2023 (9) TMI 112 - HC - Income Tax

Unexplained expenditure u/s 69C - petitioner had neither filed any reply nor filed any document despite several opportunity being given to the petitioner - HELD THAT - Prima facie , challenge to the impugned order under Article 226 of the constitution of India is without any merit as the amount that has been paid by the petitioner was neither explained by the petitioner nor the books of accounts filed by the petitioner show it was out of profits earned by the petitioner. Therefore, this writ petition is liable to be dismissed. However, liberty is given to the petitioner to file a statutory appeal within a period of 30 days from the date of receipt of a copy of this order. In case such an appeal is filed, same shall be numbered by the office of the Appellate Commissioner.

Summary

Issues involved:
The impugned Assessment order dated 17.12.2019 challenged for disallowance of expenses claimed by the petitioner during the Financial Year 2010-2011 in the Assessment for the Assessment Year 2011-2012, which were disallowed in the impugned order passed for Assessment Year 2012-2013.

Issue 1: Disallowance of expenses claimed by the petitioner

The petitioner challenged the Assessment order on the ground that expenses claimed during the Financial Year 2010-2011 for a sum of Rs. 85,17,600/- were disallowed in the Assessment for the Assessment Year 2012-2013. The petitioner argued that the expenses incurred during the Financial Year 2011-2012, including the aforementioned sum, were allowed, resulting in a determined taxable income of Rs. 8,74,630/-. The impugned order treated the sum of Rs. 85,17,600/- as unexplained expenditure under Section 69C of the Income Tax Act, 1961, as the petitioner failed to provide any explanation or supporting documents despite multiple opportunities given.

Issue 2: Jurisdiction of the Assessment order

The petitioner contended that the impugned Assessment order lacked jurisdiction as the expenses disallowed for the Assessment Year 2012-2013 were already allowed for the previous Assessment Year. The impugned order specifically questioned the unexplained payment of Rs. 85,17,600/- to M/s.Ashmita Projects Private Limited, which the petitioner failed to justify or support with evidence. The court noted that the petitioner's failure to explain the payment or show it as part of profits earned, led to the dismissal of the writ petition challenging the order.

Conclusion:
The court found the challenge to the impugned order under Article 226 of the constitution of India to be without merit, as the petitioner failed to provide any explanation for the disputed expenditure. The writ petition was dismissed, but the petitioner was granted liberty to file a statutory appeal within 30 days. The Appellate Commissioner was directed to dispose of the appeal without being influenced by any observations made in the writ petition. The writ petition was dismissed with no costs, and the connected miscellaneous petition was closed.