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TMI Blog2023 (11) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... f the facts and statement given by the petitioner and the statements of Bank Officer, Joint Manager, Mr.Unnikrishnan, makes it clear that the practice of the petitioner as the president of the Trust running the college was to credit the salary of staffs/employees into their personal savings account and thereafter withdraw the same by collecting self drawn cheques duly signed by them. The statement that was given by the petitioner was retracted only at a later point of time. The seizure of cash on 10.03.2021 from the possession of Mr.Unnikrishnan and Mr.Swaminathan merely coincided with the implementation of the Tamil Nadu State Assembly Model Code for the ensuring Tamil Nadu Assembly Election. The exception under Rule 112 F (ii) of the Income Tax Rules, 1962 will apply only where the assets so seized or requisitioned are in any manner connected with the ongoing election in an assembly or Parliamentary constituency. This exception is not applicable to the facts of the case, as records indicate that it was the practice of the petitioner to withdraw the cash of staffs/employee atleast from January 2021, if not before as is evident from the statement of Mr.Unnikrishnan on 10.03.2021. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... embly or parliamentary constituency in respect of which a notification has been issued under Section 30, read with Section 56 of the Representation of the People Act, 1951; or ii. the assets seized or requisitioned are connected in any manner to the ongoing election process in an assembly or parliamentary constituency; and iii. no evidence is available or investigation is required for any assessment year other than the assessment year relevant to the previous year in which search is conducted or requisition is made . 6. Operative portion of para 4 in the respective writ petition read as under:- W.P.No.18281 of 2022 W.P.No.18285 of 2022 Impugned Order in ITBA/COM/F/17/2021-22/1041684063(1) Impugned order in ITBA/COM/F/17/2021-22/1041682025(1) From the above Circular of the CBDT, it is clear that exemption under Rule 112F is to be given in cases where no evidence is available or investigation is required for any Asst.Year other than the A.Y. Relevant to the previous year in which search is conducted or requisition is made. In the case of M/s.St.Antony Educational and Social Society, it is seen that evidences have been found that cash was being received back by M/s.Shri D.Prakshmull C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 8. In para-8 of the affidavit, the petitioner has stated that the petitioner was forced to give a statement that cash was withdrawn from 25 savings bank account of individuals employees of Annai Theresa College of Engineering, Thirunavalur to meet personal expenses of the petitioner in W.P.No.18285 of 2021 and on the assurance that there will not any search related scrutinize last 7 years except financial year 2020-21. Along with typed set , the petitioner has filed affidavit of 19 employees who have given statement that the amount with drawn was paid to them. 9. The specific case of the petitioner is that one of situation contemplated in Rule 112(F) of the Act were attracted and therefore question of invoking Section 153A/C did not arise for passing assessment orders under 153A 153C read with Section 143(3) r/w Section 153(1)(b) of the Income Tax Act, 1961. 10. It is submitted that on the date when the cash was seized Tamil Nadu State Assembly Model Code was in operation and therefore Assessing officer cannot issue notice for assessing and reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous years in which sear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . On behalf of the respondent, it is submitted that statements were recorded from the petitioner in W.P.No.18285 of 2022 on 10.03.2021 and 11.03.2021 under Section 131 of the Income Tax Act, 1961 as mentioned above. It is submitted that the facts are clear and there is an admission that the amount was being siphoned after crediting the amount towards salary to the respective employees account by withdrawing it later without proper accounting. 17. It is submitted that Rule 112 (F) was specifically inserted by clauses 64 66 of the Finance Act, 2012. It is submitted that under Rule 112(F) of the Income Tax Rules, 1962 no notice can be issued to a class or classes of cases by an Assessing Officer for assessing or reassessing an assessee for the assessment years immediately preceding the assessment year relevant to the previous year in which search was conducted or requisition made, where such search or requisition was made in a territorial area of an assembly or Parliamentary constituency in respect of which a notification has been issued under Section 30 read with Section 56 of the Representation of the People Act, 1951 ( 43 of 1951). It is submitted that the exception will apply only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule shall not be applicable to cases where any assessment or reassessment has abated under the second proviso to section 153A and where any assessment or reassessment has abated under section 153C. ] 22. To implement the said above Rules, the Central Board of Direct Taxes has also issued Circular No.10/2012 dated 31.12.2012 bearing Ref.No.(F.No.282/22-2012-IT(INV.V). The tax of the said Circular reads as under:- 2. In consequence of the powers conferred by clauses (64) and (66) of the Finance Act, 2012 the Central Government amended the Income Tax Rules, 1962, to insert a new Rule 112 F after the existing Rule 112E, specifying the class or classes in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made. 3. The aforesaid amendment was introduced with a view to reduce infructuous and unnecessary proceedings under the Income Tax Act, 1961 in cases where a search is conducted under Section 132 or requisition made under Section 132A and cash or other assets are seized during the ele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Chairman of the petitioner s society namely D.Prakash Mull Chorida, the petitioner in W.P.No.18285 of 2020 at the instructions of Branch Manager, Shri.Prabhu Kumar. It was stated that this was the regular practice. To Q.No.9, the said Officer of Bank has answered as under:- Q.9. Have you ever carried cash amount regularly to the Chairman Shri.Prakashmull Chordia House, Nellikuppam? A.9 Yes. During the first week of March, 2021 (2nd or 3rd), I have withdrawn around Rs.20 lacs from 60 individual S.B.Accounts and handed over to the Chairman's house. No receipt will be given for handing over the money. From the date of joining at the Anathur Branch, I have been doing this at least once in a month. 26. On the same day, a statement was also obtained from the petitioner in W.P.No.18285 of 2020, Chairman of the Annai Tersa Engineering College, Tirunavallur . He has stated that as a Chairman of the said , Engineering College, he was also doing the pawn broking business at Nellikuppam, Real Estate business, Finance and also receiving rental income and that he was joint owner of above 10 commercial properties along with his spouse and his son, daughter-in-law etc. 27. In his answer, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner and has simultaneously filed these writ petitions challenging the impugned order passed under Rule 112(F) of the Income Tax Act, 1962. 31. After the impugned orders dated 26.03.2022 were passed and the assessment order was passed on 31.03.2022 for the assessment year 2021-22, the petitioner in W.P.No.18285 of 2020 filed an affidavit dated 12.04.2022 retracting the statement given by the petitioner on 10.03.2021 and 11.03.2021 before the Income Tax Officer. 32. A reading of the facts and statement given by the petitioner on 10.03.2021 and 11.03.2021 and the statements of Bank Officer, Joint Manager, Mr.Unnikrishnan, makes it clear that the practice of the petitioner in W.P.No.18285 of 2022 as the president of the Trust running the college in W.P.No.18281 of 2022 was to credit the salary of staffs/employees into their personal savings account and thereafter withdraw the same by collecting self drawn cheques duly signed by them. 33. The statement that was given by the petitioner in W.P.No.18285 of 2022 was retracted only at a later point of time. The seizure of cash on 10.03.2021 from the possession of Mr.Unnikrishnan and Mr.Swaminathan merely coincided with the implementa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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