act for assessment years 2011-12 to 2016-17. Apprehension regarding inclusion of income declared under Pradhan Mantri Garib Kalyan Yojana (PMGKY) in block assessment. Preliminary objection on the maintainability of the writ petition. Interpretation of clauses 199I and 199J of PMGKY. Concern regarding assessment of disclosed income under PMGKY in block assessments. Jurisdictional aspect of challenging show cause notice under Article 226.

Analysis:
The petitioner filed a writ petition challenging the notice under section 153A of the Income Tax Act for the assessment years 2011-12 to 2016-17, expressing concerns about the potential inclusion of income declared under PMGKY in the block assessment. The petitioner had voluntarily disclosed and deposited a significant sum under PMGKY, seeking exemption from inclusion in total income as per clauses 199I and 199J of the scheme. The petitioner contended that the disclosed income should not be assessed subsequently, emphasizing the provisions of PMGKY safeguarding against such assessments.

The respondent raised a preliminary objection on the maintainability of the writ petition, arguing that it was premature as the proceedings were pending before the Assessing Authority. The respondent, supported by the Deputy Commissioner of Income Tax, asserted that any income declared under PMGKY should be excluded from the total income assessed under section 153A. The petitioner's obligation was to provide evidence of the disclosed income for exclusion during assessment. The court noted that a writ petition is generally not entertained against a show cause notice unless lack of jurisdiction or illegality is evident.

The court emphasized that a show cause notice does not typically warrant interference unless it lacks jurisdiction or is wholly illegal. The court reviewed the written instructions from the respondents, acknowledging that the petitioner's concerns were duly considered. Ultimately, the court found no reason to interfere, as the notices were issued by the competent authority, and the petitioner's grievance regarding the inclusion of PMGKY income in block assessments was addressed satisfactorily. Consequently, the writ petition was disposed of, affirming the exclusion of disclosed PMGKY income from the block assessment.

In conclusion, the judgment clarified the application of PMGKY provisions, addressed jurisdictional aspects of challenging show cause notices, and upheld the exclusion of disclosed PMGKY income from block assessments, providing a comprehensive analysis of the legal issues involved in the case.