2023 (3) TMI 1246 - HC - Income Tax

Show cause notice issued under Block Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 - penalty proceeding initiated - non disclosure of investments - petitioner submit that he did not have any personal knowledge about the alleged investments and was ignorant of the bank account details and amounts could have been made by his late father and that he was taking steps to contact his father's chartered accountant - petitioner submit that if the Court is inclined to direct the petitioner to appear to answer the show cause notices, then the payment of the penalty may be deferred till the disposal of the appeal. HELD THAT - As considering the fact that the petitioner has responded in great detail to the impugned notices, the interest of justice would be subserved if the Writ Petition is disposed of with the following directions - i) The petitioner shall appear before the respondent concerned on 27.03.2023 at 10.30 am., and make his submissions. ii) The respondents shall thereafter pass appropriate orders on the same. Till such time the orders are pronounced, no coercive steps shall be initiated by the respondents. Writ Petition is disposed of.

Summary

Issues Involved:
The petitioner invoked Article 226 of the Constitution for a Writ of Certiorarified Mandamus to quash show cause notices and drop penalty proceedings pending appeal.

Details of the Judgment:

Issue 1: Show Cause Notices and Penalty Proceedings
The impugned order dated 13.03.2023 issued show cause notices to the petitioner under Sections 41 and 43 of the Act, demanding penalties. The petitioner claimed ignorance about foreign investments made by his late father and had already challenged the assessment order. The petitioner requested to defer penalty proceedings until the appeal is disposed of. The petitioner argued that the notices were unwarranted as the appeal was pending, and the penalty proceedings should be deferred or dropped.

Issue 2: Response to Notices
The petitioner responded to the impugned notices in detail, offering to permit the authorities to appropriate the demanded tax dues. The petitioner's counsel requested that if the petitioner is directed to appear to answer the show cause notices, the payment of penalty should be deferred until the appeal is resolved.

Judgment
After hearing arguments from both sides, the court directed the petitioner to appear before the respondent on a specified date to make submissions. The court ordered that no coercive steps should be taken by the respondents until appropriate orders are passed. The writ petition was disposed of with no order as to costs, and connected miscellaneous petitions were closed.